Q&A

Staying alive: The juggling act of the healthcare sector

by Sherine Najdi
written by Sherine Najdi

The healthcare sector in Lebanon has faced exceptional operational challenges over the past year as the Israel-Hezbollah war escalated in the south and the Bekaa before Israel began its bombardment of districts across Lebanon in September. Following the halting (or at least the significant reduction) of the Israeli aggression against Lebanon on November 26th, 2024, multiple sectors are facing repercussions in different aspects: operations, finance, and maintaining personnel while bolstering morale. Impacts on the healthcare sector were grievous in the victimization of first responders and primary healthcare centers.

 According to the World Health Organization, the conflict impacts of the past 14 months especially the period from late September to late November affected 158 healthcare facilities, predominantly through aerial attacks. Between October 7th, 2023, and November 26th, 2024, 241 health workers were killed and 292 injured while on duty. Hospitals in safe areas were spared damage but all operational tertiary facilities in the healthcare sector were inundated with patients while at the same time facing shortages and supply bottlenecks —yet maintaining operations, nonetheless.

 Executive’s interview with Roula Zahar, deputy general director at Mount Lebanon Hospital University Medical Center (MLHUMC), delves into the difficulties encountered by healthcare institutions, ranging from operational disruptions and resource shortages to financial instability and the implications of a liberalized healthcare system.

Executive: Can you tell me a bit about the challenges you’ve faced?

Zahar: It was very difficult. We had bad times. The anxiety was overwhelming, and the situation created challenges in so many ways. But we managed to adapt and keep going.

Executive: How has the crisis impacted hospital operations?

Zahar: Operations weren’t exactly halted. The work itself remained consistent in terms of delivering services, but we had to adapt significantly. Some of our staff lost their homes or couldn’t travel, so they stayed at the hospital. We provided them with food and accommodation, which allowed us to continue operating. It was challenging, but we managed.

Executive: What about staffing? Were there notable challenges in maintaining or regaining personnel?

Zahar: Absolutely. Some physicians left during the crisis, and while a few have returned, there’s always uncertainty about whether they’ll stay long-term. Retaining staff has been a significant challenge, along with addressing the issues of resources and medication. Thankfully, we didn’t face critical shortages, but there was always the fear of running out.

Executive: Did you face difficulties in obtaining specialized equipment or materials?

Zahar: Then there were various challenges regarding medication and resources. particularly with importing isotopes, chemicals, and advanced medical equipment. It remains a major challenge to access specialized treatments and materials, and this issue persists. We didn’t run out of any specific medication, but there were rumors that we might face shortages. Fortunately, that didn’t happen, but there was always this uncertainty: will we have enough medication?

Executive: What about patients’ financial situations? How has that affected your operations?

Zahar: That’s been one of the biggest challenges. Many patients can’t pay their bills, especially those without insurance. We had to seek help from organizations, but the assistance wasn’t structured well. The absence of support from the National Social Security Fund (NSSF) is a major problem, as [the fund’s financial allocations] are not covering much for patients. Insurers, too, aren’t cooperating adequately in terms of pricing.

Executive: Has the government provided any help during this time?

Zahar: In specific cases, yes, but not enough. For example, they covered half of the costs for [procedures related to] the ‘pagers’ incident [Israel’s detonation of pagers and walkie-talkies belonging to members of Hezbollah on September 17-18 that resulted in at least 35 deaths, including at least two deaths of young children, and over 3,000 injuries], but the overall support remains inadequate. The NSSF is supposed to play a critical role, but it’s falling short in covering patients’ needs.

Executive: Given the financial difficulties, is the sustainability of hospitals at risk?

Zahar: Yes, to some extent. The greater risk lies in the inability to renew or maintain equipment. Operating costs are lower than the initial capital needed to establish a hospital, but equipment renewal is expensive. Without proper cash flow or financing, maintaining quality care will become increasingly difficult.

Executive: Lebanon’s healthcare system is known for its decentralized and liberal structure. Do you think this has been an advantage or a disadvantage?

Zahar: It’s both. On one hand, the liberal system meant we had more equipment than necessary, which allowed us to avoid long waiting times for procedures like MRIs. In Europe, you might wait six months for an MRI; in Lebanon, it can be done in days. However, this system has its costs, as hospitals need to recover investments, which can drive up prices.

Executive: Do you believe there should be more government regulation in the healthcare sector?

Zahar: Regulation is necessary but should be minimal. The healthcare sector is not like other industries. I believe in a liberal approach and support the private sector, but excessive regulation could harm the system’s efficiency.

Executive: Do you anticipate repercussions for hospitals [because of the war] even after the ceasefire?

Zahar: There is always fear, but the private sector adapts quickly. During the war, private hospitals stepped in to provide care when public hospitals couldn’t. The Ministry of Health has acknowledged our efforts. Still, we need to prepare for potential future challenges.

Executive: Will hospitals start implementing contingency plans for such situations?

Zahar: We already have contingency plans since people’s lives depend on our work. However, my main concern is maintaining quality care with reduced financing. If costs are blindly cut, the sector will face serious problems.

Executive: Will staff reductions or salary cuts be necessary to maintain financial stability?

Zahar: We hope not. Instead, we aim to increase revenue by relying more on government and insurance payments rather than out-of-pocket payments from patients.

Executive: Are there any strategies to increase revenues while maintaining accessibility?

Zahar: Yes, we’re advocating for better insurance coverage and support from the government and NSSF. We’re also exploring low-cost insurance schemes and collaborations with NGOs to help cover costs for patients.

Executive: Are NGOs playing a significant role in supporting healthcare institutions?

Zahar: Yes, many NGOs are helping individuals by covering costs for patients. Some hospitals also receive direct donations [from NGOs], but this is not the case for all hospitals.

Executive: Do you have any final thoughts or comments?

Zahar: It’s been a very tough time [for the duration of the current war] but we continue to adapt and do our best for our patients and staff.

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Education planEmployee Development

Lebanon Works: A launch pad for relief and revitalization

by Sherine Najdi
written by Sherine Najdi

This article is part of ongoing Executive coverage with members of the Lebanese Private Sector Network on sectoral impacts of and responses to the 70-day September 2024 war on Lebanon. At the time of this inquiry, the Israeli aggression was still destroying homes, villages, lives, and livelihoods. This interview took place on November 20th, after a night of heavy bombardment throughout Lebanon and carpet bombing of Beirut and five days before a 60-day ceasefire was agreed upon.

Surviving a war is not only a matter of physical safety and stability but also of sustainability and continuity—employment, education, and relief. There is a conventional understanding that conflict not only causes an increase in unemployment rates and a decrease in education pursual, but also that high unemployment rates can foster an environment conducive to further conflict. As increasing attacks threaten the security of homes, workplaces, and schools, and force the displacement of around a fourth of the population, people focus their resources and energy on surviving on a day-to-day basis. While preliminary estimates of livelihood impacts project increases in formal-sector unemployment that would boost the number of affected individuals and families by several percentage points (from an already high base) by end of 2024, detriments to the mental health of children, education attainment of primary and secondary school-age youth, and employment prospects of young adults present multi-decade challenges. At this moment, it seems that the youth of Lebanon are left to struggle throughout and in the aftermath of this war; their futures are put on hold and unaddressed.

In this context, Executive sat down for an interview with Maissa Abou Adal Ghanem, Chief Sustainability Officer at Holdal Group, a regional beauty and cosmetics retailer, manufacturer and supplier. The conglomerate is an active member of the Lebanese Private Sector Network (LPSN) and its employment initiative Lebanon Works. According to Abou Adal, Lebanon Works, which was launched in 2022 to promote job creation, has become all the more vital as a platform. Witnessing challenges in the coordination of humanitarian aid and relief efforts in recent months, Lebanon Works added a Relief Hub connecting needs with channels of support. As Lebanon grapples with economic instability, social challenges, and widespread displacement, this collaborative initiative aims to connect resources with needs, empowering communities to rebuild and thrive. Through partnerships with private sector companies, NGOs, and other organizations, Lebanon Works tackles pressing issues such as unemployment, disrupted education, and the urgent need for basic necessities.

Executive: What is the main purpose of Lebanon Works, and how has it been affected in recent months?

Abou Adal: Lebanon Works serves as a platform that aims to drive a positive narrative and instill hope in the country by highlighting realistic ways for the economy to grow and create job opportunities.

Over the past four months, the platform has refocused its efforts to prioritize immediate relief and support due to escalating crises in Lebanon. While the original roadmap remains intact, components like crisis response and basic needs support have become a priority. We saw that there were so many needs and so many amazing enablers in Lebanon, and we said let us consolidate all and connect the dots and facilitate and streamline for anybody who needs it. We could not just pretend that someone else will fix this. We need to support each other.

Executive: How have companies under Lebanon Works coped with the current challenges?

Abou Adal: Many private sector companies involved in Lebanon Works have adapted [to the war] by reprioritizing their resources. Despite the difficult circumstances, they have managed to retain staff and maintain salaries, focusing on humanitarian, social, and environmental needs. Some companies provided shelters, healthcare and mental health support, scholarships and essential support to their employees and families. However, the long-term sustainability of these efforts remains uncertain. The problem is not the past two months. The problem is moving forward. Can we sustain it or not?

Executive: What specific initiatives have Lebanon Works launched to address the growing needs in Lebanon?

Abou Adal: Some among various initiatives are: the Lebanon Works Relief Hub launched a few days after we saw a wide escalation; it provides humanitarian support during crises; and three impactful roadshows that engaged stakeholders across Lebanon. The platform has successfully fostered partnerships to boost job growth and improve the livelihoods of the Lebanese people.  The platform is an aggregator and a collaborative platform that was powered by Lebanon Works when we found that the needs were very overwhelming. It’s any form of basic needs, from the tangible to the intangible, and making sure that we are tapping into the synergies, we are connecting the pieces of the puzzle. We are streamlining, and we are focusing on collaborative efforts, instead of adding more pressure on people.  

