Lebanese-Israeli negotiations

by Fred Khair June 15, 2026

written by Fred Khair

On June 3, the United States released a “Joint Statement” announcing a renewed ceasefire agreed upon by Lebanon, Israel, and the United States “contingent on a complete cessation of Hezbollah fire and the evacuation of all Hezbollah operatives from the South Litani Sector.” The agreement, with all of its imperfections and weaknesses, stipulated “the creation of pilot zones in which the Lebanese Armed Forces will take exclusive control of the territory to the exclusion of all non-state actors.” Following this announcement, Israel reported rockets fired by Hezbollah in apparent defiance of the agreement.

The Lebanese-Israeli negotiations currently taking place under United States auspices have become the target of repeated attacks from the Lebanese political factions opposed to the very principle of direct talks with Israel, pointing to the continuation of Israeli bombardments across southern Lebanon and the Bekaa Valley as evidence of their failure. Hezbollah’s opposition to negotiations was most clearly stated in a May 24 speech broadcast by the Qatari News Channel Al Araby, by Hezbollah Secretary-General Naim Qassem. He stated that the “people had the right to take to the streets and topple the government,” which he referred to as part of an “Israeli-American project,” thereby granting Hezbollah, in his view, the right to confront it just as it confronts its two declared enemies.

A survey conducted by nonpartisan public opinion research network Arab Barometer in the first half of 2024 found that 55 percent of Lebanese respondents said they had lost all trust in Hezbollah, while 30 percent still voiced strong levels of trust in the group. This data was notably collected before the killing of the Secretary General Hassan Nasrallah and Hezbollah’s significant weakening. Although there is little data available to track the group’s popular support in spring 2026, it is broadly acknowledged that public support has plummeted.

Yet beyond the debate over the negotiations themselves lies a broader question: whether Lebanon will finally strengthen the authority of its state institutions or remain trapped in the cycle of militia dominance and regional proxy conflicts that has shaped much of its modern history. In this critical period for Lebanon, battered once again by the ravages of war, the best available path forward is to give the Lebanese state a genuine chance and rally behind its efforts to halt the destruction and rebuild what has been lost. Despite its fragilities, Lebanese legitimacy remains the only internationally recognized framework capable of guaranteeing both Lebanon’s stability and an essential component of regional security.

May 17, 1983: An agreement at the heart of regional fault lines

Any serious reflection on the current situation inevitably leads back to the May 17, 1983 agreement between Lebanon and Israel, as well as its subsequent abrogation by the Lebanese government on March 5, 1984.

More than forty years later, the circumstances surrounding that episode continue to fuel debate because of the profound impact its consequences had on both Lebanese and regional history.

Each side still maintains its own interpretation of the events.

From the perspective of former President Amine Gemayel and his then-Foreign Minister Elie Salem — who detailed the circumstances surrounding the agreement’s collapse in his book Violence and Diplomacy in Lebanon: The Troubled Years, 1982-1988, as well as in a series of documentary interviews broadcast in 2026 by Al Arabiya — the failure stemmed primarily from a sudden Israeli change of position.

According to this account, Israel demanded the prior withdrawal of Syrian forces before initiating its own withdrawal from Lebanon, despite the agreement originally stipulating that Israeli forces would withdraw first. This modification allegedly sabotaged the entire process. Similar arguments were also developed by Amine Gemayel in his book L’Offense et le Pardon, published at the end of his presidency in 1988, and later in The Resistant Presidency, published in 2020.

On the Israeli side, there was a profound breakdown in communication with President Gemayel. According to the second volume of Alain Menargues’ Les Secrets de la guerre du Liban, Israeli officials met with him on the eve of his election after supporting his candidacy—at his own request—and securing, through U.S. mediation, the withdrawal of former President Camille Chamoun’s candidacy.

However, according to the same source, once elected, Gemayel reportedly refused all direct contact with Israel, insisting that all communications be conducted exclusively through Washington. Over time, this distance is said to have fostered mutual distrust and ultimately led to Israel’s disengagement from the process.

As Israel–Lebanon peace negotiations are relaunched in 2026, marking the first direct talks toward a permanent settlement since the failure of the May 17 Agreement in 1983, it is worth revisiting that earlier episode. Although the circumstances surrounding the two processes differ significantly, an examination of the 1983 experience can provide a useful framework for understanding the dynamics and constraints shaping the current negotiations.

On the Israeli side, the country negotiating today is not the country that signed in 1983. By the early 1980s, Israel could be described as a fragile actor whose strategic calculations were shaped in part by economic vulnerability. The International Monetary Fund (IMF)’s 1983 Article IV Consultation with the country categorized it as an “LDC,” or less developed country with a deteriorated trading position, and overburdened by four years of inflation rates at 100 percent. Today, Israel is classified as an advanced, high-income economy with a nominal GDP approaching $720 billion and a per capita income of nearly $70,000, giving it an entirely different weight and leverage at the negotiating table.

On the Lebanese side, both the country’s economy and its internal political landscape have undergone profound transformations. In 1983, despite the strains of civil war, Lebanon still maintained a functioning economy. The political system operated under the framework of the 1943 National Pact, which vested the President of the Republic with extensive constitutional powers. Today, however, the institutional balance established by the 1989 Taif Agreement has transferred many of these prerogatives to the Council of Ministers collectively.

The purpose of looking back on the failure of the May 17^th agreement might not be to extract a lesson on what a peace deal with Israel can or cannot provide Lebanon, but rather to make the case that failure to support a sovereign Lebanese state has adverse consequences on the country’s ability to ensure the security and stability of its population.

The collapse of the state and its consequences

The collapse of the May 17 agreement paved the way for one of the most destructive periods in Lebanon’s contemporary history.

At the time, the Lebanese state already represented the weakest link in a country overrun by militias of every kind, financed and backed by foreign powers. Foreign armies occupied Lebanese territory while state institutions had been severely weakened after seven years of civil war. And yet, despite this weakness, the only genuine international and regional bet remained the preservation of Lebanese legitimacy.

Why? Because it represented the only institution capable of providing a credible alternative to militia rule. Only a fully sovereign Lebanese state, acting through institutions recognized under international law, could secure its territory and prevent it from being used as a platform for armed groups or foreign actors whose activities threaten regional and international security.

The failure of this bet immediately plunged Lebanon into a new phase of chaos. It began with the Mountain War of 1983–1984, which quickly evolved into a largely sectarian conflict between Christians and Druze, resulting in massacres and the displacement of large segments of the Christian population. The consequences of this conflict endured for nearly two decades, until the Mountain Reconciliation of 2001, spearheaded by Maronite Patriarch Nasrallah Sfeir and Druze leader Walid Joumblatt. Throughout that period, the Assad regime did everything in its power to undermine and derail any genuine rapprochement, arresting activists and intimidating supporters of reconciliation.

Nor was the Mountain War an isolated episode. Violence also spread to eastern Sidon, where clashes between Islamist militias and the Lebanese Forces produced similar tragedies, further exacerbating the country’s fragmentation and instability.

This decline formed part of a wider process of state collapse. It reached a critical turning point with the fragmentation of the Lebanese Army after the February 6, 1984 uprising, when the principal political and militia factions operating in West Beirut accused the army leadership of sectarianism in order to justify framing this as a basis for their opposition to both the Lebanese government and the state represented by President Amine Gemayel. The weakening of the army, one of the last functioning national institutions, opened the door to the widespread dominance of militias and the expansion of lawlessness. These developments unfolded under the supervision of the Syrian Baathist regime, which leveraged the turmoil to strengthen and entrench its influence in Lebanon.

The deterioration extended further to the wave of kidnappings and hostage-taking operations that targeted foreign nationals in West Beirut, including members of the American University of Beirut (AUB) staff, journalists, Lebanese Christians, and Jews. Amid Lebanon’s growing sectarian partition between predominantly Muslim and Christian areas, both sides of the conflict witnessed widespread lawlessness, political violence, and militia rule, as state authority steadily eroded.

Furthermore, this period enabled the systematic development of Hezbollah by the Islamic Republic of Iran, with the approval and support of the Syrian regime.

The centrality of Lebanese legitimacy

This is precisely why Lebanese legitimacy poses a pivotal question in regional and international calculations. That legitimacy is embodied by President Joseph Aoun, Prime Minister Nawaf Salam’s government, and above all the Lebanese Armed Forces, which serve both as the executive arm and the symbolic embodiment of the state.

Yet legitimacy cannot remain merely declaratory. It must be translated into tangible action through the gradual reassertion of state authority and the enforcement of the rule of law, beginning in areas beyond Hezbollah’s sphere of influence. This process should be accompanied by concrete measures designed to strengthen and expand the implementation of the proposed pilot-zone model, whereby effective governance, law enforcement, and state institutions are first consolidated in selected areas before being progressively extended elsewhere.

This is the historic opportunity currently before the Lebanese government in the context of ongoing negotiations: the chance to rebuild a fully sovereign state whose authority is exercised throughout its territory. Such an achievement would not only serve the interests of the Lebanese people but would also constitute a vital pillar of regional stability and a foundation for the fragile yet genuine hopes for peace that are beginning to emerge across the Middle East.

Executive Magazine is committed to representing a full spectrum of opinions

June 15, 2026 0 comments

Analysis

Much ado about economic peace

by Thomas Schellen June 15, 2026

written by Thomas Schellen

Sustained, or lasting, economic peace is the precondition for Lebanese social salvation. This is a simple truth that one can call self-evident in the face of our global neighborhood’s long ongoing perma-conflict. It is confirmed, once again this June 5, by the United Nations’ assessment of Lebanon’s urgent survival needs to be funded with $331.5 million for the ongoing three-month period. This added request raises the total UN 2026 flash appeal for the most urgent country support to $639.9 million between March and August of this year.

Moreover, the timeless truth about the need to avoid the multi-dimensional human disaster of war has been locally reinforced in 2026, as it has before in 2024 and 2006 (and before and before…). The lesson of three wars is thus being transcribed into a solid knowledge that peace for the small state of Lebanon is indispensable for national development under all traditional and contemporary perspectives of sovereignty.

A sustainable economy, an economy that does repeat wild swings between growth in year one and recession in years two to five, an economy that capitalizes on autochthon creativity and globally integrated productivity, an economy that achieves global benchmarks for balancing national accounts in trade and payments, an economy that preserves its natural, human and social assets, that can grow without entering dependence-inducing monetary programs and can sustain the population without requiring recurrent external food aid due to social emergencies – is a viable goal for Lebanon. But only in a time of peace.

Before even beginning to talk about foundations for practical peace in Lebanon, however, one has to acknowledge that economic peace is nothing if not a difficult proposition. Sustainable economic peace in the 21^st century in general and in the Middle East in particular is not an easy sell, from two contrarian angles.

One angle is that the principle of peace presents itself as a vision and ideal rather than a lasting societal foundation throughout the historic reality of peace building. From this angle, one simply has to recognize that complete long-lasting peace is not a result of perfect contracts among enlightened sovereign republics. It is a visionary ideal worth striving for, but it is not achievable on basis of one nation’s sovereignty, however strong that nation may be. It is an imagined political reality for which there is not even a fleeting precedent in the Lebanese context.

The second, equally weighty but almost impossibly complex angle to the conundrum of practical peace is based on a threefold economic-political observation. First, zero-sum approaches to economic competition, including those with military implications, aren’t always economically inferior than cooperative, mutually beneficial ones; the assumption that win-win is always superior doesn’t hold up. Second, we now understand just how vast and interlinked the potential gains and losses are across environmental, social, economic, and civilizational domains, which means a major war in the 21st century could produce outcomes that are genuinely unpredictable and threaten humanity’s existence as a whole. Third, agreements to avoid military conflict and political hostility are no longer enough to guarantee that individual nations can sustain their economies or maintain economic self-determination, and this gap may be even wider in today’s digital age than it was in earlier eras.

Practical peace in the digital age will have to be forged by the global and economically interconnected community of nations on basis of understanding that war, irrespective of any preliminary bottom line with a win-lose zero sum outcome, is in the long run a lose-lose game with 1000 percent predictability.

Whereas this latter insight in the politico-economic interplay of war and peace has not been at the center of global attention in the post-Cold War era, it is harshly brought to the fore or our attention by the conflicts blasting over the Middle East region in this year of 2026. In support of this view, whereas matters of war and peace evidently have upsides as well as downsides under an politico-economic focus, the international energy markets in this spring and summer make for a most convincing argument that decisions of war and aggression have unexpected and detrimental global impacts on nearly all national economies.

