Lebanon starts to feel the pinch of financial crisis

Beirut : Lebanon has started to feel the pinch of the global financial crisis through exposure to Gulf economies, which employ a third of its workforce, the finance minister said in an interview published on Saturday.

Mohammad Chatah told Lebanon's As Safir newspaper the economy had started to feel "a little" of the negative effects of the global economic slowdown. "We will feel them more and more," he said.

"We have, in the Gulf, around a third of the Lebanese workforce, about 350,000, and the income of Lebanese in the Gulf is about four times the income of workers living in Lebanon," he said.

"The increase in the size of the Lebanese economy in the Gulf is what made us continue and if it begins to shrink, the calamity will be great," he said. He did not say what impact that would have on Lebanon's 2009 economic growth, forecast by the central bank governor in October to match an IMF estimate of 6 per cent real growth for this year.

Many Lebanese have gone to work in Gulf states offering better salaries and opportunities than Leb-anon - an Arab country whose economy has suffered from political crises and war over the past four years.

Some Lebanese have already started returning from the Gulf, laid off by employers seeking to deal with the fallout of the global financial crisis. Lebanese working in the Gulf have supported the domestic economy through remittances to families, property purchases and regular trips home, Chatah said.