BEIRUT - According to Bank Byblos' "Lebanon This week", figures released by the Arab Investment & Export Credit Guarantee Corporation (AIECGC) show that net Arab investments in Lebanon totaled $2.88bn in 2007, up 62.7% from $1.77bn in 2006, and up 123 % from $1.29bn in 2005. Net investments reflect more accurately the movement of investment in a given economy and provide a more precise picture compared to just gross inflows. Lebanon was the second largest recipient of net ADI in nominal terms among 8 countries that released figures on inflows and outflows of Arab funds, up from third place in 2006. Further, net ADI in Lebanon accounted for 31% of aggregate net inter-Arab investments last year compared to 22% in 2006 and 4.1% in 2005. Lebanon posted the third highest growth rate in net ADI year-on-year in the region in 2007 after Saudi Arabia and Jordan. Net ADI in Lebanon totaled $8.24bn during the 2001-07period and averaged $1.18bn annually.

In parallel, Net ADI in Lebanon was equivalent to 11.7% of GDP in 2007, up from 7.8% of GDP in 2006 and 6% of GDP in 2005. Lebanon ranked first in the region in terms of net ADI as a percentage of GDP in 2007, unchanged from 2006 and up from third place in 2005. Net ADI relative to GDP was 0.7% in 2001, 2.6% in 2002, 3.6% in 2003 and 4.6% in 2004.

The methodology used to estimate inter-Arab investments by the AIECGC relies on ‘declared’ and ‘licensed’ investment, rather than achieved ones. This could significantly affect the effective figures for Lebanon and other Arab recipients as, for instance, some of the biggest Arab investment projects in Lebanon were announced prior to the 2006 summer war with Israel and most of them have yet to materialize. Further, the rankings and market shares of countries tend to be distorted by the absence of figures from large sources or recipients of Arab investments such as Bahrain, Kuwait, the UAE, Morocco and Sudan.