Executive: What is Lebanon Works doing to address the educational challenges caused by the crisis?

Abou Adal: Education is a core focus area. Lebanon Works is building coalitions with academic institutions, NGOs, and private sector companies to support students affected by displacement and school closures.   We are working on a coalition to make sure that the number of students who have been heavily affected now, whether it’s because they’re displaced or they couldn’t go back to school, can receive education—289 children and youth who are going back to school. We’re not reinventing new ways, we’re looking at existing solutions, and existing enablers, and just building the circle and enlarging it.

 Efforts include providing scholarships for primary to university students, facilitating access to formal and informal learning solutions, and equipping children with self-learning tools and devices. The goal is to ensure normality and opportunity for all children, even in the most challenging circumstances.

Executive: How does Lebanon Works tackle unemployment and labor force challenges?

Abou Adal: Lebanon Works functions as a job-matching platform, where companies can advertise openings and connect with local talent. While not all companies in Lebanon can maintain operations at full capacity, some sectors, such as construction and education, remain critical to rebuilding the nation and addressing unemployment challenges. 

Executive: What is the long-term vision of Lebanon Works?

Abou Adal: The roadmap [promoted by LPSN] is not changing. Despite immediate challenges, Lebanon Works maintains a long-term vision focused on sustainable development goals for 2030. By leveraging collaborative efforts and focusing on core pillars like education, equal employment, and youth empowerment, the initiative aims to contribute to a better future for Lebanon. There is a very strong educational pillar. There is also a pillar for the youth that is powered by the youth, for the youth.

Some answers have been adjusted due to the need for clarification of the recorded answers.

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Companies & StrategiesEconomy

Pivots of hope and determination

by Thomas Schellen
written by Thomas Schellen

Executive will be embarking on a collaborative project with LPSN to demonstrate how different sectors of the Lebanese economy are experiencing, managing, and strategizing under conditions of current war vis-a-vis interviews with LPSN members over the upcoming weeks.

The Lebanese Private Sector Network (LPSN) is pivoting. Its new agenda makes an emphatic plea in assertion of national sovereignty while at the same time staging a determined claim to be a partner of “economic diplomacy,” LPSN board members declare to Executive in a detailed online conversation.

According to LPSN President, agro-industrialist Rima Freiji, the network’s new course of action is geared for solutions and comprehensively working towards an economically sustained future as soon as possible. “It’s all about getting into the action and implementation immediately, whether on the policy front, on the international front or on the economy front.” she says.

Claiming their right to economic diplomacy, LPSN is championing the conviction that the country’s private sector needs, and deserves, a full seat at the nation’s local and international policy making tables and a strong role in the implementation of long overdue structural reforms and legal innovations.

Having formed LPSN in the midst of the economic crisis, the previous message of the organization’s founders from 2021-23, was “to save the liberal economy and free market. We now are moving into [sending a message] connected to sovereignty, stability, and prosperity,” comments Joe Ayache, the network’s vice president and communications strategist. “These are the three landmarks that we need to accomplish in order to reach the Lebanon that we all dream of having,” he adds.

A short but eventful history

Since its founding in October 2021, Freiji explains that the network’s first strategic win was achieved right after its formalization, through the identification of guiding principles. These principles also serve as ethical signposts today “in most everything,” she says.

Not only were they directing LPSN safely throughout different activities, such as the adoption of a job creation focus in 2023; they also proved invaluable when the specters of external shocks were looming larger and larger, since LPSN’s guiding principles fostered development of crisis preparedness plans and crisis management templates. According to Freiji, these freely shared, concise, LPSN-designed plans were greatly appreciated and widely used by local businesses and also emulated by crisis preparedness planners in crisis-hit foreign countries.

In 2023, LPSN’s attention zoomed in on the establishment of jobs and a labor market initiative they coined Lebanon Works. This initiative, Ayache says, is about “being positive about creating jobs in Lebanon”. As such, he describes the employment initiative as the third leg of a tripod. This structure’s first leg consists of public awareness building & advocacy, and its second leg of lobbying with politicians and pushing for stoppage of abuses of laws, taxes, and governmental powers.

Explaining the implementation of Lebanon Works, industrialist Hady Bsat says that the concept was “to create an interactive digital platform rather than an informative platform.” As such, the founding purpose of Lebanon Works was to enable employers, both members and non-members of LPSN, to communicate job opportunities as well as success stories of employment and business ventures.

“The underlying idea was to present positive news and show people that ‘Lebanon works’,” Bsat says, adding that an updated digital platform is currently being developed and will be released as a “space of spaces” for presentation of opportunities by employers. The updated Lebanon Works platform is intended to open expanded opportunities through partnerships with international and local organizations that are focusing on labor market development. (Further discussion of LPSN’s labor initiatives is one of several interview topics that Executive will cover with the network’s leading members before the end of this year.)

Also notably, an unplanned digital platform acting as “relief hub” has been enacted by LPSN as an emergency answer to the war and displacement crisis. According to Bsat, this hub is enabling initiatives for humanitarian relief and serves as platform to share incidents and responses by vetted organizations. 

Centrality of the aggression-induced petition 

As part of the second leg of the LPSN tripod, the network’s hue and cry for strong policy making and reform is enshrined in a new position paper that is both posted as an online petition and laid out in a parallel, more detailed document as “a call for action, a call for unity.” Related emergency demands have also been circulated by LPSN several weeks prior, in form of an “Urgent Roadmap for Stability and Recovery of Sovereignty.”

The detailed petition levels six demands. In seeking adherence to international contracts and resolutions, LPSN calls for immediate implementation of the three dated UN Security Council resolutions 1559, 1680, and 1701. Two other demands make reference to 20th century peace building efforts, one directly by asking for “immediate reactivation” of the armistice agreement of 1949, and one indirectly by proposing an internationally led “Marshall-type plan” for Lebanon’s economic recovery.

Lastly, demands relating to Lebanese sovereignty – or what a cynical observer might see as inching, incremental steps of the hesitant Lebanese polity towards sovereignty – request Parliament to immediately and “without [further] delay” elect a president of the republic. For material protection of sovereignty, the petition demands full assumption of territorial security and control by the Lebanese Armed Forces.

Groundswell of support and a pessimist’s perspective

The shorter online version of the petition was launched at the end of the first week of November. It attracted about 1,000 votes over three days of Nov 11, 12, 13 and about 100 additional signatures in the two following days. The online petition highlights the demands for implementation of the three UNSCR resolutions, for reinstatement of the state’s governance institutions, and for the creation of economic diplomacy and work towards the Marshall plan target. 

Freiji rebuts the very idea of claims that the petition and new orientation of LPSN is a pious dream of utopian immensity. For far too long, Lebanese people have been fed the lie that asking for normality is unrealistic, she argues. “We are asking for what our constitution says. We are citizens of this country, with patriotic minds, and it is very basic what we are asking for. It is not a dream and utopia.”

Nonetheless, the determined and confident tone of the petition cannot conceal the background of long policy failures and vibes of desperate wartime urgency that underpin the LPSN petition and can be perceived by skeptics as anything from blue-eyed to a desperate attempt at roping in the moon.

From the perspective of a professional pessimist on Lebanon, the economic diplomacy ambitions of LPSN might be wholly out of this world but utterly needed in their contrarian position to both the historic trajectory of the Lebanese state and the current ordeal of the polity.

In simpler words, it is nothing if not audacious and encouraging in the highest order when the petition states that “the private sector, civil society, and diaspora must lead in addressing the challenges of ineffective governance and non-state actors. By securing leadership on the economic front and a seat at the table, we can rebuild trust and partnerships with Arab and global allies.”

A context of war

This is because the context of LPSN’s new demands for sovereignty, stability, and prosperity as core aims is of course the war of Israel against Hezbollah. This war, according to endless propaganda streams issued by the Israeli government, does not aim to establish totalitarian hegemony. But from the seventh-floor vantage point of an office window looking south in Beirut’s Achrafieh district, aggressions ordered by Israeli leaders seem hellbent on achieving just that and doing so with a barrage of iron-fisted attacks that inflict economic ruin on embattled Lebanon and defy any moral, mental, and material cost even on their own population.

The assessment of any Lebanese reform and development, especially ones formulated vis-à-vis geopolitical powers that are posing in the sheepskins of global allies, is incomplete without including a note to say that every page in the Israeli playbook of warfare, intimidation, and propaganda seems written in support of an expansionary narrative. It is a narrative that contorts any ceasefire proposals into schemes of military control and intrusion that Lebanon’s combative neighbor can impose with impunity.

No to economic defeatism

 Regardless of war, the merits of defining new stability and prosperity baselines for Lebanon deserve to be noted for their constructiveness and also their resilience to defeatism – including defeatism of speculative GDP impact numbers.

LPSN board members on the one hand concur that these numbers testify to unspeakable economic devastation of the workforce and job market. On the other hand, they note how the magnitudes of losses to the private sector economy as a whole are as difficult to ascertain as they are to judge for their – albeit overall highly concerning – implications on the coming two years.

Damage counts are tenuous while the attacks against Lebanon yet rage on an hourly basis. Additionally, Iman Tabbara, a LPSN founding member and the organization’s lead on policy and advocacy for economic security, points out how the pre-war disintegration of formality in the economy and the war’s high impact on the mostly informal activities in agricultural production mean that there are now two distinct local economies that have been decimated by external shocks.

Indeed, the only thing that can be ascertained from more than a decade of divergences between global-lens data and Lebanese economic coping, is that both the formal and informal economies of Lebanon have long appeared to be fraught with data uncertainties.

A glance at a small country’s war exposure through the lens of economic data

On top of that pit of data uncertainty, under which the informal branch of the Lebanese economy is by its definition too opaque in usual times, the precariousness of data is disruptive to even preliminary assessment in the current scenario of extreme stress.