By the way, the example of crude oil is just a highly visible real economy one in a number of escalating arguments against the fragmentation of the economic world. Another tangible politico-economic lesson of the Iran war of 2026 is the complexity that intertwines the opportunity costs of war and the paucity of peace dividends. The expansion of the financialized meta-economies of global trade in the past four decades has ballooned global financial flows but it has also radically increased systemic fragilities, need for costly oversight, and risks tied to fragmentation. According to a June 2026 research paper under the World Economic Forum’s initiative for Navigating Global Financial System Fragmentation, for example, the risk of systemic financial fragmentation including tariffs and trade conflicts, is, in a worst-case projection, as high as $6.9 trillion, more than 6 percent of global GDP.

Middle Eastern history of the late 20^th and early 21^st century thus is more than just a strict, relentless moral teacher that peace is a vision to strive for. It shows the world that economic peace is the indispensable foundation for a state of sustainable sovereignty. Executive Magazine coincidentally regards this “practical peace” as a foundation to a sovereign Lebanese state.

The trap of self-divide

One can call the primary obstacle to nation-level implementation of practical peace in Lebanon the “Lebanon trap”. In part, this term attempts to codify the centuries old reality that the Lebanese polity has been a sideline event in geopolitics but also an attractive morsel for expansionist empires. Colonizers, conquerors and neo-colonial powers have used the military-political coastal “highway” of the eastern Mediterranean territory and sat at the local decision-making tables either directly or by proxy.

Existing within the confines of a very limiting territorial enclosure has been the fate of many small polities living in not-easy-to-defend lands. But in Lebanon, this fragmentation into small communities has been made worse by a lack of shared purpose among its culturally and economically diverse communities. This diversity is potentially a great strength, but historically it instead created a deeper, almost inescapable dimension to the constraints of this small polity, the Lebanon trap.

Throughout a millennia-spanning history, this trap has been sprung repeatedly by conquerors and invading empires as well as local lords that used a “divide and rule” strategy. Furthermore, many a power usurper also benefited from local “self-divide and be ruled” competition among communities. Examining the contemporary Lebanese mentality of the 21^st century, it serves to remember that every Lebanese self-identified as coming from a plethora of faith-based communities long before its current politico-economic, openly or covertly arms bearing, sectarian organizations were established at different points during the past 100 years.

This historic fragmentation and diversity is the cultural baseline of Lebanon. It is both a restraint and a tremendous opportunity. However, this opportunity can be turned into the Lebanon trap in three ways: when the country’s diverse communities remain vulnerable to corruption; the polity repeatedly defers to foreign empires and modern quasi-empires when making national decisions; and local communities tend to avoid taking responsibility for their own conduct, which should be the foundation of sovereignty. The result is a mentality of open subservience to external powers, combined with shameless finger-pointing between communities.

Clutching at sovereign straws

The regional case thus is indeed the master class material for investigating the flaws of two of the 20^th century’s highly popular thought experiments in the construction of practical peace – political pacifism and economic peace dividends. The enabling environment for this master class is the wide presence of diverse religions and ideologies that have been competing for allegiance of polities and societies around the region. On the levels of tribe-like societies, nation-states and would-be hegemons, the region has been witnessing active competitors for popular adherence to identity systems that have historically ranged from dedicated Islamism and convinced Zionism to dynastic rule, capitalist laissez faire, socialist utopias, agnostic totalitarianism and lately to social media anarchy.

Political pacifism and economic peace are not materializing in the most developed societies and also have not shown systemic impact in least-developed countries that struggle for baseline survival. In the Arab regional context, however, to cite Lebanese economic thinker and author Nassim Taleb, “the Levant has been a mass producer of consequential events nobody saw coming”.

In a deeper dive into the enigma of Lebanese mentality, it seems prudent to recall scientific research on development of mindsets from perspectives of memory, cognitive selection, and reason. A century of research into reconstructive and constructive memory has convinced most people that memories are not unchangeable recordings of facts. Similarly, cognitive dissonance has been called out in the middle of the last century as coping mechanism for solving intractable contradictions by way of mental dismissal. The very faculty of human reason finally has been noted earlier in the current century for its social (and social capital) utility, meaning the ability to use reasoning for constructing arguments after the fact and winning social acceptance (which in the view of Taleb also is a core component of a “black swan” incident).

This transactional aspect of reason, according to an investigation into “The Enigma of Reason” supersedes the intellectual functionality of reason as instrument of truth detection or improved decision making (to the delight of politicians and journalists). In the context of behavioral economics, as in wider behavioral studies, debates over memories, reason, and a wide range of cognitive processes and biases have taken on the mantle of self-evident truths. Understanding these truths can elucidate the Lebanese cognitive dichotomy and darkness of mentalities shaped by trauma after trauma and influenced by fake narrative after fake narrative as apparently is the case in the Lebanese mind-sphere after centuries of precarious, non-sovereign reality which by way of evolutionary constructs have produced contemporary Lebanese mentalities as tools of survival and social integration.

Peace is a vision that has not been invalidated by historic shocks of the last century – from the horror of “never again” to the evil of weapons of mass destruction. But perfect peace has never been achieved, not even with all the skills, tech, and knowledge accumulations of the 20^th century. The most rational approach should nonetheless be that practical peace is a worthy and attainable state of existence but also that under regional realities during the first quarter of the 21^st century, economic peace and economic democracy is not yet a realistically attainable platform of existence for the conflict-prone and predator-producing species homo [non] sapiens.

In juxtaposition to such pessimism, however, the scope of economic peace and economic democracy is being reshaped and possibly increasing. The issue is controlling the territory, the metaverse, and the narrative in the digital world within a multi-trillion dollar global economy whose two ideologically, culturally, and socially juxtaposed largest players USA and China control half of total productivity and where trillion-dollar wars are becoming the rule of armed conflict.

For the Islamic world and wider Middle East region, the new scope of war and peace risks in a digitized political and economic environment comes at a time when conflict risk has been reaffirmed as high and when the Iranian model has confirmed its readiness to operate as a determined and unrestrained conflict actor when under threat. It furthermore comes during an inflection period for Arab economies. Oil-exporting autocratic economies in the Gulf are making efforts to recast themselves into new roles as transportation, tourism, trade, and services hubs, partially with advanced AI adoption efforts and entrepreneurship aspirations.

These factors contribute to regional power shifts and new risks of imbalance that are made all the weightier in Lebanon by the fact that Israel is today not just a developed economy in the high income bracket of advanced capitalism with massive technological and military exports. Israel in 2026 stands as a regional hegemonic player with an expansionary ideological-politico-economic game plan. Perhaps the clearest illustrations of the changed position of Israel can be found in the increasing Israeli weapons exports in recent years and two new attempts of Israeli lobbying in the USA to become a strategic partner in mission-critical military tech infrastructures.

Under these circumstances, backward comparisons and memories of past near-reconciliation between Lebanon and any neighbor or regional power are not helpful. New and competing power cores with regional conflict potential have been emerging in Israel, Iran, and the GCC. When compared to the increased power interests and potentials for economic competition of these countries, the already much less significant political and economic potential of Lebanon seems to be at a multi-decade low point. As proven for a repeated time by the war of March 2026, the country is suffering from impotence to defend its territory and is moreover exposed to territorial intrusions, or what critics of Israel call unchecked “Gazafication”.

To sum up the anatomy lesson of the Lebanon trap, its material baseline is the state’s combination of small territory, inferior political power, and minimal military capability with the country’s attractiveness to would-be conquerors. The trap is a combination of the centuries-long experience of extreme vulnerability to external pressures, including foreign sponsors of the economy, with readiness of an internally dichotomous polity to ostracize groups instead of constructing pathways of integration.

There is no evidence that sovereignty has ever protected Lebanon and powered this state to the point of being an equal contender relative to neighboring countries, nor is there evidence of a valid concept of national sovereignty as secret base for Lebanese success in the future. There is moreover no political, military or economic leverage that Beirut can bring to bear in this situation. But there is a path forward: by reshaping the mentality and mindset at the heart of the Lebanon trap, the country can begin to change its own trajectory.

June 15, 2026 0 comments

Analysis

Is peace the answer?

by Jamile youssef June 12, 2026

written by Jamile youssef

Lebanon, exhausted by war in spring 2026, arrives at the negotiation table with Israel in a desperate socioeconomic position and an urgent question. The question animating Beirut’s government led by President Aoun and Prime Minister Nawaf Salam is whether a deal with Israel can secure a cessation of hostilities and unlock economic recovery.

In Lebanese society, the very idea of negotiating directly with Israel has important change-making potential, even though some of this potential is socially divisive. Moreover, although peace may be necessary for achieving a positive turning point in the economy, it is almost certainly insufficient. Lebanon’s economic collapse precedes the war, and its causes are structural, political, and self-inflicted.

To understand what a settlement can and cannot deliver, Executive has developed three scenarios. They are a peace-without-reforms scenario, a reform-without-peace scenario, and a reform-with-peace scenario, with an approach of mapping out the divergent growth trajectories each scenario implies.

The war between Israel and Hezbollah erupted in 2023 after nearly seventeen years of relative calm along Lebanon’s southern border before intensifying dramatically in September 2024. The conflict came at a time when Lebanon was already suffering from corruption, economic collapse, banking failure, high debt, lack of institutional sovereignty. Although the war lasted only two months, the ceasefire that followed never produced lasting stability, and violations and Israeli strikes persisted throughout the period.

Following the November 2024 ceasefire agreement, Lebanon witnessed important political developments, including the election of a president, the formation of a new government, and a series of appointments across key state institutions. These changes helped revive hopes of reform and contributed to a modest economic recovery, with real GDP expansion to 3.5 percent in 2025 according to the World Bank Lebanon Economic Monitor after it witnessed a sharp contraction in the previous year.

In March 2026, hostilities erupted once again, extending beyond ninety days and renewing fears that Lebanon may remain trapped in a cycle of conflict and instability. By the end of May, Lebanon’s Ministry of Public Health had reported over 3,300 killed, with more than 10,000 injured. On May 21^st, international news agency Reuters reported an estimate from the Lebanese Minister of Finance Yassine Jaber at 20 billion USD in damages and an economic contraction of seven percent.

Peace without reform

The first trajectory worth tracking is a peace scenario based on observable data from countries in the region that have embarked on similar endeavours. The 1994 Israel–Jordan Peace Treaty was an agreement that not only ended the state of war between the two countries but also built a foundation of trade cooperation, tourism, transportation, energy, water, telecommunications, and investment. The agreement was built on the belief that stability and regional integration would create new opportunities for economic growth.

In the year following the treaty, the World Bank recorded a six percent GDP growth, continuing a recorded two-year period of economic growth. Overall, the Hashemite Kingdom benefited from increased foreign aid, tourism, stronger diplomatic ties with Western countries, and higher investor confidence.

However, according to the International Monetary Fund (IMF) data, growth slowed in subsequent years and averaged roughly 3 percent annually since 2010. The slowdown reflected the persistence of structural challenges and weak institutional capacity. While stability helped improve the business environment, attract international support, and encourage investment, it did not fundamentally alter the country’s economic trend.

Jordan’s experience demonstrates the limits of peace as an economic strategy. More than thirty years after the peace agreement, the country continues to struggle with high unemployment, dependence on foreign aid, high public debt, and modest growth rates that generally fluctuate between 2 and 3 percent annually since 2010.

Jordan is not the only regional example. Egypt, the first Arab nation to officially enter a peace agreement with Israel, experienced a similar pattern. The Egypt-Israel Peace treaty of 1979, signed by President Anwar El-Sadat, Prime Minister Menachem Begin and witnessed by US President Jimmy Carter, contributed to greater stability, strengthened Egypt’s relations with Western countries, and was followed by substantial U.S. economic and military assistance combined with rising tourism revenues, remittance inflows, and increased activity through the Suez Canal.

IMF data reflects this as it recorded real Egyptian GDP growth at 3.4 percent in 1980, slightly decreasing to 2.2 percent following year, but accelerating to its highest recorded peak at nearly 9 percent in 1983. However, despite what may be described as an initial “peace premium,” Egypt has continued to face corruption, bureaucratic inefficiencies, inability to foster pluralistic growth, and persistent economic challenges since those initial dividends, and economic growth continued to drop dramatically for a decade. Although it expanded again in 1997 due to state-level structural reforms, Egypt’s economy is marked by repeated cycles of expansion and slowdown, with recoveries failing to reach previous peaks.

