This volume is a collection of my principal articles and papers (including unpublished material) on economic development in Lebanon over the years 1950 through 1998. The essays fall in the area of macroeconomics, public finance, money, exchange rates, and capital markets. Written over the years since 1981, the articles span the recent economic history of Lebanon, covering periods of growth and relative prosperity, 1950 through 1972; destruction during the years of war and violence, 1975-1990; followed by years of transition and the onset of economic reconstruction. Few countries have experienced such a cycle of growth, destruction and reconstruction. No attempt is made in this volume to draw lessons from Lebanon’s experience: that would be a highly adventurous task and risky endeavor, as the process of Lebanon’s reconstruction and modernization is an on-going challenge.

However, the essays survey the consequences of war and adversity on a small economy. The resulting destruction of its physical, social and political infrastructure; the disastrous effects on public finances and the public sector’s ability to cope with the challenges of reconstruction; the resulting inflation, currency depreciation and dollarisation of the economy. In this there may be lessons for other countries, and for Lebanon as it stands at a crossroads in its history, facing a large number of challenges: economic, environmental, social, and political.

The collection of papers is assembled under five headings. I have reprinted the articles as they appeared, not attempting to revise or add my present vies, to preserve the original flavor. Part I, includes essays on the consequences of budget deficits and managing the public debt. Part II includes a number of articles on monetary policy and the exchange rate in Lebanon, a country with the longest history of conducting a flexible exchange rate in Lebanon, a country with the longest history of conducting a flexible exchange rate system. They discuss the conditions under which large government budget deficits and their financing can affect exchange rates and the conduct of a stable monetary policy. Part III contains a set of articles analyzing the effects of war on Lebanon’s economy and the substantial requirements of reconstruction. The papers discuss the political economy of reconstruction, identifying the need for a broad, national consensus concerning the objectives, speed and means of rebuilding and modernizing Lebanon. Reconstruction, to be successful, should be viewed as equitable, correcting past uneven development, and encompass all the regions and communities of the Lebanon. The articles in part IV discuss issues relating to the financing of reconstruction and the potential role of the capital markets. Unlike Europe after WWII, Lebanon has not received substantial amounts of foreign aid, and has relied on private sector based finance and capital inflows to bridge the gap between the domestic saving and investment requirements. The papers single out the potentially conflicting objectives and trade-off between the requirements of reconstruction and economic stabilization. Part V contains a number of articles that map Lebanon’s longer-term economic potential, identifying a number of strategic challenges and opportunities: economic relations wit Syria, a Partnership Agreement with the European Union and the development of an Arab Free Trade Area and Arab common Market.

I would like to thank my numerous colleagues and friends at the Graduate Institute of International Studies in Geneva and the University of Geneva, particularly Professors Alexandre Swoboda and Hans Genberg, who saw the initial drafts of my early papers on Lebanon. Most of all, my thanks and appreciation go to my wife, Safa, and our children Maarya, Tarek and Talal, who were patient, supportive and encouraged me to research and write at a time when all hope seemed lost for my beloved country.