Additionally, from the vantage point of small economies situated in the obscure cracks and crannies of international economic flows, top-down global reports on geoeconomic and national trends cannot but be noted for high margins of error. These international assessment models are geared towards large economies and are to very large extents based on discussions with governmental entities, central bankers, and such.

Lastly and most disturbingly, the GDP impacts of external aggression on Palestine to the point of economic destruction were not included even in the regional and sub-regional economic assessments by any Bretton Woods entity.  This absence was most devastatingly evident in recent GDP projections for the MENA region despite the year-long evisceration of Gaza. 

The absence of economic markers that elucidate the atrocity of war as means of national repositioning and superiority of one people over the other further accentuates the grimness of undeniable warfare devastation of the Lebanese economy. Despite this impossible context, LPSN show determination of moving forward with their role in rebuilding the economic and societal fabric from the first moment after it becomes feasible to do so.

The new role of the private sector

LPSN’s response was a broad pivot from an economic-industrial focus on job creation and preservation to a broader sovereign and societal pledge of support. However, the decisive core is perhaps the sub-pivot to, and assertion of, economic diplomacy under the aim of repositioning Lebanon as a forward and upward moving emerging market, becoming once again a reliable and responsible international partner in Arab and global contexts.

The dual goal of supporting sovereignty and claiming economic diplomacy that powers LPSN on its path may not be entirely impervious to elements of contradiction. Historically, critics have disdained the viability of participatory economic democracy as viable against dangers of conflicted interests.  

Freji’s argument, however, is that LPSN’s demands are thrice valid and justified. “It is very difficult to argue against our position because it is based on our constitution and it is based on what every citizen wants. It thirdly is based on improving the livelihood of the citizen,” she tells Executive. 

Viewed in Lebanese context, it becomes clear that LPSN’s current demands are not just economic stakeholders’ response to war. They are based on the determination to overcome the paralysis of the Lebanese polity and economy that has been caused by the dysfunctionality of the secto-political system. This system of governance has been encroaching since the 1990s and escalated into a financial implosion and economic meltdown in the early 2020s.

Regarding prospective activities over the remainder of 2024, communication strategist Ayache says that LPSN will focus on building momentum around its message of sovereignty, stability, and prosperity and the demands outlined in the petition of November. Plans for a third annual event have been pushed from this month into the first quarter of 2025, he clarifies. 

In LPSN’s organizational DNA, constructive approaches – specifically the inaugural emphasis on corporate ethics and business values as well as the 2023 focus on job creation and employment security – appear implicit to the private sector network’s resilience since its establishment, notwithstanding several LPSN board members’ dislike for the word resilience.

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AgricultureAnalysisAnalysisAnalysis

From Struggle to Strength: Lebanon’s Agro-entrepreneurs in Uncertain Times

by Sherine Najdi
written by Sherine Najdi

The war on Lebanon, while selective and impacting some sectors less than others, has left no sector untouched. Niche businesses in the real economy — those small, specialized enterprises that often represent the heart of the community — are more vulnerable than large enterprises. And previously rising agro-entrepreneurs – ventures which in the 2010s were nurtured as startups and who were the darlings of external funders during the economic crisis of the past five years, are among the hardest hit. Take for example a niche venture that debuted seven years ago.

“The Good Thymes started with a simple focus on zaatar, but it became more than just a product line—it’s a connection to our culture,” says Fady Aziz, founder of The Good Thymes, a Lebanese agricultural company with a focus on producing all things Zaatar. The digitally savvy venture has grown to the level of operating a proprietary retail outlet in the vicinity of a premier shopping mall. In recent weeks, Aziz tells Executive, the company’s birthplace and home base in South Lebanon was forced to close, operations and even stock had to be relocated, and sales in the short term came crashing down by double-digit percentages.

Whereas economic numbers and the fate of agro-entrepreneurs and the entire agro-food sector remain violently in flux and the fortunes or misfortunes of individual enterprises are uncertain and varied, it is plain to see from the market that some niche brands, including local dairy, legume, and juice processors with dedicated followings among consumers, have vanished from store shelves within days of the current conflict. Other Lebanese agro-food brands are hanging on and even maintaining their export capabilities.

The context of agro-food entrepreneurship in Lebanon, and all agricultural producers, is defined by a long-term dependency on food imports, against which background agro-producers in recent years were impacted heavily in the first phase of sharp GDP contraction in 2020 and 21 but seemed to recover relatively well from 2022 and faster than sectors in the services economy. Today all businesses in the agricultural value chain, from artisanal producers to large agro-food processors, face an uphill battle as they navigate supply chain disruptions, financial instability, and infrastructure challenges in an increasingly volatile environment.

Yet, amid these difficulties, Lebanon’s niche businesses are adapting innovatively and uncovering unexpected opportunities to sustain themselves, such as pivoting to digital channels, strengthening ties with the diaspora, and embracing locally sourced materials. “Since 2019, Lebanon has faced one crisis after another. We’ve survived multiple economic shocks, and it’s no longer just about running a business—it’s about finding ways to keep going in the face of everything,” says Samer Tutunji, founder of Eshmoon Holistics, a brand of natural and organic agricultural products.

 Capitalizing on deep roots

Niche businesses in Lebanon often operate within unique cultural and regional contexts, focusing on traditional Lebanese products, artisanal crafts, and specialty foods. A common thread amongst them is a vision of preserving the country’s heritage through their production. “We are deeply tied to the land and the farmers we work with. It’s not just about producing food; it’s about sustaining a tradition that’s been passed down through generations,” says Fady Daw, founder of Adonis Valley, a high-quality certified organic food producer. Like The Good Thymes’ focus on heritage of zaatar, Adonis Valley is rooted in Lebanon’s agricultural traditions, sourcing ingredients directly from local farmers to produce organic, specialty foods. Eshmoon Holistics, named after the mythical hunter who represents healing in Canaanite lore,offers a wide variety of creative plays on chocolates, jams, and spreads. The common element in diverse agro-entrepreneurship businesses is how they seek to capitalize on providing consumers with unique yet homegrown products while also emphasizing their support of rural communities by partnering with local artisans and producers.

In course of the conflict between Hezbollah and Israel which began in October 2023 and saw unilateral escalation by Israel in September 2024, The Good Thymes, Eshmoon, and Adonis Valley have each faced disruptions due to instability in their production areas. In Kfarhouna, a town in the Jezzine district of southern Lebanon where The Good Thymes previously operated, escalating violence forced Aziz to close his facility and relocate stock to safer locations, relying on friends’ facilities to continue production. “We were forced to shut down our main facility in Kfarhouna when the conflict escalated. A missile struck near our farm, and we had no choice but to move everything” says Aziz. Daw of Adonis Valley notes that logistical interruptions have hindered his ability to source raw materials from farmers, affecting production continuity.

Moreover, these businesses started facing financial constraints—for many niche businesses, the cost of maintaining operations has soared. Aziz describes how The Good Thymes kept prices stable despite increased costs in a hope to retain customer loyalty. According to Tutunji, import-related delays have strained finances at Eshmoon, with international suppliers hesitant to work with Lebanese businesses in times of towering uncertainty.

Putting the above experiences of war-induced financial constraint into sectoral perspective is Marc Bou Zeidan, executive director of Qoot Cluster, a Lebanese agri-food innovation cluster.  “The constant threat of disruption has put our agri-food producers in a position where proactive risk management is essential,” he tells Executive. According to a survey of 70 Qoot members conducted at the beginning of November, 98 percent were affected directly or indirectly by the crisis. Indirect impacts reported by 68 percent of respondents included one or several factors, namely disruptions in cash flow, access to markets, and supply chains.

Bou Zeidan emphasizes the breadth of impacts that was shown by the survey of Qoot members as their business operations were interrupted due to safety concerns and due to impacts on production sites, storage facilities, and transportation. “Damage to power and water supply, as well as losses from data infrastructure, have hit 6 percent of businesses, though many more face infrastructure challenges”​, he adds.

Another common challenge for companies is the major impact on the workforce— businesses must contend with risks to employee safety, reduced employee productivity and low morale, and reduced ability to maintain financial obligations towards employees. All of the businesses interviewed had to make difficult staffing decisions, as many employees were displaced from their villages.

Daw shares that Adonis Valley had to make a focused shift to prioritize support for employees. “The instability disrupted our supply chain and left some of our employees displaced. Production has become unpredictable, and we’re constantly adapting to keep things running, even if it means lower margins and added costs.” Others, like Daw, are trying their best to maintain employee morale, working persistently on keeping them motivated, unwilling to let go of their loyal personnel,” In these times, we need to hold onto our team and keep them motivated as best as we can,” says Daw. QOOT mentions that infrastructure damage—ranging from production sites to power and water supply—has made employee safety and business continuity challenging.

I get by with a little help from my friends

Adaptation requires creativity and good connections, and luckily, Lebanese niche businesses face no short supply of either. In response to multi-faceted hurdles that prevent business-as-usual operations, Lebanon’s niche businesses are resorting to new sources and unorthodox ways to maintain their operations.

Among the companies Executive talked with, Aziz transformed The Good Thymes’ production approach by collaborating with friends who own facilities in safer areas, even transporting products informally to continue operations. “To keep going, we relocated our stock to safe storage and found friends willing to lend their facilities for production. We even started smuggling our stock in taxis just to make it work. It’s been all about improvisation and resilience.” Aziz furthermore maintains a focus on innovation, creating unique products like zaatar-infused ice cream and jams to diversify his offerings.

Even though production facilities of Eshmoun Holistics are not located in areas obstructed or targeted by air strikes, the company according to Tutunji must make adjustments to maintain production as usual—especially because of overseas suppliers’ distrust in Lebanese businesses making timely payments, and the obstacles this creates to imports. Eshmoon additionally shifted their focus to research and development (R&D) to create new revenue streams.