This pattern suggests that while peace may contribute to stability and growth, it does not guarantee a lasting economic transformation. The experience of both Jordan and Egypt suggests that peace can improve economic conditions and create new opportunities, but it does not by itself guarantee sustained growth or structural transformation.

Reform without peace

If peace is not, on its own, a guarantor of economic flourishing, it is worth asking whether reform without an enabling environment of negotiated peace is a suitable driver of growth. Lebanon’s own experience suggests that reform efforts alone do not guarantee sustained growth. Beginning in 2011, successive governments launched anti-corruption and governance initiatives, including the development of a National Anti-Corruption Strategy and the adoption of legislation on access to information, whistleblower protection, and anti-corruption oversight.

Yet these efforts unfolded within a context of political uncertainty and recurrence of war and sanctions, spillover effects from the Syrian conflict, and the arrival of large numbers of refugees. Despite these challenges, IMF data shows that the economy expanded from 0.9 percent in 2011 to 2.8 percent, 3.8 percent, and 2.4 percent in the three years that followed. This period illustrates how reforms and institutional improvements can support economic activity even in difficult circumstances, while also highlighting the limits of reform in the absence of lasting stability.

During the early years of Rafik Hariri’s premiership, between 1992 and 1996, Lebanon experienced a period in which ambitious reconstruction plans coincided with relatively high hopes for regional peace following the Madrid and Oslo processes. Hariri’s government launched Horizon 2000, a large-scale reconstruction and reform program aimed at rebuilding infrastructure, restoring the banking sector, and reviving Beirut’s role as a regional financial and commercial hub. This combination of domestic reform momentum and an external environment in which a broader Arab-Israeli settlement seemed plausible contributed to a strong economic rebound. The IMF recorded Lebanon’s average annual growth rates in the range of 7 to 8 percent during these years, reaching over 10 percent in 1996, the highest in its postwar history. Confidence in the currency was restored, capital inflows increased, and reconstruction activity drove growth across construction, services, and finance.

However, this period also illustrates the fragility of growth built on expectations rather than realized peace. As the regional peace process stalled in the mid-to-late 1990s and domestic political tensions resurfaced, growth rates declined sharply, and the debt burden accumulated during the reconstruction phase became increasingly difficult to manage. The 1992-1996 episode therefore offers a useful counterpart to the post-2011 period discussed above: whereas the later period shows reform proceeding without peace, the early Hariri years show strong growth driven partly by reform but heavily reliant on an anticipated peace dividend that ultimately did not materialize, leaving the economy exposed once those expectations faded.

Building on this experience, Executive’s reform-without-stability scenario begins with the 4 percent growth recorded in 2025 by World Bank data, reflecting the gains associated with a period of relative stability and institutional reform. It then assumes a contraction similar to Lebanon’s 2024 after war recession, before returning to growth rates comparable to those observed during the post-2011 period.

Drawing on Lebanon previous experience and cycles, including the strong vacillation of GDP growth in the 2000s, the scenario assumes that a reform-without-stability trajectory is unlikely to follow a smooth upward path. Periods of growth may be interrupted by renewed security shocks, political crises, or regional tensions, producing a pattern of uneven recovery in which economic gains are followed by setbacks before growth resumes again.

This scenario suggests that reforms may help mitigate the economic costs of instability and support recovery, but their full benefits—which, according to Executive’s estimates, could translate to an economy with a GDP of 200 billion USD—are unlikely to be realized without a more secure and predictable political environment.

Peace and reform: an unrealized projection

Unsurprisingly, a more promising trajectory emerges when reform is coupled with stability. This speculative scenario assumes that Lebanon successfully addresses the mentioned issues and implements reforms while achieving the stability necessary for long-term recovery.

De-facto external peace, as it existed in a precarious way in the 2006-2023 period despite the absence of a state monopoly over violence and a concurrent dual presence of a political and a militarized Hezbollah organisation, has for the purpose of this scenario been replaced with the assumption of a formal peace treaty between Lebanon and Israel that is guaranteed by international and regional agreements.

This scenario anticipates a confluence of peace and reform momentum, the positive indications of which are borne out by data and expert opinions. In January 2026 Lebanon Economic Monitor, the World Bank projections estimate that Lebanon could sustain growth of around 4 percent if reform efforts continue and political stability is maintained, this aligns with IMF forecast. Several Lebanese economists, including Marwan Baraket, Layal Mansour, and Fouad Zmokhol, echoed similar views in interviews with Executive magazine, emphasizing the importance of structural reforms in restoring long-term growth and rebuilding confidence in the economy.

Decisively, this scenario also assumes that a solution for the longest-standing problem complex of inefficiency and corruption – which has invariably been identified as residing in the Lebanese power utility, Electricite du Liban – will be solved. A 2007 World Bank Policy Research Working paper estimated that reform of the electricity sector alone could raise Lebanon’s growth potential by approximately 0.2 to 0.3 percentage points annually.

Despite countless reports, conferences, popular protests, and governmental promises to the opposite, the proposition of EDL reform as potential growth booster is as undeniable in 2026 as it was in 2007. A June 2026 IMF “Diagnostic of Governance and Corruption (DGC)” cites the electricity sector as an examination of how corruption and patronage systems impact public service delivery and describes EDLL reform as outstanding.

The electricity sector in Lebanon provides a clear example of governance failure among other examples of mismanagement of state owned enterprises and state assets, many of which lack clear valuation. Decades of political interference, delayed reforms, and mismanagement turned what should have been a driver of economic growth into a major burden on public finances. The sector had become a symbol of the state’s inability to deliver basic services efficiently. According to BlomInvest Bank’s 2026 report, Turning the Lights On: Solutions for Lebanon’s Electricity Crisis, electricity-sector cumulative debt and related interest payments exceeded $43 billion by 2020, making it one of the largest contributors to Lebanon’s public debt.

Notably, many of the further structural challenges identified in the 2007 World Bank Policy Research Working Paper remain relevant today and progress in addressing the country’s key economic constraints has been limited. Additionally, a fiscal reform could generate annual growth of approximately 0.3–0.4 percent per year. Our scenario conservatively assumes only the lower bound of the electricity-sector reform estimate and gradually increases growth from 4 percent to 5 percent over the six consecutive years. This intentionally conservative assumption does not fully account for the potential gains that could arise from broader reforms in governance, public administration, anti-corruption efforts, and the banking sector.

The comparison of three scenarios highlights a central lesson for Lebanon: neither peace nor reform alone is likely to be sufficient. The peace scenario suggests that stability can generate important economic benefits by reducing uncertainty, encouraging investment, improving access to international support, and creating a more favourable environment for private-sector activity. However, from previous experience we can conclude that stability may create opportunities, but it does not by itself address the structural weaknesses that limit economic performance. The peace trajectory laid out here is an illustrative benchmark only and not a forecast. Lebanon’s economic structure, institutions, demographic profile, and political environment differ significantly from those of Jordan and Egypt, meaning the actual outcomes could be either stronger or weaker depending on a host of factors particular to the Lebanese case.

The reform-with-stability scenario produces the strongest outcome. In this case, governmental and sectoral increase long-standing inefficiencies and increase the economy’s productive capacity, while stability provides the predictability needed for business to expand. The combination allows the benefits of reform to be fully translated into economic growth and creates the conditions for a more durable recovery.

While reforms can improve economic fundamentals and support recovery, continued conflict and political instability would likely discourage investment, disrupt tourism, delay reconstruction, and leave growth vulnerable to recurring setbacks. Economic gains may still occur, but they are likely to be smaller, less predictable, and more easily reversed by future shocks.

The analysis therefore suggests that the greatest challenge facing Lebanon is not choosing between peace and reform but achieving both simultaneously.

The question facing Lebanon

The debate surrounding a potential agreement between Lebanon and Israel is often framed as a choice between war and peace, conflict and stability. Yet the economic question is more complex. History suggests that peace can create opportunities by encouraging investment, reviving tourism, reducing uncertainty, and opening new channels of regional cooperation. However, peace alone does not automatically translate into prosperity.

Lebanon’s economic collapse did not begin with the current war. Long before the latest conflict, the country was struggling with a banking crisis, chronic electricity shortages, rising public debt, corruption, and weak state institutions and infrastructure. These structural problems would continue to constrain growth regardless the situation on the border. Without stronger institutions, greater transparency, accountability, and meaningful economic reforms, many of the potential benefits of stability risk being lost to the same governance failures that contributed to the crisis in the first place.

The question facing Lebanon today is therefore not simply whether peace can generate economic benefits. History suggests that it can. The more important question is whether Lebanon can build the institutions capable of turning those opportunities into lasting prosperity.

June 12, 2026 0 comments

Comment

A Realist’s Wager

by Yasser Akkaoui June 9, 2026

written by Yasser Akkaoui

In the intricate theater of Levantine diplomacy, the ongoing trilateral negotiations surrounding the June 2026 ceasefire framework between the United States, Israel, and Lebanon are widely misread. International observers parse the diplomatic communiqués for signs of a grand bargain, analyzing the technical capabilities of the Israeli and Lebanese delegations as if they were engaged in a conventional negotiation over borders and sovereignty. But this misconstrues the fundamental architecture of the talks. Lebanon is not at the table to outmaneuver Israel; it lacks the leverage, the unified government, and the military deterrent to do so. Instead, for better or worse, Beirut is engaged in a delicate test of statehood for an audience of one: the United States.

Lebanon arrives at these negotiations fielding a state apparatus hollowed out by economic collapse, shattered by Israeli demolishment of civilian infrastructure, and sidelined by Tehran’s grip. There is no traditional diplomatic leverage. Yet, in the paradox of Lebanese statecraft, this extreme fragility serves as its primary geopolitical currency.

The strategy is one of vulnerability presented as a value proposition. The Lebanese state is banking on the premise that a total institutional collapse on the Mediterranean remains a red line for American security interests. Beirut is essentially signaling that while it holds no strong cards, its survival as a functioning state is of such paramount interest to Washington that American investment is a geopolitical necessity. To salvage the republic, Lebanon is not attempting to negotiate a sovereign peace it cannot enforce. It is attempting to convince Washington that investing in a Lebanese state is the only viable alternative to the permanent entrenchment of a sprawling Iranian proxy network.

To comprehend the posture of Beirut, one must deconstruct the illusion of the bilateral talks with Israel. The primary objective of the Lebanese delegation is not to trap Israel in a diplomatic masterstroke, but simply to remain in the room, demonstrating good faith, exhibiting state-like behavior, and signaling a willingness to engage within a shaky but still vital international order.

The true counterpart in these meetings is the United States. It is an exercise in proving institutional viability to the Americans. By repeatedly showing up in Washington, Lebanon secures the political capital required to survive. This relationship with the United States is still the primary tie that can deliver structural dividends: vital funding for the Lebanese Armed Forces, diplomatic cover, and occasional leverage to restrain Israeli escalation. Paradoxically, gaining the confidence of Israel’s primary enabler is the only mechanism Beirut possesses to extract any concessions from Tel Aviv.

The Beirut-Washington dynamic

Executing this strategy requires navigating a political landscape in Washington that is highly complex. Washington operates as a labyrinth of competing interests fractured between traditional political wings, the administration, Congress, and, where Lebanon is concerned, deeply entrenched diaspora networks that often work at cross purposes.

The Lebanese diplomatic strategy relies heavily on a triad of American power centers, deeply influenced by the Lebanese diaspora. First is the Oval Office, where familial ties and personal affinities elevate the profile of Lebanon within an administration where executive attention is paramount. The presence of influential Lebanese Americans in high level advisory roles provides Beirut with internal channels that are crucial for maintaining presidential goodwill.

The second pillar encompasses the National Security apparatus and Congress, navigated by established lobbying infrastructure like the American Task Force for Lebanon (ATFL). While executive envoys handle the White House, these task forces leverage decades of bipartisan relationship building to sustain funding and political support within congressional committees. They provide a stabilizing force, often guided by seasoned figures who understand the brutal realities of Lebanese constraints and help keep the bilateral relationship on the rails despite periodic crises.

The third and perhaps most vital pillar is the United States military. Central Command knows the Lebanese Armed Forces (LAF) better than the Lebanese state itself does. The Pentagon views the army as a critical, albeit heavily constrained, defense against total institutional collapse. While American defense officials harbor exasperation over the Lebanese army’s inability to confront Hezbollah, the uncomfortable reality is that Lebanon’s security has always been managed by proxy. The LAF’s incapacity has been shaped in no small part by decades of deliberate international underinvestment, designed to ensure that the army never posed a threat to Israel. This created the security vacuum Hezbollah moved to fill. Handing over Lebanon’s security to external powers has never led to stable outcomes in the region.

