Political tensions are currently undermining economic policymaking, but if it can move beyond the current impasse, the government might make some progress on economic and social policy, possibly including much-needed reforms to and investment in the dysfunctional electricity sector-although even here the past record encourages pessimism. It might even make progress on reducing the structural deficit (a result largely of the high cost of servicing the massive public debt). However, corruption and patronage permeate the political system, and many politicians have their own interests in maintaining a bloated public sector. Privatising state enterprises will remain a highly sensitive issue owing to ideological differences and vested interests, as well as to questions about the likely transparency of any sales of state assets. The economic debates will be complicated by political divisions between March 14th, which controls the Ministry of Finance, and March 8th, which has the energy and telecoms portfolios-and which is currently withholding vital telecoms income from the Treasury. Long-discussed plans to sell the two state-owned mobile-phone operators and restructure the heavily subsidised state-owned electricity provider, Electricité du Liban, will be deferred beyond 2012.

Banque du Liban (BdL, the central bank) is regarded as an effective regulator, although the government's dependence on commercial banks for financing does raise some concerns about the authorities' ability to scrutinise them. Arguably, the BdL has become the central pillar of economic management in Lebanon, given the political paralysis that often afflicts economic ministries. The strong demand for Lebanese debt securities is partly attributable to the stability of monetary policy under the central bank governor, Riad Salameh. His tenure is up for renewal in the coming months, and were there to be any politicisation of his reappointment, investors might be more wary of Lebanon's economic policymaking.