 Daw says that the situation has forced them to rethink their suppliers and ingredient sources—thinking about sustainability in the long run. Adopting strategies similar to his agro-entrepreneurial peers, Daw says he has been exploring ways to adapt, rethinking contingency plans to stabilize Adonis Valley’s supply chain and address fluctuating market demand.

Both Aziz and Daw urge the local community to be their support and their lifeboat in this dire economic storm. They ask the people to choose local products to “Keep Lebanon’s flavors alive” to allow them to keep their doors open and “Ensure that Lebanon’s unique spirit endures,” says Daw. While they make necessary pivots in order to survive — mainly online —, the most effective solution is, for them, the people’s support.

Qoot’s Bou Zeidan iterates this call for a “buy local” approach, emphasizing that community involvement is vital for these businesses’ survival. To mitigate the risks, Bou Zeidan emphasizes the importance of diversifying suppliers and investing in local resources where possible. He recommends that agri-food producers build relationships with alternative suppliers and create backup plans for critical aspects of production.

Role of government and international aid

With little to no support from the government or international organizations, niche businesses are forced to rely on their funds, resources, and wits. Aziz says, “Our businesses are a lifeline for local farmers and workers, but we’re left to face these challenges largely on our own,” implying that many businesses operate independent from outside help. Tutunji says that his company is constantly finding ways to keep their operations moving, not willing to wait for aid anymore.

Aziz considers expanding The Good Thymes outside of Lebanon, seeking ways to protect the venture from further loss and business complications by proactively appealing to the Lebanese diaspora market. “We’re considering expanding online to reach the Lebanese diaspora. There’s a strong community abroad that values our products and wants to support us, even if they can’t be here in person,” he says.

However, Bou Zeidan’s insights highlight the importance of government and international support for Lebanon’s agri-food sector at large. He notes that “both private and public sectors must work together to create a robust safety net for our producers,” and shares how Qoot has successfully lobbied for local products to be included in international food aid. This initiative allows Lebanese products to be part of food boxes distributed to displaced communities, giving local producers a stable revenue stream at no cost to the recipients, he explains.

Opportunities amid crisis

Amidst these challenges, some unexpected opportunities have emerged, such as The Good Thymes’ potential expansion to a diaspora market eager to support Lebanese businesses and enjoy products from their besieged homeland. As the crisis has made imports more costly and unpredictable, businesses are exploring new local sourcing options, which could lead to more sustainable and self-reliant operations. With a significant drop in in-person sales, The Good Thymes and Adonis Valley are looking into digital platforms to reach customers, offering a new way to engage with both local and international audiences. Bou Zeidan also suggests that the current crisis can prompt agri-food producers to turn to export markets more aggressively, particularly by targeting the Lebanese diaspora and Middle Eastern markets. With many niche businesses exploring digital transformation, the diaspora presents a promising audience that values Lebanese goods and offers a relatively stable customer base. “Lebanon’s agri-food products have a strong reputation abroad. Leveraging this to build an international presence can offer businesses a lifeline in difficult times,” says Bou Zeidan​.

 Eshmoon’s Tutunji is viewing the current moment with surprising optimism: “Crisis has always been part of our reality here, so we see it as both high risk and high opportunity. Crises force us to innovate. We switched focus to research and development, creating new products and exploring different ways to connect with our customers. This has led to new ideas that we might not have pursued otherwise.” Lebanese businesses’ unfettered resilience and their strong curbing of the urge to give up have become hallmarks of the country’s entrepreneurship.

Bou Zeidan and Qoot Cluster have been advocating for Lebanese products to be included in international aid boxes distributed to displaced communities. “We don’t want to see imported goods in these boxes; we want Lebanese products supporting our communities,” he says. This lobbying has led to a budget specifically for food boxes sourced entirely from Qoot Cluster members, strengthening the foothold of local businesses in community support.

Constant crisis mode?

From both an outsider and insider perspective, the Lebanese economy appears to be subject to repeated and increasingly catastrophic hits in the last five years. For both Lebanese individuals and companies that have not fled the country, the inclination to normalize shocks is a way to survive, albeit a costly one.

In early December 2023, International SOS (a health and security service firm) released a Risk Outlook Report for 2024 which stated that 80 percent of surveyed global risk professionals predicted that employee burnout would have a significant impact on businesses in 2024 due to a “global permacrisis”, but only 41 percent said that companies are equipped to deal with it. Given Lebanon’s tumultuous past five years, one could argue that Lebanese businesses are both some of the most heavily impacted by burnout and also the most well-equipped to deal with it. According to Tutunji, “Lebanon’s businesses are in constant crisis mode, but that’s given us a kind of resilience. We’re not asking to be seen as victims; instead, we want our community and customers to see the value in supporting local businesses that are working to sustain Lebanon’s heritage and economy.”

With or without the perception of victimhood, there is no denying that a continuously escalating war will create more and more victims, and if unstopped, may quite literally burn out even the most determined.

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Q&AQ&AQ&AQ&A

Questing for homegrown civil solidarity

by Thomas Schellen
written by Thomas Schellen

When explosions were triggered in pockets of alleged Hezbollah operatives on September 17 and 18 and when Israeli airplanes started bombing Lebanese targets while their Prime Minister Binyamin Netanyahu was showing to the United Nations General Assembly what he thought of the UN’s vociferous political theater and diplomatic rituals in the name of peace, triggering a wave of fear and displacement north of their border, some civil society organizations around Lebanon leapt into unprecedented and intuitive action.

”On September 23, I think it was a Monday, we decided to use the money from the concert,” Dahlia Dagher, president of Stouh Beirut Association tells Executive about the organization’s pivot to immediately assisting displaced Lebanese with humanitarian materials and away from the final hustle of ticket sales in preparing for a charity event scheduled for September 27 at the prestigious Casino du Liban.

“After the pagers [have been exploding], it was a very dangerous phase and I did not ask if I need to continue or if I need to [reimburse tickets]. We decided ‘khalas’ (stop what we have been doing). I called a group of ladies and told them that we have too much displacement going on. So we need to prepare aid boxes and I need you to help us right now. Everybody came here and we started to work. It was like an avalanche,” Dagher says.

Concert plans – previously cast as single charity event titled Ya Habibi Ya Janoub or for the love of the south – were rescheduled and repurposed, with ad-hoc addition of two diaspora concerts in Paris and Geneva, to garner support for displaced persons under the slogan of love for all of Lebanon. Equally remarkably, Stouh Beirut Association, which boasted on its Facebook page that it was created in 2017 on basis of having helped “more than 50 families” through five successful telethons over the previous years, stepped into accelerated humanitarian action. According to Dagher it was ahead of others in this, such as being “the first association to go to [the southern Lebanese border village of] Rmaich with a large aid truck, which was organized with the Lebanese Armed Forces”.

Capturing this emergence as a quantifiable expression of aid to displaced people, Stouh Beirut Association, between September 24 and October 30, 2024, provided support to 20,687 persons all across Lebanon, says Rosy Haddad, the association’s business development manager. According to published records, aid over this period included nearly 20,000 food parcels, 15,890 hot meals, 1,500 units of baby formula, 5,709 mattresses, 3,846 blankets, 4,370 hygiene kits, and 1,393 packs of essential medicines, among other supplies from apples and drinking water packs to toys and clothing. On the human investment side, the association according to Haddad received 134 volunteering applications over the same period.

Reveals of contradictory human capacities

The current reality of Lebanon reinforces several insights into the human capacities of good and evil. Being faced with invasion, occupation, and overwhelming violence firstly brings out an old truth that in this world region has never receded into the far distance: every humanitarian crisis is an emergency that should have never happened – especially when occurring as man-made atrocities in pointless wars. From a second, correlated perspective, every disaster produced or aggravated by members of the human species is a calamity the magnitude of which could have been mitigated, at least to an extent, through better crisis management preparedness.

A third insight into the evil of human destructiveness is that it does not help to try and measure it, or its impacts. Every humanitarian catastrophe inflicts pain and suffering beyond useful comparison. That is to say that in the case of Lebanon with its cyclical recurrence of externally or internally inflicted adversities and accumulation of hardships in the past decade, inundation with daily casualty numbers and sensational stories of suffering runs great danger of deteriorating into a, from a humanitarian angle, a mind-numbing account of institutional or media voyeurism – a potentially vain endeavor with dwindling effectiveness and by itself nil value for improving anything.

In an economic side-glance, it is even from macro- and micro-economic perspectives pointless to apply a preliminary or a comparative approach to the statistics of destruction and pain. Assessing the human harm of the current war is a grim duty that becomes all the more difficult the longer the war is raging. Comparing crises with very distinct characteristics and military damages inflicted upon Lebanon, namely the ongoing assault from Israel’s instigation of undeclared open war in late September of 2024 to the end of last month, with the 34-day military conflagration of July-August 2006, is not useful even for a comprehensive account of damages and post-conflict reconstruction needs.

The counterpoint of constructive good

One observation that points to the best upside human potential in the middle of the pain, is the rapid, highly enthusiastic escalation of volunteerism and humanitarian aid provision by local organizations of all origins and identities in a crisis that is superseding and eclipsing several socioeconomic meltdowns. The outpouring of Lebanese solidarity despite an epic recession being on its way in the economy is not at all new in terms of its spontaneity – the flooding of devasted streets with aid givers immediately after the Beirut Port explosion of August 4, 2020, is an inerasable memory for many residents of the affected neighborhoods. The scale and social dimensions of the 2024 war impact on civilians of all identities, however, potentially transforms the volunteerism into a cultural taskforce of nation building and inclusiveness.

The positive jolt of seeing volunteerism in action – one that perhaps even constitutes a valid answer to this human predilection with bad and worse news –is deepened from knowing the humanly incomprehensible data points of nearly 16,000 reported Lebanese casualties in just under thirteen months of conflict between Oct 7, 2023 and October 30, 2024.