To engage this complex Washington ecosystem, Beirut has fielded a negotiating team built less for technical boundary disputes and more for political signaling. The delegation balances two distinct archetypes of Lebanese statecraft. One wing of the team, anchored by figures representing the presidency, provides unshakeable nationalist credibility. Rooted in Lebanon’s south, this presence ensures the delegation cannot be easily pressured or dismissed as out of touch with the realities of Israeli occupation. The other wing, led by Lebanon’s ambassador to the United States, provides the dynamic, fluent translation of Lebanese interests into the political language of Washington, signaling to the Americans and Israelis a genuine desire for structural stability.

Together, they are managing an international lifeline. Continued engagement forces Tel Aviv and Washington to view the Lebanese state not merely as an extension of armed factions, but as an independent entity worthy of preservation.

Vying for a piece of Lebanon

Any discussion of Lebanese state-building is ultimately haunted by the specter of Tehran. Iran insists on keeping its Lebanese card firmly in its geopolitical deck. Although the utility of Hezbollah as a deterrent against a direct Israeli strike on Iranian soil has degraded significantly since 2023, the militia remains the most potent instrument Tehran possesses for confronting Israel and extracting leverage from the United States. Iran remains committed to preserving Hezbollah’s vanguard status regardless of the catastrophic cost to Lebanon — to its civilian infrastructure, demolished by Israeli military action, and to its institutional viability, eroded by both internal dysfunction and external aggressions.

This reality imposes an absolute ceiling on what the current negotiations can achieve. The fundamental demand of Beirut, an Israeli withdrawal from Lebanese territory, is contingent upon conditions that the Lebanese state has no power to enforce. Israel systematically destroys entire villages while demanding the disarmament or significant pullback of Hezbollah; Iran categorically refuses. The current fear is that there is no foreseeable pathway for an Israeli withdrawal or the disarmament of Hezbollah. The result is a diplomatic paralysis dictated entirely by foreign capitals.

This hegemonic veto over Lebanese sovereignty exposes the desolate domestic reality of the state, which is further exacerbated by profound internal divisions. The Lebanese negotiating position is inherently hampered by a fractured government where the President, the Prime Minister, and the Speaker of Parliament often pull in contradictory directions.

Furthermore, the state is buffeted by competing international pressures. While the United States pushes for rapid stabilization, regional powers like Saudi Arabia and Turkey apply their own competing pressures. Riyadh works to consolidate Lebanon’s negotiating front while simultaneously resisting any settlement that would draw Beirut into Israel’s sphere of influence, and Ankara positions itself as a counterweight to Israeli regional hegemony rather than a facilitator of a peace agreement. These counterpressures push the Lebanese presidency to constantly triangulate between patrons and undermining the cohesion of the state. Consequently, the government has operated for decades as a junior partner in its own security apparatus, ceding the monopoly on violence to a deeply entrenched non-state actor backed by foreign powers. Today, that institutional erosion is nearly absolute. The government cannot negotiate a sovereign peace because it does not control its own territory.

Given these intractable realities, the most worrying short-term outcome of the current diplomatic push is a managed fragmentation. Should Washington and Tehran reach a broader regional accommodation, they might lean on Israel and Hezbollah to impose a lasting ceasefire, creating a tactical pause of a year or two to allow for basic reconstruction. But this would not be a restoration of the Lebanese republic.

In such a scenario, the country remains carved into three distinct spheres of influence: an Israeli military occupation entrenched in the south, Hezbollah secured in its parallel enclaves, and the Lebanese state squeezed in the middle, attempting to govern a fractured archipelago of uncontested zones. This tripartite Lebanon is inherently unstable, mirroring the volatile status quo of the 1980s and 1990s, where foreign occupation and armed non state actors trap the country in a perpetual cycle of conflict.

Scenarios for a better future

Western diplomatic rhetoric often frames Middle East peace agreements through the utopian lens of economic dividends, the promise that laying down arms will inevitably unlock regional connectivity, foreign investment, and sweeping prosperity. For Lebanon, this narrative is a flawed distraction from the grim, immediate work of national survival.

A sharp line can be drawn between two distinct economic horizons. The seismic, transformative boom that would follow full regional normalization, drawing massive investment and linking Lebanon into a Mediterranean economic corridor with Israel, Syria, Cyprus, and Turkey is an inaccessible vision in the current strategic and socio-political environment.

What remains accessible, however, is a realist’s path to greater stability. This does not require resolving the century old Arab-Israeli conflict; it simply requires the Lebanese state to resume the fundamental duties of governance in the areas it still nominally controls. A lasting ceasefire would allow the state to begin cleaning up the catastrophic banking crisis, overhauling the paralyzed electricity grid, stabilizing digital infrastructure, improving transportation networks, and completing a second airport. These are the basic mechanics of survival, fueled by diaspora remittances and independent of the weapons of Hezbollah or the occupation of Israel.

Furthermore, the economic rationale for a ceasefire centers around stemming apocalyptic hemorrhaging before new wealth can be generated. The most lucrative economic policy Lebanon can adopt regarding Israel is simply avoiding the recurring total wars that annihilate billions of dollars in infrastructure and capital every few years. Merely averting that cyclical destruction constitutes a massive economic benefit.

To achieve this, Lebanese policymakers must look to the cold, pragmatic models of Egypt and Jordan, rather than the expansive commercial normalization seen in the Gulf. The normalization model of the United Arab Emirates relies on fundamentally different social and economic backgrounds that simply do not translate to the Levant. The goal for Lebanon is not cultural normalization, which remains socially and politically unpalatable to vast segments of the population, but strict, state to state conflict management.

In Egypt and Jordan, a cold peace allows state ministries to manage shared electricity grids, gas rights, and border security at arm’s length. Even a highly restricted relationship, where Lebanese and Israeli ministries manage maritime borders and energy needs through indirect channels, much like how Beirut historically engaged with Damascus to resolve infrastructure and digital crises during periods of political tension, would yield massive economic relief.

Pursuing this pragmatism is incredibly difficult given the volatile political climate in Israel, where ruling right-wing factions push aggressively for territorial seizures at immense human and environmental costs, making the state a severe, ongoing regional disruptor. Yet, for the Lebanese policymaker, this hostile geography cannot be an excuse for institutional paralysis.

The alternative is a commitment to endless, open warfare. But for a state facing economic and institutional collapse, perpetual war offers no viable future. Governance, in this context, requires severe realism. The state must find a way to stabilize the country and protect its citizens, even when the underlying regional conditions remain hostile.

It is a deeply uncomfortable reality, but one that demands rigorous pragmatism. This unsentimental approach to crisis management should not be framed as a choice between desirable outcomes, but as a severe triage where the preferences of the state are irrelevant. Policymakers must focus entirely on the treatment required for survival, regardless of how unpalatable the underlying geopolitical conditions may be.

Institutional triage

For policymakers in Beirut and Washington, the path forward requires abandoning the search for a silver bullet. There is no immediate diplomatic maneuver that will unilaterally disarm Hezbollah, evict Iranian influence, or guarantee a permanent Israeli withdrawal. The Lebanese state remains crippled by institutional atrophy and foreign hegemony. But acknowledging this reality is the prerequisite for a functional strategy.

The immediate mandate for the Lebanese government is an incremental, almost tedious, reclamation of domestic sovereignty. The longer the state delays, the greater the chance that the outcomes Lebanon most fears—namely, cyclical wars and Israeli territorial seizures—will come to pass. The state cannot yet challenge Hezbollah in the South or in the Dahieh, but it can aggressively reassert control where it does not have to fight for it. This means consolidating unquestioned authority over critical infrastructure like the airports and the seaports, securing administrative Beirut, and reinforcing the presence and services of the state in uncontested regions such as Kesrouan, Metn, Chouf, Jbeil, Batroun, and Akkar.

By proving its competence and monopolizing security in these safe zones, the state can begin to rebuild its institutional credibility, both with a deeply cynical Lebanese public and with the skeptical international partners whose financial and military support is vital for its survival.

There are glimmers of hope on the distant horizon. Broader geopolitical realignments, particularly potential shifts in Syria, may eventually precipitate a strategic eclipse of Iranian proxy influence, opening a window for the reemergence of a fully sovereign Lebanese republic. But waiting passively for regional tides to turn is not a substitute for governance.

Until that window opens, the survival of the republic depends entirely on treating its profound vulnerabilities through rigorous, unglamorous institutional rehabilitation. The state must function as a defense against total collapse, patiently accumulating capacity, territorial control, and international goodwill until the geopolitical weather finally breaks.

June 9, 2026 0 comments

comment Information & Communication Technology

The soul of the machine

by May El Hachem May 26, 2026

written by May El Hachem

There is a woman at Anthropic whose job title, in plain English, is something close to the keeper of Claude’s conscience. Amanda Askell, a philosopher with a doctorate in ethics from NYU, leads what the company calls its personality alignment team. American cultural magazine The New Yorker described her as supervising “Claude’s soul.” In January 2026, she was the primary author of Claude’s constitutionification: a document designed to make one of the world’s most powerful AI systems behave with honesty, care, and moral seriousness.

I find myself thinking about her a lot lately. Not only because I use Claude like another 20 to 30 million users estimated by media, but because I am a Lebanese lawyer, and I have spent the last two years watching what happens when the people who build artificial intelligence (AI) systems have no Amanda Askell at the table at all.

The Ones Who Said No

In April 2026, the Pentagon, the headquarters of the United States Department of Defense, announced that it had struck classified AI deployment agreements with eight major technology companies: SpaceX, OpenAI, Google, Microsoft, Nvidia, AWS, Oracle, and a lesser-known firm called Reflection. The deal would place AI systems directly on classified military networks. The announcement was notable for what it contained. It was extraordinary for what it did not: Anthropic was absent from the list.

The reason, reported by American news media CNN, was not that Anthropic lacked the capability. It was that Anthropic had insisted the Pentagon include guardrails — specific limitations around civilian surveillance and autonomous weapons applications. The Pentagon’s preferred contract language used the term “unrestricted-purpose.” In late Febrary, US President Donald Trump announced a ban on Anthropic use in US defense contracts by both the Pentagon and contractors working with the defense department.

In other words, the one AI laboratory that drew a hard ethical line was penalized for drawing it, whilst the companies that asked no inconvenient questions got the deal. In the political economy of militarized AI, conscience is apparently a competitive disadvantage.

How a soul gets renegotiated

The story of OpenAI’s journey to that same table is worth telling in full, because it is the story of an entire industry’s moral trajectory compressed into three years.

In 2023, OpenAI’s usage policy explicitly banned military applications, weapons development, and warfare use cases. The prohibition was clear. Then, as Tech Insider, a subset of business news site Business Insider, has since documented, the language softened through 2024 and into 2025, exceptions multiplied, and by February 2026, following Anthropic’s refusal, the company had signed its own classified Pentagon deal. The company that once said it would not build tools for warfare is now, by contract, building tools for unrestricted purpose in warfare on classified networks.

OpenAI underwent a significant structural shift that positioned it for profit by undermining, removing and renegotiating its ethical guardrails.

What unrestricted purpose looks like

I want to be careful here not to overstate Anthropic’s virtue. The giant in large language models (LLM) development is a private company with investors and a commercial logic of its own. Refusing one Pentagon contract is not the same as renouncing military AI altogether.

The militarization of AI is already well underway, across conflicts and continents. In January 2026, the Brennan Center revealed that the Pentagon used AI, including Anthropic’s Claude, in its operation in Venezuela that led to the capture of Nicolás Maduro. In Iraq and Syria, the Pentagon deployed the Maven Smart System: an AI targeting platform built by data analytics company Palantir to identify airstrike targets from satellite imagery, drone feeds, and sensor data. As the Brennan Center for Justice reported in March 2026, Maven’s algorithms could correctly identify a tank in good weather only about 60 percent of the time, dropping to 30 percent in snowy conditions; commanders were nonetheless approving strikes on its recommendations.

In Ukraine, AI-enabled drones now navigate and select targets autonomously when GPS is jammed, with strike accuracy reportedly rising from around 30–50 percent to 80 percent, as American business magazine Forbes reported in September 2024; earlier Ukrainian drones relying on remote human operators were gradually rendered ineffective once Russian electronic warfare units learned to jam their communications links, as the Hudson Institute documented. Across these conflicts, a pattern is taking shape: AI compresses the kill chain, human review becomes nominal, and accountability diffuses until it disappears.

