It is all possible

Imagining Lebanon a decade from now

Beirut, December 2026.

For the second year in a row, the number of tourists visiting Lebanon has topped 3 million. They are lured by the country’s historical sites, great food and social scene, as well as by their curiosity to experience the multicultural milieu that makes Lebanon such a unique place, not only for the Middle East, but the entire world.

As of last June, tourists can move around more easily, taking advantage of the new city transit system that has helped make Beirut one of the most accessible and livable cities on the Mediterranean.

Traffic jams and piles of trash, so common only a decade ago, are now long gone. The country has been doing well politically and economically, growing by an average of 5 percent per year in the last five years alone. Elections are taking place within constitutional deadlines and under modern electoral laws. More and more jobs are being created every year, especially for new university graduates who now increasingly prefer to remain in Lebanon rather than emigrate abroad. Opportunities abound in the ever growing service sector (tourism and health care are just two examples), the technology sector and agribusiness.

Lebanon has climbed up the rankings of countries defined by their openness, ease of doing business and innovation. The government has passed a range of groundbreaking legislation that has modernized public administration and created a proper pension system and post-retirement health service for all its citizens. A series of infrastructure projects – a rehabilitated railway system, new bridges and overpasses, a new road network to better connect Lebanon to the rest of the Arab region (and beyond), as well as waste treatment facilities and electricity power plants – have successfully matched the private sector’s ingenuity and managerial skills with the public sector’s vision for improved service delivery.

Progress is perhaps most tangible in the major cities, yet the scope and benefits of Lebanon’s new projects have spread throughout the country, empowering local governments along the way. Internet speed and costs are among the most competitive regionally, and electricity is efficiently produced and now partly exported to neighboring countries. The offshore gas and oil sector, after an unsteady start, is now properly regulated and transparently managed. And after years of investment, proceeds from Lebanon’s natural resources have now started to flow into the government’s coffers. They will partly be used to fund additional capital projects, and partly to reduce the government’s public debt – creating a virtual circle of lower budget deficits, lower debt and interest rates, and more fiscal space to strengthen public services and create an environment where the private sector can flourish, boosting growth and job creation.

It all started about a decade ago…

After a long political impasse, significant changes and reforms were implemented starting in early 2017. The first step was a government of national unity – one that, although short-lived in the run-up to long overdue parliamentary elections – paved the way for progress that subsequent governments embraced and expanded upon.

The first budget in over a decade was discussed and approved in 2017 – and since then, annual budgets have become the norm once again. The government also took some courageous steps. As public debt moved toward 150 percent of Gross Domestic Product (GDP), a package of measures was implemented – starting with fuel taxation that capitalized on low domestic oil prices. This fiscal adjustment came at a cost, particularly as the economy had been weakened after years of political uncertainty and major regional shocks – chief among all, the Syrian crisis and associated refugee flows. At the same time, however, the renewed policy effort also helped revamp confidence, as the Ministry of Finance – supported by the whole government – clearly communicated its strategy and committed to providing better services to taxpayers.

Regulatory authorities were finally activated and empowered – starting in the telecommunication and electricity sectors. A new Public-Private Partnership Law, in line with international standards, was approved after languishing in parliament for many years, creating a modern legal and regulatory framework for the public and private sectors to work together in planning, executing and managing projects. And in a positive nod to the future, Lebanon also became a member of the Extractive Industries Transparency Initiative, underscoring its commitment to transparency and accountability in managing Lebanon’s then nascent offshore wealth. 

As change became visible and gained momentum, confidence started to recover. And the international community – perhaps heartened by the resolve of Lebanon’s revitalized policy-making framework – added to its ongoing support by providing large and reliable multi-year funding to cover the long-term costs of hosting the refugees.

  

Beirut, December 2016

We will only know in a decade’s time whether the story above is a snapshot of reality or mere fiction. But it is all possible. Lebanon has the potential and the capacity to become a beacon of progress and prosperity. The moment is now, starting by setting aside divisions and embracing a sustainable future that will benefit all. 

Annalisa Fedelino is assistant director of the Middle East and Central Asia Department of the International Monetary Fund and mission chief to Lebanon

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