The impression on the irreplaceable value of spontaneous volunteerism is further magnified by understanding that those injured and dead – in their overwhelming majority civilians, including 1,351 children according to the UN’s Office for the Coordination of Humanitarian Affairs (OCHA) – are the premier victims of an undeniably disproportionate aggression against Lebanese civilians. The bulk of victims that have been dehumanized and collateralized are tens of thousands of families and hundred of thousands of individuals in an imperfect official count of internal refugees (IDPs) that escalated from 211,300 as of September 27, 2024, to more than 842,600 reported IDPs by end of last month.

Not just some globalized civil society agent

In the well-oiled humanitarian economics of first-world markets, the human impulse of providing help and/or leaping into immediate volunteer action, is commonly channeled into financial giving to top-tier charities and international, non-governmental institutions (iNGOs). They have stolid and storied popular reputations that precede them in sudden shocks of earthquakes, floods, and famines; they have proven capacities of moving large aid shipments; they are certified as transparent and professional in their emergency responses; and they are very well known to their state partners and UN agencies.

Comparable state-backed structures in the humanitarian sector of Lebanon, as much as they exist, have either been developed in rudimentary / fragmented ways during Lebanon’s post-conflict reconstruction period after 1992, or they have been degraded because of outmigration of qualified personnel, loss of equipment and rolling stock due to lacking maintenance, and erosion of salaries and operating budgets. Not to forget the impact of the society’s perennial scourges of shameless cronyism and corruption.

It is against this backdrop that the annals of Lebanese volunteerism become astounding stories full of national importance, solidarity and surprise, but also narratives that warrant much further investigation of local non-profit organizations and their perceptions. A point of note, and doubt, in this regard is the common emphasis on inclusiveness among non-profit organizations that have been competing for local or international recognition and all-important foreign funding support since the late 2000s.

Whatever their chosen identity and moniker, no charity, NGO or CSO would ever portray themselves as anything but transparent and free from communal partisanship – but such declarations would be met with distrust in a country notorious for its deep cronyism and fake political promises. This skepticism is endemic in Lebanon. However, the huge gap between claims and perceptions on true civil society motives and drivers is not observed only in Lebanon but rather can serve as a reminder that the narrative of global civil society is anything but comprehensive or quick and easy to categorize through the notorious simplifications of journalism.  

The story of Stouh Beirut’s leap into humanitarian aid activities for internal refugees and displaced families that are victims of Israeli aggression, can be read as one example for the complexity and convention-defying reality of human solidarity in the multi-religious Eastern Mediterranean polity and very small modern country of Lebanon.

Rising above mundane bindings?

Stouh Beirut, or surfaces of Beirut, started out rather mundanely as television program covering cultural, political and artistic news and events from around the Arab world. It launched its first humanitarian project as a telethon in 2013, some time after having debuted as a weekly talk show – and this to its detractors is a key item of note – on Lebanese broadcaster OTV, a station known for its affiliation with the “Aounist” movement, or Free Patriotic Movement (FPM) political party.

The FPM has at its core the political dynasty established in the civil war days of the late 20th century by Michel Aoun, the erstwhile army leader who was handed the custodianship of the country in 1989, was forced out after a year, spent 15 years in French exile, returned as top political contender and was President from 2016 to 22. Aoun and his son-in-law and political heir as head of the FPM party, Gebran Bassil, have over more than a decade been some of the most polarizing figures in the immensely controversial Lebanese political establishment.

While not avoiding the issue of her professional link and use of OTV studios for producing her telethons, (which she attributes to an advantageous agreement on her costs of facilities), Stouh’s Dagher presents the creation narrative of Stouh Beirut as humanitarian organization as something far removed from politics. She does so with the verve of a seasoned media producer and exuding the passion of an activist in carefully chosen attire of a humanitarian worker. She had a personal eureka moment for a Christmas season telethon while watching such an event during a family visit to France. She tells Executive: “I had the idea to have people of every different mindset and political color, whether Muslim or Christian, join on one stage to help five persons, one person from each region in Lebanon like the south, north, [and] the Bekaa. This is how we started.”

A pattern of an annual telethon was established with annually increasing charitable donations by the telethon’s captive audience, in conjunction with a mid-yearly follow-up campaign of presenting testimonials as well as financial reports. There was no large single giver or sponsoring entity, she says, but rather an increasing flow of donations ranging from single dollars to about one thousand dollars. 

Further points on the journey included incorporation as a non-profit association under Lebanese law and – in an effort to mitigate the impact of the 2019 crisis on the financial system – a parallel non-profit in France. Following years of the telethon entailed a focus on persons in urgent need of lifesaving medical procedures, sometimes outside of Lebanon, that in some cases would cost more than a hundred thousand dollars.

The organization’s explosive emergence on the scene of mass assistance to displaced persons in Lebanon marks thus another surprising pivot and reinvention. It has its special cultural accent through the creation and expansion of musical performance aiming to simultaneously express patriotic passions and appeal to generosity of domestic and diaspora donors and their perhaps elusive friends.  

Hope springs eternal even when faced with a phalanx of destructive evils. Lebanon, by the combined force of its recent and new adversities, is internally confronted with new social realities and with irrefutable needs of tackling entrenched social barriers. Diverse, often faith-based and locally rooted charities can be found aplenty in Lebanon. They are essential as institutions serving humanitarian survival needs in the current onslaught and its aftermath. But they also are potent chambers of societal coalescence, given that economic integration and productive inclusivity are the imperatives for building livelihoods and sustenance for the day after all international aid budgets and humanitarian volunteer efforts have run their course. Stouh Beirut appears to be an entrepreneurial outlier among a plethora of locally formed civil society outlets of volunteerism and it will be compelling to see whether the declarations and practice of non-sectarian inclusivity will hold in five or ten years.

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AnalysisDisaster Risk ManagementEconomics & Policy

Coordinating relief: Support Lebanon’s urgent humanitarian needs

by Maureen Philippon
written by Maureen Philippon

Lebanon is in the midst of an unprecedented displacement crisis as Israeli attacks continue unabated. I say unprecedented not only because of the sheer number of people forced from their home – more than 872,000 displaced inside Lebanon as of this writing, including 400,000 children, and a further 400,000 people who have fled to Syria – but also because of the scale of destruction, loss and suffering that have come with this displacement.

The fact that this humanitarian calamity takes place in a relatively small country against the backdrop of a major economic crisis is hardly fathomable. The struggles of Lebanon’s displaced are not limited to physical displacement but extend to loss of livelihood, separation from family, and the scarcity of basic resources. People I have spoken with reported feeling alienated and treated as second-class citizens within their own country, adding to the emotional toll of their experiences.

“It is hard for us to live in these conditions. In my hometown, I used to regularly gather clothes for donations. Now, we are the ones receiving the country’s central region of Mount Lebanon, told me.

Challenges faced by affected communities

Safety concerns and trauma weigh heavily on these communities. For families forced into overcrowded emergency shelters, safety and privacy are often compromised. About 22 percent of displaced people are in the thousand designated emergency shelters, made available by the Government. These are mostly schools, which were never meant to accommodate families round the clock.

Many displaced people are forced to live in cramped, makeshift conditions without basic amenities such as clean water, proper sanitation, or consistent heating. In makeshift shelters – such as abandoned buildings, public parks, or even tents, and also to a lesser extent in the designated shelters maintaining good hygiene is a challenge, which can have serious health consequences.

The Norwegian Refugee Council (NRC) supports more than 80 of these schools which have been designated as emergency shelters, adding bathrooms, portable showers and partitions in classrooms-cum-bedrooms. We are providing soap, shampoo and cleaning products in the distribution to the shelter. Families like Nahida’s, a 38-year-old Lebanese mother of three children, recounted the loss of routine and dignity in temporary accommodations, far from the comfort and security of her home.

One quarter of those displaced have moved into rented homes or are staying in hotels, others rely on the generosity of friends and relatives, often in overcrowded homes. However, some people have taken advantage of the situation – in many cities, rent prices have soared. In Saida, a small flat that would go for 150 USD is now rented for 450 USD. The proportion is about the same in Beirut, where a studio that could be found for 300 USD is now 800 USD.

For those without these options, makeshift shelters like unfinished buildings, tents, and even parks have become temporary homes, especially for non-Lebanese people facing added challenges in accessing official shelters. I met Samer, 15, at one of the schools in Chouf district who says: “Our humble home feels like a castle compared to our situation here. We are about 24 people living in one room, and my aunt with a disability struggles to adapt.”

With winter around the corner here, displaced people have started to wonder how they will keep themselves warm. It is a concern for everyone, but more acutely for people who found refuge in higher altitude, and for people who live in derelict buildings. NRC plans to improve insulation and distribute warm blankets for people in shelters. NRC has also provided cash to vulnerable families so that they can address the priorities they identified to improve their living conditions.

The impact on children is also significant. The sounds of explosions, sonic booms, and warplanes overhead have become an unsettling new normal, leaving many struggling to sleep and make sense of why they had to leave their homes. Their daily routines have been disrupted – they are no longer able to see their friends, play in familiar streets, or attend school – leaving them feeling isolated and disoriented.  “Children are resilient; they play and make new friends, but they still ask me if our home is safe and if we can go back,” a displaced parents told our team.

Ensuring access to education for all children, be they displaced or attending schools that have become shelters, is another high priority. Many organisations, including NRC, are working closely with the Ministry of Education to plan ahead. Especially after the recent traumatic events that displaced children have been through, it is vital for their well-being to make sure they can do what children are meant to do –drawing and singing. They should not, like the children I saw in Saida, be covering their ears with their hands when a plane hovers above their head.

The role of humanitarian organisations in crisis response

The joint flash appeal of the UN and Lebanese government for 426 million USD for three months to scale up the humanitarian response is only 17 percent funded at the time of this writing. Each humanitarian sector has developed plans and priorities in close coordination with the Minister of Environment, which leads the Crisis Response on behalf of the government and the relevant line ministries. Several tools have been developed to map out needs across the country and allow a prioritisation of the most urgent ones.