Gaza is where that pattern has been documented in the most granular and damning detail. The Israeli Defence Forces deployed AI systems that have since become case studies in what happens when targeting decisions are handed, even partially, to machines. One dubbed “The Gospel” reviewed surveillance data and recommended bombing targets — buildings, structures, locations — to human analysts. Another, “Lavender”, as Israeli-Palestinian news publisher +972 Magazine reported in April 2024 based on the testimonies of six Israeli intelligence officers, was an AI-powered database that listed as many as 37,000 Palestinian men linked by algorithm to Hamas or Palestinian Islamic Jihad, and was used for target recommendation. Lavender worked in tandem with “Where’s Daddy,” an AI tracking system designed to monitor the locations of suspected militants and notify operators when they entered their family homes, allowing the military to strike them there.

One source told +972 Magazine they invested 20 seconds for each target, processing dozens per day, with — in their own words — “zero added-value as a human, apart from being a stamp of approval.” During the initial weeks of the war, the number of civilians considered acceptable collateral damage for each AI-flagged target was fixed at up to 20: applied automatically, without assessing the actual threat posed by each individual. As one intelligence officer told +972 Magazine: “The targets never end. You have another 36,000 waiting.”

Evidence from a classified Israeli military database, reported by The Guardian in May 2025, revealed that only 17 percent of the more than 53,000 Palestinians killed in Gaza were combatants, meaning 83 percent were civilians. This is what the logic of unrestricted-purpose AI produces when it meets an actual war: not collateral damage in the legal sense, but an endless pipeline of targets processed at machine speed, with the dead counted not as individuals but as an acceptable statistical margin.

The governance conversation has not caught up. International humanitarian law was built around a model of human decision-making: a commander, a judgment call, a chain of accountability. Lavender breaks that model not by removing humans from the process, but by making their presence nominal. According to legal analysts writing in German and English scholarly blog Verfassungsblog, the review of each individual case took only 20 seconds, during which time the human operator would often only confirm that the target was male. Technically, a human was in the loop. Functionally, the loop was a rubber stamp.

This is the gap that no existing legal framework adequately addresses, and it is the gap that AI companies bear the onus of narrowing.

Where does a soul find its meaning and purpose?

I return to Amanda Askell and her document about Claude’s soul. I do not mean to be dismissive of it. The attempt to build values into a system from the ground up, to treat character as something that can be designed with care rather than bolted on as an afterthought, is genuinely serious work. The Claude’s constitution is a more rigorous ethical document than most corporate codes of conduct.

But here is the question her work raises, from where I am sitting: a soul is only as meaningful as the world it inhabits. A system built with exquisite ethical care can be deployed in contexts its designers never sanctioned, by institutions that never shared its values, on populations that had no voice in any of it.

The soul of the machine is a question about design. Who bears the cost is a question about power. And right now, those two questions are moving in opposite directions.

The companies that asked hardest questions lost the contract. The companies that did not are now embedded in classified military networks. The systems that encoded “up to 20 civilian deaths” as an automated threshold were built by humans who, somewhere in the process, made a series of choices, and the people on the receiving end of those choices were not consulted at any stage.

Responsible AI is still possible. But its survival depends on something the market has just demonstrated it will not provide on its own: a cost for abandoning it. Right now, the cost flows entirely the other way: Anthropic paid a price for its principles; OpenAI was rewarded for abandoning them; and Gaza demonstrated, at devastating scale, what the logic of unrestricted-purpose AI produces when it meets an actual war.

The question is not whether we have crossed a line, because we have. The question is whether enough people and I mean lawyers, policymakers, technologists, citizens are willing to treat that fact as the emergency it is, rather than the background noise of a world moving too fast to stop.

May 26, 2026 0 comments

Business Comment Economics & Policy

The Middle East Is Being Reshaped

by Elias Naim May 22, 2026

written by Elias Naim

The world is undergoing a profound reordering, and nowhere is this more visible than in the Middle East. Over the past two and a half years, the region has experienced rapid developments that would normally take decades to unfold. While public discourse often frames these changes in terms of religion, ideology, or terrorism, these factors largely serve as a cover for deeper dynamics: the real struggle revolves around national interests, access to resources, and the ability to build influence. The region can best be understood not only through its political borders but through its position within global connectivity networks. In this context economic and energy corridors are—as perhaps they have always been—instruments of redistribution of influence and power.

To understand this shift, one key moment stands out. In September 2023 during the G20 summit in New Delhi, the India–Middle East–Europe Economic Corridor (IMEC) was launched. This ambitious initiative aims to link India to Europe via the Gulf and the Eastern Mediterranean through an integrated network of ports, railways, and logistics. Beyond its economic significance, the project represents a strategic response by the U.S. to Russia’s north-south transit routes which enables Russia to circumvent Western sanctions, and to the Chinese Belt and Road Initiative (BRI), which seeks to redraw the map of influence in Eurasia. It was in this context that Washington actively pushed for normalization between Israel and the Gulf states, as the corridor’s viability depended on it. Less than a month later, the region was drawn into a new cycle of conflict following the events of October 7. The tensions surrounding Israel appeared not to be entirely disconnected from the corridor announcements, particularly after U.S. President Joe Biden hinted in an October 25th, 2023 press conference that the India–Middle East–Europe Economic Corridor (IMEC) may have been among the factors behind the attack. This comes as Iran and Turkiye continue to view ongoing instability as an opportunity to strengthen alternative transit routes and sideline corridors that bypass their territories.

What we are witnessing this spring 2026 is a continuous process of a broader reshaping of the region, where military force is one of several tools used to secure influence, domination and strategic positioning. This reality is particularly visible in the Strait of Hormuz, which the International Energy Agency described in February 2026 as “one of the world’s most critical oil transit chokepoints,” with nearly 25 percent of global seaborne oil trade passing through it and few viable alternatives available in the event of disruption. For Iran, the ability to threaten or disrupt this passage is both a military tool and strategic lever that grants Tehran significant regional influence and ensures it cannot be excluded from any future regional order. At the same time, alternative routes designed to bypass these chokepoints have increasingly emerged. In an interview with Newsmax, an American television channel for political commentary, on March 30, 2026, during the ongoing war, Israeli Prime Minister Benjamin Netanyahu argued that a long-term solution to the Strait of Hormuz crisis would involve rerouting Gulf oil and gas westward through pipelines crossing Saudi Arabia toward the Mediterranean, thereby bypassing Iran’s geographic leverage over Hormuz. If realized, such a corridor would significantly reshape the region’s energy map.

In this environment, smaller countries risk being marginalized. The emerging regional order leaves little room for states without clear strategic relevance or a defined role. Here, the biggest challenge facing Lebanon emerges most clearly. Increasingly, the region is shifting from identity-based alliances to interest-based alliances where leverage is critical. It is not military strength or resources alone that can influence these alliances, but the productive capacity of society and the strength of its economy. And Lebanese geography is no longer sufficient; Beirut no longer enjoys the exclusive transit role it held in the twentieth century when regional rivals were limited and neighboring ports underdeveloped.

In this regard, President Joseph Aoun expressed interest in Lebanon’s inclusion within the IMEC initiative during his meeting on February 25, 2026, with Gérard Mestrallet, the French President’s Special Envoy for the IMEC corridor. According to statements released following the meeting, Aoun affirmed Lebanon’s “readiness to engage within the framework of the initiative, in a manner that serves its national interests and strengthens its logistical position in the region.” Yet a fundamental question remains unanswered: can such integration realistically occur given Israel’s central role in the project, with Haifa serving as its primary logistical hub?

Securing a meaningful role for Lebanon within the region requires mobilizing and strategically employing the country’s available assets and resources. For example, organizing and leveraging Lebanese networks spread across the world could provide Lebanon with a genuine competitive advantage and stronger negotiating leverage with countries seeking access to external markets. However, this alone remains insufficient. A critical priority is limiting the outflow of human capital. Hundreds of thousands of young Lebanese, many highly skilled, have emigrated in recent years. Their retention and productive engagement are essential if Lebanon is to transform into a capable, productivity-driven economy able to claim a seat at the regional table rather than remain a passive observer. At the same time, Lebanon’s ability to become a stronger regional economic actor is increasingly constrained by the economic and social costs resulting from the ongoing destruction in the south. Damage to infrastructure, businesses, agricultural sectors, and local economies weakens national productivity and diverts scarce resources away from development and investment toward reconstruction and crisis response. In many ways, these developments themselves reflect the broader reshaping of the region through Israel’s buffer zone and territorial security/expansionist approach along its northern frontier, making Lebanon’s integration into emerging regional economic corridors significantly more difficult.

Any potential Lebanese role cannot be read independently of Syria, which constitutes a key point in any regional positioning for Beirut. The relationship with Damascus is critically structural, and requires serious negotiation on practical issues, starting with the land border crossings whose status remains ambiguous, as the conditions for their full opening and the mechanisms that will govern the movement of goods through them have not yet become clear, which makes any talk about a Lebanese role in regional trade routes based on unstable foundations. This equation becomes even more complex as Syria itself turns into a new arena for competition over energy corridors. The current American vision relies on a stable Syria functioning as an alternative corridor for regional energy flows that reduces dependence on disputed maritime routes and opens a new phase of regional integration. During the “U.S.-Syria Energy Symposium” organized by the Atlantic Council in Washington on March 26, 2026, U.S. Ambassador to Türkiye and Special Envoy for Syria Tom Barrack emphasized that the region is undergoing major structural transformations in energy and connectivity, with Syria potentially occupying an increasingly important position within this evolving regional framework.

Ultimately, the deeper issue underlying all these transformations is that Lebanon must redefine itself as a fully sovereign state capable of decisive action. Without a functioning state, the country risks continued dependence on external actors, waiting for solutions designed elsewhere rather than shaping its own future. The choice is therefore clear: Lebanon can either become an active participant in the emerging regional order or remain on the margins while others determine its role on its behalf, whether it chooses to or not.

May 22, 2026 0 comments

Economics & Policy Overview

The institutions that count

by Thomas Schellen & Thomas Schellen April 27, 2026

written by Thomas Schellen & Thomas Schellen

Key economic data for the six polities and jurisdictions yield limited or indirect information on the impact of armed interstate and asymmetric Arab-Israeli conflicts and specifically the October 7, 2023 Hamas intrusion into Israel, Israel’s state actions against the Gaza strip with the declared rationale of smashing Hamas, the aggression of militant Hezbollah and Houthi entities from Lebanon and Yemen, the confrontations between Israel and Iran, the Israeli pummeling of Lebanon, the Israeli actions vis-à-vis post-Assad Syria, and all related destruction or economic damage. The data and indicators in the infographic overleaf do, however, illustrate the economic productivity and the global perceptions thereof in the last fifty years, the last decade, and the current outlooks and perceived potentials. As shown in the data, the disparities between countries are blatant, signs of regional integration of Mashreq or Near Eastern, economies, are absent.

Data on per capita performances and trends in unemployment, inflation, and GDP growth during the time of the 7^th Arab-Israeli conflict are both revealing absolute misalignments and vast discrepancies in per capita GDP and growth thereof between Israel on one and the other five polities on the other. At the same time, the same data trends leave no doubt that all of the polities in their economic existences are under the rule of the principles that apply to all economies in the world; there is no superpower or that exists outside of or in immunity to realities and principles.

The economic profiles of key or strategic sectors do not show alignments under any regional development and integration perspective. They do not offer reasonable growth indicators or use of synergies, not for the Arab polities and their innovative interaction, and definitely not for Arab-Israeli, or in the original meaning of the weaponized, ethno-mythical term “Semite” intra-semitic, economic and socioeconomic reconciliation. The indices cited in as evidence of both realities on the ground and the global image of these realities that has been promulgated as part of a multi-decade trend to divide the productivity potentials of in their ancestries closely Semites into groups of which one has for the last 80 years been portrayed with highly favorable narratives and the other at least equally vilified despite their economic proves.

Index data and rankings in this infographic show the predilections and biases of their issuers until two of the two most-cited index series were halted at the end of the 2010s. ICT, innovation, and Artificial Intelligence related indices are showing moreover the persistence of gaps in index performance that must be expected to only widen further unless corrected both from underlying realities and regulations and from the side of biased indicator choices.

Sources and data used

World Bank Open Data series rely on a number of data sources. Per capita GDP in current USD advanced form 601.5 in 1965 to 13,664 in 2024. Per capita in constant 2015 dollar for the world is 11,876 USD. Current GDP dollar values are nominal, ie are values that are changed by inflation. Constant GDP data use a baseline year (2015) and show the GDP true volume development as per that year’s monetary power. In inflationary environments, current GDP figures will be higher than constant GDP figures, the (rare) inverse applies with deflation.

