History
republic on the eastern coast of the Mediterranean Sea in Southwest Asia. Lebanonís coastal location, high mountain backbone, and climate have greatly influenced the countryís history, peoples, and economy. The coastal area of present-day Lebanon was settled more than 7,000 years ago and later evolved as the heart of seafaring Phoenicia. To help conduct their sea trade, the Phoenicians developed the first alphabet and colonized the western Mediterranean. In the early centuries ad, a largely Christian population and culture arose, which later blended withóthough was not overwhelmed byóIslamic influences. Following centuries of Ottoman control, France ruled Lebanon under a League of Nations mandate after the Ottoman Empire was defeated in World War I (1914-1918). During World War II (1939-1945) Lebanon became an independent republic and for three decades prospered under a free-market economy. However, the country experienced increasing hostility among rival religious groups, especially between Christians and Muslims. These and other domestic tensions, intensified by foreign influences, erupted into the devastating Lebanese Civil War from 1975 to 1990. Beirut is Lebanonís capital, principal port, and largest city.

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Culture
Lebanonís rich history has been shaped by many cultural traditions, including Phoenician, Greek, Roman, Islamic (including Mamluk), Crusader, Ottoman Turkish, French, and recently American. The resulting culture is distinctively Lebanese, a combination of East and West, past and present. Folk music and dancing have a long tradition and are very popular. Influential Lebanese writers emerged in the early 20th century and greatly influenced the Arabic language. Painters, sculptors, and performers and producers in theater, film, and television have recently distinguished themselves.

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Economy
Before the civil war, Lebanon developed as a free-market economy with minimal government regulations. Because the country had a stable and open economy and strict laws regarding secrecy in banking, Beirut became the banking and investment center of the Middle East. From 1975 to 1990, however, warfare severely dislocated most economic sectors and destroyed structures and infrastructures totaling an estimated $25 billion to $30 billion. As the war damaged Lebanonís economy, most of the rest of the Middle East experienced an economic boom, and businesses moved from Beirut to other Middle East economic centers. Lebanonís economy did not collapse completely during the war, however, largely because foreign aid to competing militias fueled the wartime economy.

Since 1991 Lebanonís economy has begun to revive. Annual inflation, about 500 percent in 1987, was manageable by the mid-1990s. Gross domestic product (GDP) totaled $17.2 billion in 1998, with the GDP expanding by an average of 7.7 percent annually in the period 1990-1999. Horizon 2000, a multibillion-dollar reconstruction program to rebuild Beirutís central district, is the main focus of the governmentís energies. The government hopes the redevelopment will encourage a broader national recovery. Services, trade, manufacturing, and agriculture are now leading sectors, and the booming construction sector is also significant. However, the government remains severely short of funds and has increasingly privatized public functions, including some official monopolies, such as the postal service.

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