Access to many areas in Lebanon remains challenging due to security risks, particularly in southern Lebanon and regions like Baalbek, a city in the Beqaa valley east of the Litani river that hosts some of the world’s largest Roman temples and Hermel, a district in northern Lebanon that borders Syria. NRC was forced to postpone sending several trucks to Baalbek and Ersal last week as it was planned after the intense attacks, and that visit was no longer deemed safe. We cannot put our teams at risk. Delays in aid delivery to conflict zones leave vulnerable groups – including children, the elderly, and those with medical needs – at a greater risk amid worsening conditions.

Displaced communities should receive equal care and opportunities regardless of nationality. Yet, for many vulnerable groups – particularly non-Lebanese residents, refugees, and marginalised communities – barriers persist. NRC have spoken with Syrian families turned away from collective shelters designated for displaced individuals, as some local authorities or host communities restricted access based on nationality. This exclusion has forced many Syrians to seek refuge in informal, often unsafe, shelters like unfurnished buildings, parks, or open spaces, exposing them to harsh conditions and greater health risks. Some had to stay put under the bombardment.

Strengthening the institutional capabilities of local authorities and central ministries will enable them to better manage and respond to this crisis, ensuring displaced communities have uninterrupted access to essential services like shelter, education, and livelihood. This should be part of a joint effort, where resources are met with an actual plan and intention to deliver the most efficient response. While everybody has been shocked by the scale of the crisis, it is time to carefully arbitrage resources and best placed systems to respond. Accountability to donors, be they States or generous individuals is paramount, just like we also owe accountability to people who suffer, making sure we prioritise the most vulnerable with the support they find the most suited.

Our goal is to support the displaced in reclaiming their lives and accessing dignified shelter and basic services. Donors, humanitarian organizations, and the Lebanese government must work together to maintain a response grounded in compassion and efficiency.

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Q&A

Q&A with Philippe Lazzarini

by Thomas Schellen
written by Thomas Schellen

In light of Israel’s decision to ban UNRWA when Palestinians are most in need of the organization’s support and are subjected to increasingly catastrophic violations, we invite you to revisit our 2020 Q&A with UNRWA Commissioner-General Philippe Lazzarini

Human catastrophes are inextricably interconnected to each other through the basic sharing of suffering and human compassion. The Palestinian
catastrophe in this sense can neither be ignored nor excised from the intensity of the Lebanese experience. To gain a perspective on the Palestinian dimension of the crisis in Lebanon, and on the magnitude of the suffering of the Palestinian population in the Near East this year, Executive sat down with Philippe Lazzarini, the commissioner-general of the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA).

You have just completed your first official visit to Lebanon since you were appointed to the post of UNRWA commissioner-general. I understand that your schedule in Beirut was overwhelming.

It indeed was overwhelming because I did not come only as the new [commissioner general] but also as a former [national resident], knowing a lot of people in Beirut. With all what has happened, there was obviously a need to meet as many people as possible.

As perhaps the highest-profile practitioner of development aid with experience in Lebanon in the past six years, my first question is in this context of poverty and the need for development. Given your recent visit in this September of 2020, are we in hell, are we heading to hell, or will we be able to redeem something?

I feel that [you in Lebanon] will be the only ones able to answer this larger question. But it is true that I left Lebanon six months ago and I was shocked to see how people have changed, how their optimism has disappeared [and] how people were more in disbelief and in despair. I have not met anyone who expressed a glimpse of optimism for the near future. This is not the Lebanon that I have experienced over the last five years. Indeed, if you look at all the events that have taken place in the last year, from the financial collapse to the economic crisis and the political stalling, and after that the blast, which seems to be the outcome of a criminal negligence and criminal corruption at every level, this has been the [straw breaking] the camel’s back.

Most of the people who I met during my stay, were talking about leaving the country if they can or could, and also talking with some colleagues from embassies, it seems that today you have an important brain drain which has been accelerated. It was already the case when I was in the country because of the difficulties of graduates to find jobs in the country, but it seems that even those who were in the country and had a job, are now looking to leave Beirut, so it was not the same soul or spirit anymore. Something was broken. I was very shocked to find that I did not have any professional or private meeting that ended with the belief that things in the near future will or can improve. Despite this, I have witnessed extraordinary individual initiative of solidarity among the people. This is among the people, but what I could feel is the total absence of any expectation on what the state could deliver to the people. This has certainly contributed to the moroseness of the mood in Beirut.

Indeed, it seems that nobody is expecting anything positive in terms of either the leadership or in terms of revising the system. But still, could one say that the people here have a human capacity that might translate into something positive and surprising?

A general observation: the notion of “social contract” in Lebanon has been extremely loose over several decades, I would say, definitely since the beginning of the civil war. This has gone as far as that everything has been privatized in the country and nothing has been expected from the state in terms of services. Education has been privatized, health has been privatized, water and electricity, everything has at a given point been privatized in the country. Thus, there were very low expectations from the state in the country. If you look also at Lebanese everywhere in the world, they brilliantly succeed elsewhere. But in the context of Lebanon, they are not the same anymore. I would agree with you that the entrepreneurial spirit of the Lebanese is very well alive but the problem is that the context of Lebanon is not conducive for this to fully succeed. This is the reason why successful Lebanese are tempted to make their careers outside of the country.

Some years ago you authored a piece where you said that if this country collapses, the only model of tolerant coexistence in the Middle East would be lost. What do you see today as the outcome if Lebanon, as a state, were no longer viable?

This is a difficult geopolitical question, but as the country is now celebrating its 100th anniversary, and more than ever, 100 years [after its founding], you have a very deep communal divide which is completely paralyzing the country. This is the reason why there is a political stalemate, why it is all so difficult to form a government today. Because of the sectarian way of doing business in the country. What will the country look like if the Lebanese fail today? I think it will go through even more difficulties and more despair.

Time today is of the essence, the country is on its knees, there are almost no economic opportunities anymore, and it requires a government focusing on and prioritizing socioeconomic issues, but for that, you need to reform the system. For the time that I have been in Lebanon, in almost all my meetings, I was asking the decision makers: where is the sense of urgency? While we see month after month and year after year, the debt increasing and the country nearing the financial and economic collapse, why is there not more of a sense of urgency to reform? To reform the public sector and improve the perception of corruption as the country ranks very badly on the Corruption Perception Index, if I remember well in 137th place, at the time.

There were a number of low-hanging fruits, such as electricity reform where everybody knew exactly what needs to be undertaken and which would have saved the state billions of dollar and despite that, nothing has been undertaken. Also one would have believed that after the blast – the worst-ever blast besides an atomic blast in an urban setting – this would finally [result in change] but now we are one-and-a-half months later, and we are back to the same way of doing business which prevailed in the country [previously]. [If] with all these external shocks, reform does not happen, I do not see how the country can bounce [back] for the time being. It might have to dive deeper before it will really bounce [back].

Turning to the situation of the Palestinian population in Lebanon and the Palestinians in general, the economic shortfall in the UNRWA budget was mentioned by you in one interview during your visit. A message that has been iterated several times since earlier in 2020 by the organization’s representatives on various levels. It seems that
institutionally, you are almost in the position of a precariat
in an informal economic setting that lives from one month to the next, but despite that, you are functioning as an institution that gives aid and keeps people in their livelihoods. What is your expectation for UNRWA funding and for the impact of Covid-19 on the Palestinian economy?

Let me make a few comments before I comment on the financial situation of UNRWA. What I met in the camps [during the visit to Beirut in September 2020] was a very high level of despair, a high level of hopelessness. Basically, when we talk about the increase of poverty in Lebanon, this is amplified in the Palestinian camps. So when we hear that by World Bank estimation 50 percent of the Lebanese population is living below the poverty line, this percentage goes up to 90 percent in the Palestinian camp, and as you know, the Palestinians in Lebanon also do not have equal access to the job market, to land and property and hence have socioeconomically been discriminated. Clearly, what happened over the last year in the economic and financial collapse is complicated by the impact of Covid-19 – which by the way goes beyond the health hazard into triggering an additional level of misery. I keep saying that what we should fear the most in our days with the Covid-19 is a pandemic of abject poverty. Abject poverty has now become a reality in the camps to the extent that if you talk to people in the camp, most of the time they will tell you, “I prefer to take the risk of getting Covid-19 over taking the daily risk of not having food for my children.” This has become the reality in the camp.

As UNRWA we are providing quasi-state services to the Palestinians. Our mandate is to provide education to the Palestinian refugees, to provide access to health services, and also provide relief to the poorest among the poor as minimum social safety net. With all that happened in the country, expectations are rising that UNRWA delivers even more, especially more when it comes to social safety net. Those people just do not have income anymore – the majority of people in the camp are daily workers and they do not have the minimum income they used to have. So they turn to UNRWA, like the Lebanese challenge their governments. This is taking place at a time when UNRWA experienced a financial crisis which is not new, it started five years ago and takes place at a time when people expect UNRWA to deliver more. And, the countries supporting UNRWA are also experiencing their own financial crises. Most of the countries supporting us are entering into economic recessions, which makes the environment much more difficult to deal with.

Having said that, as you were referencing the month-to-month financial situation, this is because UNRWA has two problems. The first is a constant cash flow crisis – we are constantly on the edge of a cash crash – because of the lack of liquidities. We are an organization of about 30,000 staff between Lebanon, Syria, Jordan, West-Bank and Gaza; we are an organization that has a budget of more than 1 billion dollars because of all the services that we are providing. But in terms of cash flow, we never have more than a few weeks. This is highly unnerving and this is the reason why you might have heard many times already in the past that we are always on the edge of ceasing payment of salaries or ceasing services. This needs to be addressed and is an issue that I brought to the table with [UN] member states, telling them, “You gave us a multi-year mandate and we are highly predictable in the services we are delivering – we know already today what our budget will be next year and the year after, so you should be also more predictable in your contributions so that we can manage the cash flow better”. That is number one.