The World Bank Doing Business report and ranking was a “flagship” report of the institution, until it wasn’t any longer. The series was discontinued in some disgrace in 2019. Covering “regulations that enhance business as well as those that restrain it” domestically in almost all jurisdictions around the world, Doing Business Reports toward the end of the series listed assessed countries on a scale from 0 to 100. It ranked countries by ten regulatory pillars, plus noted labor market regulations as not ranked category. The effective range in 2017 edition, the 14^th, was from New Zealand in top spot with 87 points, to Somalia with 20.3 points. Values for the six countries covered here ranged from Israel’s 71.6 to 41.4 in Syria.

The World Economic Forum’s Global Competitiveness Report and Index was a flagship product of Switzerland-based WEF until 2020. It was discontinued amid allegations of its manipulation. The 2017-18 edition listed 137 countries on a scale from zero to 10. Top in the report were Switzerland and USA with 5.86 and 5.85 scores. The bottom-ranked Yemen had a score of 2.87 points according to parameters that according to the index legend quantified the institutions, policies, and factors that determine a country’s level of productivity. Scores for the countries in this review ranged from Israel’s 5.31 to 3.84 for Lebanon. Two topical countries of this paper, Palestine and Syria, were absent from the ranking.

The Corruption Perception Index of Transparency International covers 180 countries as meta-index of perceived levels of corruption. The 2024 edition characterizes corruption as “dangerous problem in every part of the world”. Comparing the 2014 CPI edition to its 2012 iteration, the report says nearly 18 percent of indexed countries showed improvements but acknowledged that over 82 percent of countries were stagnant or regressed in their perception of cleanliness and transparency. Scores range from zero to 100, with Denmark being the country perceived as cleanest with 90 points and South Sudan in place 180 scoring 8 out of 100. Israel has a score of 64, Syria a score of 12. Running the mouse over the territory of Palestine shows no data, despite a differentiation of its geography from Israel.

The 2025 Global Innovation Index of the World intellectual Property Organization (WIPO) and Portulans Institute ranks 139 economies and top 100 global innovation clusters by technological developments and rates of tech adoption as well as socioeconomic impact and investment patterns. Scores are awarded from 1 to 100 and additionally segmented by four income groups and seven world regions. The scores de fact stretch from 66 for top-ranked Switzerland to 11.9 for lowest ranked Niger. Israel is the highest scorer of our coverage group at 52.3 and top ranker for the northern Africa and Western Asia region. Syria and Palestine are not in the ranking, which leaves Lebanon as tail scorer at 23.6. Tel-Aviv-Jerusalem (ranked 19) and Cairo (83) are the two innovation clusters shown among the world’s top 100 innovation clusters according to the GII. Increases in MENA GII rankings are mentioned for some countries in the region, with Jordan the single country from our coverage group in the group of fast risers.

The Network Readiness Index by US-based think tank Portulans and Oxford University lists 133 countries and offers four-tiers of income categorization and six geographic categories for these. It aims to measure countries’ preparedness for digital transition and leveraging of digital technologies for economic and societal benefits. Scaled from 1 to 100, the 2024 Index shows the USA in top rank with a score of almost 79 points, followed by Singapore with 76.94. Yemen, with 20.24 points is ranked in 133^rd and last place. The scores for countries in this report are 70.46 for Israel, 47.04 for Jordan, and 44.4 for Egypt.

The eponymous entrepreneurship report of the Global Entrepreneurship Monitor (GEM) covers 56 economies. Findings are structured by three income groups and assessed as social foundations, drivers, and targets of entrepreneurs through reiterative annual surveys. Findings are scaled from 1 to 10; front runners in 2025 were the United Arab Emirates with a score of 7.1. Lowest scorer was Bosnia Herzegovina with 3.4. Only three of this paper’s countries are mentioned in the GEM, with Jordan highlighted as the best performer of the group with a score of 5.0, followed by Israel with score of 4.5 and Egypt with 4.2.

The IMF AI Preparedness Index covers 174 countries with 4 measurement pillars (hard data and perception surveys) that constitute the index: the pillars include digital infrastructure, human capital, innovation & economic integration, regulation and ethics. The range is from zero to one, but the de-facto range is from 0.18 for the Central African Republic to 0.77 for the United States of America. There are numerous countries with “no data” but Palestine is not even shown as such, Palestine (WBG) is omitted from the list of countries. The index entries are values, no ranks are provided.

The Government AI Readiness Index by private sector consulting firm Oxford Insights covers 40 categories in three pillars, government, technology, data & infrastructure. The index’s country values are shown on scale from 0 to 100, thus different from the AI preparedness index only in form of decimals. The Index shows de-facto Government AI readiness to range for Yemen in rank 188 with index value of 14.6/100 to the US in rank 1 with an index value of 87.3/100. The values for the six countries in our coverage are Egypt 55.6; Israel 74.5; Jordan 61.6; Lebanon 46.7; Palestine 37.5. Palestine is identified as “State of Palestine”, yet Syria is not shown as a country the interactive index map.

Our list of strategic sectors in the economies of the five polities have been produced from a combination of international reports and own assessments. With regard to total cost of economic recovery from conflict and/or economic return to sustainability, Executive did not come across a single credible source of information for the total cost of economic rebuilding and recovery after the October 2023-October 2025 period or any portion thereof. A mix of disparate sources and own estimations was used. All data are provided for purposes of illustrating socioeconomic realities and potentials, or the lacking thereof, and should not be relied on as baselines for economic development project plans or investments.

April 27, 2026 0 comments

Analysis Economics & Policy

A simple question

by Executive Editors April 24, 2026

written by Executive Editors

The comparatively simple question of this analytical overview, which ardently aims to avoid falling for any side’s propaganda in the latest Arab-Israeli armed conflict since 1948, is an economic one. Does war, in the sense of armed conflict between states or state and quasi-state actors, pay in the 21^st century in the short, medium, or long term?

This is a question of simplicity and even brutality – the best and most detailed economic balance sheet of any conflict is blatantly unable to capture and translate into quantifiable data the human price of a single collateral casualty, killed child, father, mother, or nonagenarian. Despite the topic’s apparently narrow scope, diving below the surface of the question and examining the seventh Israeli-Arab armed conflict through the lens of long-term implications reveals an incredibly complicated endeavor.

This is to say that it looks neigh impossible to undertake a full profit and loss accounting of the conflict that ensnared Israel, Palestine, Lebanon, Syria, Jordan, and Egypt on the horrible day of October 7, 2023 and exploded into uncountable horrors over the following two years until the supposed outbreak of good will in the Gaza Declaration of October 2025 and its ratification by the UN Security Council (UNSC) in its resolution 2803 on November 17 of this year.

An obvious first obstacle to such accounting is the fact that data are not only incomplete but also still in flux. While the flow of aggressions and atrocities has receded in recent months, destruction and violations of human life, health, and dignity are still wrought against individuals and families are ongoing as of this writing.

A correlated second obstacle to full accounting of conflict impacts is deliberate data opacity. The true extent of physical destruction and damages inflicted upon them has not been disclosed by several of the involved governments and non-state actors. Moreover, military expenditures on all sides are secretive at least in parts and undisclosed in realms such as information warfare, global online opinion manipulation, cyber-aggression and -defense, and traditional propaganda.

Uncertainty moreover defines real expectations and questions of future economic repercussions – and even upside risks through increased demand for “successful” weapons systems in international markets – from legal judgements and reputational and popular backlash. This uncertainty affects the estimation of costs of their conflict behavior to Israel more than the other polities under consideration.

A universal human impact factor, for which no exclusionary myths or pseudo-scientific fake narratives work, is the vulnerability of our species to mental trauma and anguish, with likely lengthy and costly detriments from the individual level to the global community. How productivity and peaceability will be restored for individuals who suffered life-altering injuries but perhaps are afflicted even more by issues from controlling anger to carrying lasting fears and psychological scars, is not really a question for which the study of wars in distant or recent centuries has ready answers.

Fundamental questions on the economics of war, post-conflict reconstruction, and opportunity cost of war – the non-allocation of funds to trade development, integration of supply chains and production chains, joint efforts in mitigating external risks, or adjacent strategic services sectors from tourism to culture that would have good return on investment –are impossible to answer predictively.

In terms of modern game theory, the world has become accustomed to evaluating economic and societal behaviors in terms of win-lose, win-win, win-win-win, and lose-lose outcomes. Win-lose, or zero-sum scenarios, run counter to the human propensity for reciprocal altruism and building of economic alliances with mutual benefits. Thus, productive individuals and even states have a strong taste for systems that facilitate growth such as seen in the 30 years following World War II or the 20 years of the great moderation at the end of the 20^th century.

However, systems and models that have been developed during such periods, including existing economic models of leading international financial institutions (IFIs) of Bretton Woods heritage, have not been constructed with a view to global armed conflict. Other than for trade wars and commercial confrontations between and within states, they do not seem conceptually primed for evaluation of armed interstate conflict impacts or reversing the economic and societal burdens of war in a geographic context. This limits the value of consulting the wisdom of an IFI for understanding the real cost of the current conflagration in the Middle East.

Cloudy mirrors of regional economic dynamics

Regrettably, the protracted and intense conflict experiences of all polities in the region, first among them Syria, Palestine, and Lebanon but also Egypt, Jordan, and Israel, are not mirrored well – or perhaps not at all – in the world’s go-to source for economic data and opinions, the World Bank Group (WB) and the International Monetary Fund (IMF).

The most recent IMF regional economic outlook for the Middle East, Pakistan, Caucasus, and Central Asia MENAP CCA does cover only four of the polities that Executive has been looking at, and those only partially and in disjointed descriptions. The latter dichotomy starts with definitions. In terms of country groupings, the IMF lists Egypt, Jordan, Lebanon, and Syria (as Syrian Arab Republic) under the sub-category of MENA countries. What most of the world today calls Palestine is labeled WBG by the IMF, for West Bank and Gaza. Israel, on the other hand is not covered in the regional economic outlook at all.

By analytical groupings, Egypt, Jordan, Lebanon, and WBG are listed as oil importing, emerging market and middle-income economies (EM&MIs). Syria, on the other hand, is listed as an oil-importing low-income country (LIC). Lebanon, Syria, and WBG are additionally noted as both fragile and conflict-affected states. For information on Israel, one has to consult another IMF publication, the World Economic Outlook, where the self-declared Jewish and democratic state is found in the category of “other advanced economies”, 17 jurisdictions that are not part of the G7 and Euro areas (but among which Israel is the sole country located in the Middle East).

Apart from these curious distinctions that fly in the face of geographic and socio-historic realities, the headline data recorded, estimated, and projected on the six polities and their economies are incomplete and inconclusive. Real GDP growth data for 2024, 25, and 26 for Israel can be found in the World Economic Outlook but, under the IMF’s logic, not in the regional economic outlook. Data sets for Jordan and Egypt are available for these three years. However, Syria’s economic fates are not reflected in GDP growth data and these data for Lebanon and WBG are displayed only for 2024. This leaves a void of three data points for Syria and two each for Lebanon and WBG, meaning seven out of eighteen data points, with the additional caveat that forward looking data are uncertain.

Researching correlations of economic and political trends, mutual influences, gaps in regional trade and integration, or differing impacts of armed conflict of differently grouped economies under the IMF lens is far from easy. Counterintuitive to the region’s heavy conflict experience between 2023 and 25, the IMF regional outlook posits that the economic performance of the region has been “generally robust in 2025“ and opens its first of two chapters by reiterating that regional economies have “shown resilience so far in 2025”, despite global uncertainty and tensions that included “a short-lived” conflict between Israel and Iran in June.

Uncertainty and risks

The IMF says in its latest regional outlook – first chapter – that “GDP growth in the MENAP region is projected to strengthen in 2025 at a faster pace than anticipated in May”. As for risks, it cites primarily fiscal, monetary, economic and geoeconomic as well as climate risks and policy weaknesses for countries in the entire region. The report mentions, although not in a prominent manner, that geopolitical tensions remain a main risk for regional economies, with a specific acute risk of renewed escalation of the Iran-Israel conflict and the danger that “the unresolved Gaza crisis could undermine regional economic and trade stability to a greater extent than currently assumed in the baseline.”