On September 14 2020, Mr. Philippe Lazzarini, accompanied by the Director of UNRWA Affairs in Lebanon, Mr. Claudio Cordone, visited the isolation center and the UNRWA clinic in El Buss camp, where he was briefed on the health services that Palestine refugees continued to receive under new measures and procedures because of the COVID-19 pandemic. © 2020 UNRWA Photo by Abeer Nouf

Number two is that we have a discrepancy between yearly contributions for our mandated activities and the resources that are made available. We have also a mismatch between the political mandate and the expectation of what we have to deliver with the resources that are made available. This is an issue that I am also trying to address with the member states, to make sure that they walk the talk if they ask us to deliver education to half a million Palestinian refugee girls and boys, and that we need the necessary resources for this. That is where we are today. I am very worried about the level of despair in the Palestinian camps and this is also why I have asked donors and member states to make sure that we continue to remain a source of predictability and stability in a highly unstable and unpredictable region.

In a discussion held a few years ago at the American University of Beirut (AUB), a comment of yours on longer term humanitarian emergencies was that ,“the more protracted the situation is, and the less jobs are… available from the market, the more human assistance becomes a social safety net of people”. Then, you remarked that to make humanitarian assistance sustainable in the longterm from short-term money, was a challenge that you did not see the answer to yet. Now, you are dealing with the same sort of challenge on a much bigger level than at the time. Were you able to make progress towards finding a formula of solving this quagmire?

My comment at the time was on the Syrian refugees in the country, where we are basically now dealing with a more protracted situation, and the assistance to the population was being provided through a limited resource, and the more protracted [the situation was], the less was made available as there were competing emergencies elsewhere in the world. The question was, if these people are not economically integrated and go back to their country of origin, who will be in charge in the longer term to provide the assistance, which is comparable to a social safety net for a vulnerable population? I don’t think we have found the answer yet today. It is always a struggle within this humanitarian-government nexus.

But if I look today at how to ensure sustainable livelihood for the refugees, that can be done by helping them access the job market. If they cannot [access a labor market], then one of the important tools at their disposal today is micro-credit. Within UNRWA we do have a micro-credit fund which I have asked to be reinforced in order to better deal with the economic impact of Covid-19… Having said that, there is still no mechanism substituting for the short-term humanitarian funding to ensure welfare and assistance in the long-term for this kind of population, especially refugee population.

Would this micro-credit fund be instituted here and be accessible from Lebanon, given the central bank’s prerogatives in managing and licensing micro-credit and micro-finance institutions (MFIs)?

We are looking at bringing back micro-credit in Lebanon, so we have indeed discussions with the central bank regulatory authority. We have already micro-credit activity in Palestine, the West-Bank, East Jerusalem, Jordan, and we had it also in Syria. It is true that Lebanon was lagging behind but we are looking today at how we can resume or initiate micro-credit also in Lebanon to make sure that Palestinian refugees also have access to this additional tool.

As some see it, poverty can be defined as a choice that society makes; but it seems not to be the right choice. In the Palestinian scenario, could the wrong choices that have entrenched poverty among Palestinian groups be turned into productive power via humanitarianism? Research into international responses to war, disaster and other humanitarian emergencies, has shown tremendous growth of the humanitarian market, highlighted a few years ago as
“humanitarian economics” by Swiss economist Gilles Carbonnier.
Do you think that this rise of humanitarian economics could offer a way forward for better management of the Palestinian issue and poverty in this group?

I was a student together with Gilles Carbonnier in university and I heard him talk about [his] book [at AUB’s Issam Fares Institute], but I have not read the book, so I know of the book but not in all detail. Is poverty the outcome of the choice of society? You do not decide to have poverty, but
depending on the nature of the society that you decide to have, the social contract you decide to have, you will have a level of poverty, this is the way he wanted to frame it. Today, the new framework that is being put in
place to address poverty is the agenda 2030 and the [social development goals], which is today the most ambitious anti-poverty agenda ever adopted by member states. The question is what kind of additional avenue these SDGs are providing and the real questions is not what are the additional avenues, but what will in the future be the funding model to ensure that we are reaching these goals – because we are talking about trillions of dollars to be invested on quasi a yearly basis. This can only be addressed if you have a combination of macroeconomic policies and financial instruments that are accessible to the most vulnerable. This must be complemented also by access to socioeconomic rights starting with education. I don’t know what Gilles had in mind at the time, [seeing that] the protracted poverty situation cannot be addressed just through the humanitarian lens, so shall we talk about humanitarian economy? There is a humanitarian industry, but is there an economy? I don’t know. This is something which could be debated. These are my thoughts in rough terms but I have not read the book precisely.

If I may cite one chapter title in Carbonnier’s book, this chapter deals with “the transformative power of humanitarian crises”. Its underlying question seems especially timely for Lebanon, given that we recently had a humanitarian crisis that can be defined as nothing other than an entirely man-made disaster, and the result of an unnatural hazard that was amplified by human stupidity and irresponsibility. In which way could, as Carbonnier is saying, humanitarian crises be “junctures that radically alter long-term economic trajectories”? Could, in other words, 2020 in context of the overall crisis in Lebanon or the global crisis impact on UNRWA, still be a pivotal point for creating a better economy?

For the time being, I do not yet see anything positive arising on the horizon. Right now we are dealing with a very difficult situation with despair and hopelessness, where the country does not seem to be in a position to offer any alternative right now because the trend is more for people towards looking to leave rather than at creating opportunities in the country. There is still no signal about a proper consensual political desire to reform the country. We are stuck for the time being. I think that the model for us, and I come back to that, is one to bridge our cash flow crisis between now and the end of the year and offer after that, a social contract to the member states and donors to have an agreed, forward-looking UNRWA, where we know in advance what services will be delivered to the Palestinian refugees
so that the Palestinian refugees can expect these services to be delivered without having to dive into the anxiety over a “yes” or “no” if these services will still be made available tomorrow or not. I think what we are trying to do here is to match the very strong political support provided to UNRWA with resources.

This region does not have efficient social safety nets. Are you the most capacious institution for health and education to be found in the Mashreq and Maghreb regions, in comparison to country-level institution of the same type? And by virtue of having functioned for 70 years in the region against all obstacles, are you a role model that other national institutions in the region could emulate?

I talk about Lebanon now because there have been many discussions about the NPTP (National Poverty Targeting Program) of the Ministry of Social Affairs in this country, and what the criterion should be to be eligible for this additional layer of a social safety net policy. Very difficult discussions have been going on, on who should be eligible, not eligible, and how should such a fund be funded. I think, indeed, that when it comes to assessing the level of vulnerabilities for people to decide on different levels to be accessible, UNRWA certainly has a lot to offer. I agree also that when it comes to social safety nets in general, this is a concept that has not been strongly developed in the region. Most of the time government responses or policies are [to provide social support] through subsidies for critical products in the daily basket.

While it most certainly can be doubted that online knowledge resources such as Wikipedia are free from agendas, distortions, and biases, I was still surprised to recently see that the online encyclopedia’s entry on UNRWA was over 20 times more verbose in the category of “criticism and controversies” than in the category of “assessment and praise”. How do you comment on this extreme discrepancy in the online perception of the work that the agency has been engaged in for seven decades?

I give you another example. If lawmakers anywhere ask a question to their government about contributions to UN agencies, there is a high likelihood that the question is on UNRWA and not any other UN agency. So the majority of questions on UN agencies will be on UNRWA and all the other agencies together will have fewer questions [asked about them] than UNRWA.

This shows that UNRWA is an organization which I would say is under political scrutiny. We are easily judged through the lens of relevancy, but not relevancy of the services that we are providing to the people, more about the fact that we are providing services to Palestinian refugees in the region. We are certainly the humanitarian agency which is most perceived through a political lens.

You thus have a lot of criticism of this nature, and after that, we should not completely underestimate the level of frustration that our beneficiaries might also have. We are providing the basics, but you know, when you live in Lebanon [as a Palestinian], and do not have access to the job market, you are discriminated [against] – where do you want to express your level of frustration?

You express it toward the organization which as a mandate to promote your rights and the rights of the Palestinian refugees. This dissatisfaction and frustration easily turns also against the organization because of the high expectation that we do deliver more. So I would say you have two types of criticisms, those coming from the detractors and also those coming from those who benefit from our assistance and would expect much more.

UNRWA’s mandate at the end of last year has been confirmed with a strong majority in the UN General Assembly until 2023. However, given that much criticism comes with an ideological angle, and that realities in the Middle East have recently been subjected to impulses of change, such as initiatives for rapprochement between Israel and some Arab countries, and new political alignments in the region and beyond, do you believe that UNRWA will still see a 75th or 80th anniversary of the organization?

Two or three comments. First, it is not a goal in itself of UNRWA to celebrate the 80th or 100th anniversary. The ultimate goal is to have a fair and lasting peace whereby Palestinian refugees can have a state that they can live in and do not rely on UNRWA anymore. That is the ultimate goal. Meanwhile, I do believe that with all the ongoing developments in the region, we more than ever need an organization like UNRWA, which continues to focus on investing into the human development of the Palestinian refugees and on promoting their socioeconomic rights in the region. I do believe that this is one of the best investments we can have when it comes to investing into future stability in the region. Will UNRWA go to the 80th anniversary?

I don’t know how things will develop in the region, but I do believe that UNRWA’s role will be critical until such a day that there is a fair and durable peace agreement, which would also benefit the Palestinian refugees.



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Economics & PolicyIndustryIndustry

Crisis or Opportunity?

by Sherine Najdi & Thomas Schellen
written by Sherine Najdi & Thomas Schellen

Villages in turmoil, devastating damages to urban neighborhoods, and people forced into mass displacement: images you see as you peek over the obliterated half of Lebanon. Yet one month into the intense escalation–and subsequent invasion– following 11 months of cross-border assaults and aerial attacks against populated target areas across Lebanon, representatives of Lebanese industry tell Executive that they are staying the course of production and remain dedicated to location Lebanon.