A second chapter of the regional outlook highlights findings from a spring 2024 regional outlook: that in the MENAP and CCA regions, “output per capita remains, on average, about 10 percent below its pre-conflict trend a decade after the start of a severe conflict”. The chapter seeks to academically add to the discussion of factors that can be drivers of post-conflict recovery and advocates for “macroeconomic stabilization efforts, financing, including international support measures, and structural policies”. The chapter helpfully states that “boosting the chances of a successful post-conflict recovery requires a comprehensive strategy, calibrated to economy-specific circumstances” and cites the importance of further research.

The IMF’s sedate approach differs from papers by the World Bank that raised the ‘question of Palestine” in December 2024. Decrying the conflict’s “catastrophic impact on the Palestinian economy” the World Bank estimated the GDP contraction in 2024 at 26 percent and said that all sectors in Palestine had been severely affected, “with construction, manufacturing, services, and trade experiencing the most significant declines”. To address the country’s deep economic crisis and avert a socioeconomic collapse and further worsening of poverty “will require several critical and urgent actions from the Palestinian Authority, the government of Israel and the international community.”

Assessments without clear solutions

A wider assessment of the regional conflict landscape comes from the Armed Conflict Location and Event Data (ACLED) academic project and NGO, although these data offer no more insights into the economics of the conflict and eventual post-conflict economic solutions than the World Bank’s brief reference to Palestine’s national economy.

The intensity of conflict – tracked by ACLED – in 2024 saw Palestine as the polity suffering the largest impact of conflict in the world as analyzed under four categories of deadliness, diffusion, fragmentation, and danger. Syria and Lebanon were ranked in third and seventh place of most-afflicted locations. This ranking shows Syria as being 30 places higher in the ranking of conflict intensity than Israel. Egypt and Jordan were found less affected by further wide margins, at ranks above 70 and 100.

In the organization’s 2025 conflict index, Palestine and Syria were still ranked in first and third position for total conflict exposure. Lebanon dropped out of the top ten most conflict intense counties to a still very high total conflict intensity ranking of 19, Jordan and Israel also dropped further, but Egypt’s ranking indicated a slight increase in conflict intensity. According to ACLED, the conflict profiles of Eastern Mediterranean countries were embedded in a global conflict landscape where “high levels of conflict became the new normal”.

From a statistical analysis perspective, however, the conflict intensity in the region does not translate into a measure of the recent Israeli-Gaza conflagration’s economic dimension and the impairments of national productivity in countries affected by IDF actions. Similarly, the economic repercussions of the latest conflict in Palestine are not reflected in global analyses by the Australia-based Institute’s for Economy and Peace (IEP) which found in the 2025 Global Peace Index that the economic impact of violence across the world was equivalent to 11.6 percent of global economic activity.

IEP, which observes global peacefulness and this year rung the alarm over 17 years of incrementally declining global peacefulness, assesses the economic impact of violence per country based on numerous factors that extend beyond armed conflict impacts. Syria and Palestine are shown as two of the countries with the highest economic cost of violence as share of GDP in 24, stating this cost at 33.97 and 19.42 percent. This perspective, while indicative of the overall economic burden of violence to a polity in purchase-power-parity terms, is of limited utility for assessing the actual cost of the 2023 – 24 war and the October 7, 2023 terror incursion from Gaza into Israel.

Propaganda and war economics

It is undeniable that the propaganda, information warfare, and cybernetic dimension of militaristic and militant opinionating in the latest Middle East conflict involving Israelis and Arabs looms larger than at earlier times of warfare in history. Within the discourses of six polities covered in this report, debates of social constructs and partisan words of mass destruction from genocide to anti-Semitism have been embedding into the minds everywhere in reach of communication technology.

Deep fault lines and towering needs

Measuring and comparing economies in their geographic environments and also in their peer groups is standard practice for entities from the World Bank Group to the World Economic Forum. However, no reports of IFIs and global economic think tanks seem to offer analyses on the long-term cost and opportunity costs of regional conflicts.

Additionally, there were no uniform causes behind economic downturns and ultra-deep recessions in three of the territories. The economy of Gaza, but not of Palestine, was wiped out by bombings and ground intrusions between October 2023 and the October 2025 ceasefire (and the erasure continued in the month after the ceasefire); Palestine in its entirety nonetheless suffered an estimated GDP contraction of 26 percent in 2024.

The neighboring Lebanese economy, which took an estimated $6.5 billion dollar hit in war destructions and damages in 2024 and saw its GDP drop 7.5 percent, suffered its more severe meltdown – cumulatively estimated 38 percent of GDP for three years – starting from 2019 and entirely due to factors that were not prima facie caused by external conflicts. But it furthermore suffered impacts of undetermined magnitude from the peace waged by Israel in 2025.

The causes of the Syrian meltdown include economic sanctions, devastation from internal conflicts with the militants of the Islamic State (ISIL), and the corrupt politics and oppressive system of Assad dynasty rule from 1971 until December 2024. The need of rebuilding destructed infrastructure and real estate assets that were incurred due to internal strife between 2012 and 2018 was already estimated at $100 to 300 billion (in the Lebanon Economic Vision document of consultancy McKinsey).

The recent World Bank “conservative best estimate” of $216 billion cost of restoring physical assets – infrastructure and building assets – with a cited possible upside margin of another $129 billion, sounds like a safer bet for an analyst without skin in the game than for an imaginary master contractor who would enter a bid for the project. War impacts on Jordan and Egypt by contrast were indirect and concentrated in indirect impacts on shipping via the Red Sea – to Jordan through the Gulf of Aqaba and for Egypt because of rerouting of vessels away from its Suez Canal.

Impediments to tourism were less severe for both countries than for Palestine, Lebanon, and Israel. Other than that, by the feeble amount of data that are fully transparent, the cost of warfare for Israel was minor in terms of suffered destruction yet economically poignant in terms of economic losses incurred because of military duty obligations of many Israeli citizens and because of ordnance and weapons systems that had to be restocked after their use in defense, retaliatory sorties and punitive air raids directed at Gaza, Lebanon, Iran, Syria, and Yemen.

Fortunetelling for six polities

The economic future of the six polities is murky with more downside than upside risks for five of them and obfuscated with perceived upside risk for one of them. The cost of economic salvation – that is, the price tag of investments that would elevate Egypt, Syria, Lebanon, Jordan, and Palestine into a higher tier of income, employment, productivity, social safety and ecological sustainability – could range anywhere from one to three times their collective annual GDP estimated for 2024.

In numbers, that means costs of one trillion dollars are entirely in the realm of the economically, socially, and environmentally needed. Investment potentials, preliminary World Bank assessments, and rose-colored national plans suggest that a low-ball estimate of salvatory cost would exceed Syrian and Palestinian GDP each by multiples – estimated $214 billion for Syria and $70 billion for Palestine, versus estimated 2024 GDP values of $22 and 14 billion.

In Jordan and Egypt, current national development ambitions will require, at least, the equivalent of one-time national GDP in 2025, $58 versus 53 billion in Jordan and $400 billion (estimated by observers and consultants) versus $389 billion in Egypt. In Lebanon, the economic rebirth would require about two times to two-and-a-half times GDP of the current production of goods and services (including informal activities), if one assumes that the total price tag would be $80 to $90 billion and de-facto GDP for 2025 is more than $40 billion instead of the internationally cited $25 to 30 billion.

The five polities’ hunger for funding over a decade (or two or more) could be as low as $820 billion. Their real need for investments, however, could well range anywhere from one to 1.5 percent of global GDP, putting the need firmly above one trillion dollars. In this, the region’s fragile state of investment deprivation is not unlike the situation of a starving person who cannot dare to overeat if they want to regain their sustenance. But the source of sustenance – needed investments possibly worth more than a year of national GDP – is uncertain in the best imagination and laden with past failures of mobilizing needed amounts, whether from taxes, international financial institutions, friendly states, private sources, or as hybrid public-private partnerships.

Moreover, sweeping visions such as the Jordanian and Egyptian ongoing national development concepts have been researched and drawn up in the 2010s, as evident from frequent citations and references to the World Bank Doing Business series and the World Economic Forum’s Global Competitiveness Report and Index. Newer determinants of crucial economic potentials, metrics focusing on factors such as AI readiness and AI governance, are not part of the argumentation for investing in any of the Arab polities under purview. Matter of fact, all geo-economic indexes and rankings, whenever developed, show Israel in decidedly more enviable positions than its neighbors.

For Israel, the headline development equation is much different. With national GDP of $540 billion according to World Bank open data, the Jewish state has not seen a single year of GDP contractions since 1966, except for the pandemic year of 2020. By any numerical comparison to the regional neighbors, Israel is indeed in a different category of wealth and income, of technology adoption and industrial advancement, and of readiness for the digital age.

In this arithmetic, the economic outcome of the past 80 years is undeniably a zero-sum game, with Israel as the indisputable entry in the win column of the conflict balance sheets, including the balance sheet of the most recent conflagration. The idea of turning this win-lose constellation into a win-win reality of Middle Eastern economic integration in a frame of social, religious, and cultural peace has for the past five decades been pursued with willful blindness for the economic baselines of power. The investment needs for reaching a regional integration offering growth benefits to all its polities seems still utopian in light of political and security requirements.

The other option, that the obvious win-lose status quo is hiding a lose-lose future reality of immeasurable cultural and mental health cost, plus societal, climate and environmental repercussions that are to the detriment of the entire capitalist civilization is nothing but a speculation void of appeal under the proposition of reciprocal altruism. Similarly speculative is the idea that the changes of automation, where people leave the thinking to the machines for their superior processors, and further digitization will reverse the curse of this Faustian civilization’s and its protagonists’ unending search for knowledge, money, and power into a fascination with and quest for spirit, compassion, sustainability, and reciprocal altruism.

April 24, 2026 0 comments

Analysis Economics & Policy

Healing in the ruins

by Haya Ahmed Hijazi April 22, 2026

written by Haya Ahmed Hijazi

In Gaza’s hospitals, the daily struggle for life is inseparable from the fight to manage scarce resources and staff numbers, and to find innovative solutions within impossible constraints. Doctors, nurses, paramedics and support staff are compelled to act simultaneously as caregivers, administrators and problem-solvers in an environment where every decision is weighted by both clinical urgency and economic limitation.

A healthcare system tested to its limits

According to a situation report released in mid-October 2025 by The United Nations’ Office for the Coordination of Humanitarian Affairs, 14 out of Gaza’s 36 hospitals, 10 out of 16 field hospitals and 64 out of 181 primary healthcare centres are only partially functional. Private hospitals have closed and public hospitals operate at less than 30 percent of their capacity. By the end of September 2025, Gaza’s Ministry of Health reported that 55 percent of essential medicine, 66 percent of essential consumables and 68 percent of laboratory reagents were completely out of stock. Despite the latest ceasefire, restrictions on the amount of aid trucks crossing the border—Al Jazeera reported that only half of the necessary trucks were permitted entrance as of October 15^th, and the ones entering did not carry many essential supplies—mean that medical supplies are still not reaching hospitals.

28-year-old Dr. Ali Mohammed Ziyad Al-Batta is a fourth-year urology doctor at Al Nasser Complex in South Gaza. As hundreds of thousands of Gazans were displaced from their homes in the north to the south of the Strip over the course of the two-year war, hospitals like Al Nasser Complex became a lifeline to more patients than they could accommodate. Operating the Khan Younis-based hospital became increasingly difficult amid overcrowding and a shortage of medical supplies. Doctors found themselves having to ration out pain relief medication.

Al-Batta says the announcement of a ceasefire has done little to change the disastrous circumstances he and his colleagues face every day at the hospital.

“It’s been two years of us trying to serve our people with the simplest of means,” he says. “The number of those with long-term injuries remains high; these patients require follow-up and restorative surgeries. Currently, they are waiting for the Rafah border to reopen in order to leave Gaza to receive medical treatment. For many of Gaza’s sick and injured, Rafah border has become a final glimmer of hope.”

Unpaid healthcare workers

Gaza’s economic collapse—UNCTAD, the UN’s trade and development agency, reported an 81 percent contraction in the last quarter of 2023 alone—compounds the challenges hospitals and healthcare facilities face. Dr Al-Batta is among those that have chosen to volunteer their services to preserve life and prevent the healthcare system from complete annihilation. “It has been two years since I was last paid a salary,” he says.

30-year-old nurse Khalid Abu Hasnain who works in the Emergency Department at Al Aqsa Martyrs’ Hospital in Deir El Balah, Central Gaza, is one of the luckier ones. He gets paid a small stipend of $300 a month, despite working shifts that exceed 12 hours. Responsible for both his own daughter and his orphaned nieces and nephews, Abu Hasnain says the money is barely enough to buy milk and does not cover his travel expenses, but he keeps going.

“The war has destroyed everything — homes, families, and futures — even our healthcare sector,” he says. “Doctors and nurses are working without equipment, without salaries and without rest. Yet, we are trying to prove that humanity does not die, even amid the rubble. We can’t abandon the patients.”

Making medical supplies stretch

With the limited availability and flow of cash, healthcare workers have created an informal health economy, sharing and bartering medical supplies, recycling disposables and sharing resources across hospital departments. In some instances, doctors report having to dilute medication to make supplies stretch. 38-year-old Dr. Nadia Hamdan works as a gynaecologist at Al-Shifa Medical Complex in North Gaza. Before the war, Al Shifa Medical Complex in the Rimal neighborhood of Gaza City was Gaza’s largest hospital. After suffering repeated bombing and a ground incursion which left it half-ruined, the hospital now runs limited services, including a makeshift outpatients department and emergency ward.

On top of treating her female patients, Dr Hamdan says she has the additional burden of finding new ways to be resourceful with the limited medical supplies and equipment on offer. Being able to just practice medicine is now a luxury.

“Oxygen runs out, sterile gauze is absent and essential medications are limited,” she says. “We disinfect and reuse instruments because electricity is unreliable and the generator cannot power all equipment. Every patient encounter is also a management exercise — we ration, prioritize and improvise constantly.”

Harbouring innovation and technology

Adapting through the use of innovation and technology is essential for the survival of Gaza’s fragile healthcare system. Solar panels, improvised incubators and remote training reduce costs and sustain operations. Medical students assist under supervision and NGOs provide healthcare workers with workshops on resilience, resource management and multi-role competencies. Doctors and healthcare workers utilise social media and digital platforms to carry out consultations or fundraising efforts.

“We cannot wait for suppliers,” says Ahmed Barakat, a bio medical technician at the European Hospital in South Gaza. “Spare parts are unavailable, so we improvise. Sometimes we use a 3D printer to print replacement parts, or we repurpose older equipment or repair machinery with locally sourced materials. Each solution saves money and prevents further strain on the health system.”

Hospitals struggling to operate in the absence of fuel and electricity

Before the war, 57-year-old Dr Naji Al-Qarshli used to work as an obstetrician and gynecologist at Kamal Adwan Hospital in Beit Lahia, North Gaza. He was displaced to the west of North Gaza after the area he lived in was completely destroyed, where he now works at the Patient Friend’s Benevolent Society Hospital.

Patient Friend’s Benevolent Society Hospital has now become the Gaza Strip’s main maternity and pediatric hospital according to an interview that Medical Aid for Palestinians conducted with its medical director in March of 2025. Dr Al-Qarshli and his colleagues work tirelessly to treat a neverending stream of women who go there to give birth. It is also one of only a few remaining hospitals in Gaza to have a NICU (neonatal intensive care unit). At the height of the war, Dr Al-Qarshli says maternity wards were being transformed into multi-use emergency rooms for the injured, alongside those who had come to give birth.

“When the electricity cut, we delivered babies by the light of our cell phones, searching for sterile gloves as if we were hunting for treasure,” he shares. “Our psychological state deteriorated, we lost a lot of weight and we were treating patients in a state of panic. Many of our pregnant patients arrived to the hospital after hours of walking, having been displaced from their homes. We were trying to preserve the lives of mothers and fetuses amidst an unforgiving reality.”

During a neonatal emergency, Barakat of European Hospital recalls being among staff that had to manually ventilate infants in order to keep them alive because the generator had stopped working.

“At 3am one morning, an incubator failed. We manually ventilated infants before the generator died. Hospitals rely on ten hours of full power daily; at night, many units become non-functional, impacting both health outcomes and operational budgets.”

From full-time gynecologist to volunteer medic: How Gaza’s war forced me to adapt

During the past six months, I personally lived and worked across North and South Gaza, experiencing both displacement and professional upheaval. My private gynaecology clinic was destroyed in the bombardment. I pivoted to volunteer work in public hospitals and field clinics, where demand exceeded available resources.

To reach women unable to travel to hospitals, I launched remote consultations via social media platforms, providing guidance and follow-up care. This digital approach functioned as both a clinical lifeline and an economic solution, extending limited resources without adding infrastructure costs.

Recognizing the ongoing material and financial scarcity, I established a free medical tent supported by online fundraising campaigns. Donations funded essential medications, medical supplies and operational logistics, creating a micro-healthcare economy sustained by community contributions and volunteer hours.

Maintaining services amid destroyed infrastructure, unpaid staff and scarce resources demanded strategic allocation, financial ingenuity and creative problem-solving. Through volunteer coordination, digital outreach and fundraising, I was able to continue delivering critical care to pregnant and nursing women, mitigating economic loss and sustaining the fragile healthcare ecosystem in Gaza.

Economic resilience at the heart of Gaza’s healthcare system

Gaza’s healthcare system today illustrates the inseparable link between economic resilience and medical care. Each ward, each procedure and each hour worked by a volunteer is not only a clinical intervention but also a strategic economic decision. Hospitals operate as micro-economies, where budgeting, resource allocation and improvisation determine survival both for patients and for the system itself.

Sustaining Gaza’s healthcare requires more than humanitarian aid. It demands structured economic planning, local manufacturing and coordinated community support. Investing in staff, creating emergency financial reserves and training multi-skilled personnel not only secures health outcomes but also strengthens the broader economy.

Ultimately, the story of Gaza’s healthcare system is a story of human ingenuity at the intersection of crisis, health and economy. The resilience demonstrated by healthcare workers, volunteers and communities proves in my experience of the past three years, that even amidst profound economic collapse, strategic innovation and human dedication can sustain life, preserve livelihoods and build a foundation for a more robust, self-reliant healthcare system.

April 22, 2026 0 comments

Economics & Policy Q&A

An economy of future peace

by Executive Editors April 22, 2026

written by Executive Editors

In terms of number estimates, what do you see as the total cost of Lebanon’s recovery from war damages and economic meltdown, and what would you say the opportunity costs of conflict (the foregone development in Lebanon, Israel-Palestine, Jordan, Egypt, and Syria because of money spent on military expenses) were?

PS: Obviously for Lebanon there’s the immediate cost of the devastation and destruction over the last two years relating to the war, which is estimated at around USD $11 billion. And then of course there’s the entire collapse of 2019, USD $70 billion losses and so on, but that’s a broader perspective. In terms of opportunity costs in the region, the countries that were affected—obviously Lebanon, obviously the Palestinian economy—very devasted. The Jordanian, UAE, Saudi [states] were not involved in the war so they did not have huge opportunity costs in that sense. Egypt had significant losses because of the Houthis and their attacks on the Red Sea. So Egypt was a significant loser as well. Syria was already shut down as an economy and is hoping to recover. I’m not sure it shut down even more, but their situation is different.

The main point [for Lebanon] here is that Lebanon’s economy has suffered for over 50 years from having an active front with Israel. It’s good to look back between 1949 and 1967-68. Lebanon had an armistice agreement with Israel. There was no military activity across the border and obviously Lebanon saw a tremendous boom, tremendous investment in the 50’s and the first two thirds of the 60’s. That was really the golden age. The armistice agreement held and there was really no active front with Israel. Then beginning in ‘68 and then the Cairo Agreement in ’69, the PLO (Palestinian Liberation Organization) opened a front from Lebanon on Israel and that started [a period of] over 50 years in which Lebanon was a front, an arena. Where Arab countries—Syria and Egypt initially, and then others, Libya and others, and eventually Iran used Lebanon as a front against Israel. So from ’68-’69 up until 2024-2025, going on up until today, you can see the enormous cost of Lebanon being an active front. So from the early 70s, then the collapse of the mid-70s, and what we’ve seen in the last decades, really an inability to fully recover after the war. And then further losses along the way in the past years.

There’s no doubt that ending the state of war and [entering] a cessation of hostilities would be a very important turning point.

What is your assessment of the direct talks that started in Naqoura?

PS: The talks on the border through the mechanism right now are a very important symbolic step. Right now they’re quite limited conversations relating to the cessation of hostilities agreement, relating to Lebanon wanting to secure an Israeli withdrawal from south Lebanon, wanting to return captives that are in Israel to Lebanon, wanting to stop Israeli attacks inside Lebanon. On the Israeli side they want to see that the area south of the Litani is completely free of Hezbollah weapons and fighting capacity. They want clarity on what the plan is north of the Litani. That’s the scope of the talks right now, quite narrow in that sense. Broader talks would have to await a different time or different system.

How long could the process take?

PS: It’s hard to say how long the process could take, but it’s possible to say that the process might fail because Israel has very clear demands on Lebanon which include the disarmament of Hezbollah. How urgently they press that demand if Lebanon cannot fully disarm Hezbollah in the near future, Israel might say well the talks are off. Lebanon has demands on Israel to withdraw from five points, stop its attacks on Lebanon and so forth. One can see from Israeli officials that they don’t seem to be in a mood to give those concessions so we will see what the talks bring. Maybe there will be positive surprises but they do look difficult for now. The risk of a continued war or significant escalation maybe is postponed a bit but is still there.

What are the risks and benefits? Are there economc benefits that came from peace agreements between Israel and Jordan or Israel and Egypt?

PS: It’s important to know that the peace agreements or the Abraham Accords are first and foremost political agreements in the sense that Egypt on its side obviously wanted to get the Sinai back, which is a huge success for it. They could not afford to remain in open warfare with Israel. That’s the essence of the agreement. Egypt and Israel did not develop significant economic agreements; that was not the Egyptian point. They maintained sort of a cold peace as it were. Jordan as well did not want to be in a state of war with Israel. That would be very costly for it. So for both countries, Egypt and Jordan, they know that if they make peace with Israel they get tremendous US support. Effectively guarantees of US support because the US would be pleased with them and the pro-Israel lobby in the US would vouch for them, would support them. So by making peace with Israel they lock in US support.

What have been the GDP gains of the Abraham accords over the past five years to the initial signatory countries, what could the economic gains be for Leb and would the Abraham Accords be the only way for reaching such outcomes?

PS: On the economic gains on the Abraham Accords I don’t have significant data, I’m not an economist, but again when you look at the four countries that signed the Abraham Accords they did it for largely political and security reasons. The UAE wanted to cement its strategic relationship with the US. They wanted Israeli support in Washington, particularly to push through its F-45 deals and other major agreements it wants to build with the US, leading up to the recent agreements on Artificial Intelligence. So again, making peace with Israel the UAE gets tremendous US support indefinitely. Bahrain similarly in a very precarious security situation—high risk from Iran—absolutely needs deep US support. So that again was one of the main reasons there. Morocco wanted US support for its claim on the Western Sahara. They got it; that was its main advantage. Morocco has no security concerns with Israel. And on the case of the fourth country, Sudan, they wanted to get off the tariff list from the US and that is indeed what happened. So the main reasons were mainly political, security and so on. Of the four, the UAE does look at economic benefits more than the others. It had maintained a very warm normalization with Israel until October 7^th. And there’s investments going back and forth—maybe not huge, but the UAE certainly does see high tech and research and other advanced technology partnerships as well as security partnerships in high tech security issues between the UAE and Israel.

For the others, Bahrain, Morocco, Sudan –of course Sudan is in civil war—but they don’t have any major economic gains.

In terms of possible effects for Lebanon, I would say two things. If Lebanon was able simply to reestablish the armistice with Israel or even a cessation of hostilities that is permanent and the Lebanese Army fully took over the country, Hezbollah no longer puts the country at risk or is disarmed, and regional investors and global investors really see Lebanon as now stable, sovereign and secure, that would definitely be a huge economic boost for Lebanon. Obviously provided also that Lebanon went through the [necessary] banking reforms so that the system would be functioning. The first scenario is to go back to the status quo before 1967. There was huge investment, and you could reap huge benefits. If one went into an Abraham Accords with Israel, you would get huge benefits. One benefit is that Lebanon would be no longer a country at war, no longer a risky place. Investors would feel confident, but also you would get the benefit of exchanges with one of the biggest economies in the Middle East, the Israeli economy. That could be in many sectors—information, technology, tourism, real estate, agriculture. There’s no doubt that there would be benefits. What the numbers would be is hard to say.

This interview was conducted via Whatsapp voice notes

Paul Salem is a senior fellow and former president of the Middle East Institute

April 22, 2026 0 comments