“You wouldn’t find any company in Lebanon, if not for the illogical decision to stay here,” says Salim Zeenni, the president of the Association of Lebanese Industrialists. According to him, it is not only the latest Israeli aggression but rather the long chain of systemic obstacles and economic crises that forced industrialists to weigh their options of moving factories to other jurisdictions.

Middle East Airlines Air Liban (MEA) Airbus A321 line up at Rafic Hariri Beirut International Airport on April 11, 2012. AFP PHOTO / PATRICK BAZ

Yet against conventional business rationales, the companies that are here have taken their decision for Lebanon. “We took the challenge to stay and continue producing in Lebanon. And again, as long as the port and roads are still open, we are still moving [ahead],” he insists. He further points out that, unlike the destruction seen in 2006, there has been only minor collateral damages to industrial properties during the current conflict.

It cannot be denied, however, that the country’s manufacturing industries struggle severely under the uncertainty of war. Although some industries are working at capacity and one high-tech manufacturer even observes a week-over-week increase in productivity in mid-October, heads of industry on the level of both associations and companies are faced with potentially crippling supply chain disruptions of both imports and exports because of risks of destruction of critical infrastructures such as the Rafic Hariri International Airport (RHIA), Beirut Port, and connecting roads.

Resilience amid conflict

The industry’s export-oriented companies seem to be coping well regardless of the dire situation — a notion highlighted by Fadi Daou, founder and CEO of high-tech infrastructure component manufacturer Multilane Inc.

“We are still operating in the same way as before,” Daou says, asserting the company’s determination to function as it always does despite the war.  “We do see a minor slowdown in logistics,” he adds, commenting that logistics departments are having to function with reduced staff.

Zeenni likewise maintains that the industrial sector has not yet struggled with large-scale interruptions in operations. He says that despite the war, the sector is “still holding, still going on,” while many other industries are also adapting to new trends or realities.

Whereas Multilane’s business model of high-tech exports in the global B2B space makes access to aerial transport of goods a key potential disruption point, which according to Daou was partially addressed by increasing imports of raw materials and buildup of stock in the past six months before the escalation, Zeenni emphasizes that companies in sectors such as food production and personal care products are working at full capacity in order to meet local market needs as well as obtaining crucial revenues from exports. “For us, the most important market is not the Lebanese market. The most important is exports. Believe it or not, we barely do any profit out of the Lebanese market,” he notes.  

Supply chains at risk and extremely feeble state support

The main risk imposed on the industrial sector is the disruption of the supply chains, the foundation of the sector. Both Daou and Zeenni express the importance of the supply channels, the airport, and ports to the survival of the industrial sector—their closure would cause an acute disruption to the country’s imports and exports, “The biggest worry is a stoppage of the supply line and [potential] closure of the airport. If these routes remain open, we will still be able to provide jobs,” Daou says.

Zeenni acknowledges that industries relying on products or raw materials from afflicted areas such as the South and Bekaa—mainly the agricultural and agro-industrial sectors that have been dealing with losses and destruction, are unlikely to recover anytime soon. Zeenni mentions that these companies are trying to adapt by sourcing raw materials from other regions, or in some cases relocating production to safer areas. According to him, critical inputs of concern to industries include, on top of raw materials, access to energy and the flow of packaging materials.

Both industrialists also flag the need for redressing legal weaknesses and implementation problems in the collection and reimbursement of importation duties for materials that enter exported products. “What is needed from a long-term point of view to seize the opportunity and have impact on economy of Lebanon, is adoption of laws that make it viable for [high-tech] companies to come and manufacture such products in Lebanon,” says Daou.

Admonishing delays in handling of repayment of import duties and the trend of tax increases that push increasing numbers of economically active people into informal – or, in his description, “illegal” – behavior, Zeenni says: “Concerning taxes, the industrial sector has been the milking cow of the whole governmental institutions. We are working legally, so we do pay [our taxes]. This is against any understanding of any economic situation.” He notes, however, that current efforts are being made in collaboration with ministries for enacting programs aimed at modernization and renewal of industrial machine parks and for attracting investments into new industries.

Employee safety and productivity

In addition to the concerns regarding the supply chain, the safety of the workforce is a big priority in a time of war. At Multilane, Daou says he took several measures to mitigate the risk to his employees, especially those living in targeted or risky areas, and those needing to take dangerous roads to reach the workplace. “Employee safety is a very big concern. We’ve provided housing to certain employees so they can stay close by and avoid dangerous commutes,” he explains, adding that the company also incorporated a work-from-home policy.

Nonetheless, these efforts are still not enough to maintain employee productivity at the same rate—especially for people who are product developers and need lab access to do their jobs efficiently. “Productivity drops by 50 per cent when they work from home,” Daou says, “while the production team continues working to full capacity”. This flagrant contrast underlines the varying effects of war across different segments of the workforce.

Moreover, one of the reasons behind this drop in productivity is the mental strain that the employees are facing. “The morale of the team is the biggest challenge. People are on edge; every time there’s a loud sound, they jump to the windows,” Daou says. He resorts to encouraging his employees by sharing stories of resilience, hoping to inspire and bring back motivation.

Global implications and market pressures

When asked if the ongoing war will affect international demand for their products due to fears that Lebanese companies might become unable to honor contracts and meet delivery targets, Daou concedes the existence of such concerns in his global market. “We are spending a lot of time dealing with this specific issue,” he says. To hedge this risk, he is building contingency plans. “We have updated our business continuation plan (BCP) and are exploring partnerships in other countries like China, Turkey, and the Gulf.”

As for their long-term plans for growth, most were stunted. Daou notes that their business could have expanded by 20% in 2024 had the regional situation been stable. This depicts a macro-image of the Lebanese industrial market’s suffering, where they lose growth potential because of socio-political instability in the region in which they function.

Zeenni’s response toward this issue is the same, while also noting the rise of transportation costs that can impair viability of long-term contracts. Moreover, Zeenni points out the struggle to change prices and relays their efforts to “hold prices constrained” to maintain their presence in the market.

Hope for the future: post-war opportunities and long-term vision

Both Daou and Zeenni see hope for Lebanon’s future, especially its economy. Daou sees Lebanon becoming a hub for high-tech manufacturing, inspired by the current AI and semiconductors surge—all intended to happen after the war ends. “Lebanon stands a very good chance for some of the global high-tech manufacturers to build in the Middle East once the bombs stop,” he said. He sees a lower unemployment rate and better utilization of Lebanon’s competent and qualified workforce.

Part of Daou’s long-term vision is investing in Lebanon’s youth and human capital: “Our mission is to provide jobs to our young people so they stay in Lebanon,” he says, adding his intention, after returning to Lebanon in 2006, to be a part of the tech sector’s growth and the creation of high-value job opportunities for the Lebanese youth. Using Multilane’s academy, Doau’s company ensures the advancement of young talent, keeping them updated on tech trends and integration into the sectors while merging theory and practical technical work.

Daou is committed to keeping his company on the rise, along with personal morale, regardless of all new strikes in the industry. “At least in this week [the third week of attacks], the productivity index has improved significantly compared to last week,” he said proudly.

Zeenni says that he believes in Lebanon’s potential since it has risen again and again after each war and crisis throughout the years. In addition, he believes that Lebanon will always remain attractive to investors. “Just give us peace of mind, and you will be amazed what will happen,” Zeenni remarks. Easier said than done, but a sentiment that certainly reflects the forced adaptability and hardiness of Lebanon’s industries despite major repeated adversities.

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Real estateReal Estate

Inescapable: A more just realty

by Thomas Schellen
written by Thomas Schellen

An exploration of mortgage finance opportunities at a time of daily bombings and property destruction seems to be an anything but natural thing to do. Investing into a new home at a moment while the enemy bombs, blows up, and bulldozes dwellings in nearby neighborhoods with impunity but no true predictability, is at its most optimistic an act of calculating risk and opportunity in an extremely contrarian and reckless environment. At worst it is perilous and could destroy one’s own life.
In this and every other sense, the market for real estate development and property transactions in Lebanon must be assumed to be in a state of acute shock and extreme uncertainty. But markets are survivors. Their ability to adapt is the very principle of their existence.
 Moreover, it cannot be overlooked that even under the assault of war’s most malevolent forces and insidious lies, the needs of the Lebanese people do not change. The right to dignified shelter is the response to a fundamental human need. This need does persist and will resurge after the madness and evil of invasion under a fake pretext of defense has run its course – or if in an unlikely but far better alternative, the armed confrontations were stopped by global comprehension and multilateral repulsion and subjugation of this evil.  

In the meanwhile, three issues are on the real estate agenda: the supply of living quarters in socially and economically productive ways, the avoidance of haphazard construction activity that serves short-term needs but damages the urban and rural quality and violates long-term “green” development objectives, and the restitution of damages to the lives and properties of all people who are victimized by the war.   

Needs of planning the future amidst the morally valid dream of restitution

Of course, as long as the aerial and ground invasions last and wreak havoc on mental health and civilian livelihoods in Lebanon, it is not possible to map the property damages conclusively. Nor is it realistic to either plan for reconstruction and betterment of living quarters or assess claims for eventual reparations against the aggressors.
But both issues need attention already today. First is the practical aspect of people who are in need of shelter over the long term, and specifically a national need for shelter that is environmentally, socially, and economically sustainable. In this regard, it is a lesson of the internal conflicts of the past century that in times of armed confrontations and protracted violence, building activity in the country did not cease but was undertaken in ways that inflicted damages on urban fabrics and integrity of communities.
And then there is the moral elephant hidden in the mist of international discourses over human rights and victims of gross violations of those rights in countries like Lebanon. An even greater need than dignified shelter for the currently displaced Lebanese people is the need of safeguarding the rights of people living in the land without the specter of recurrent conflict. Part of satisfying this need could be for Lebanon to insist in front of the global community on reparations for unjust aggression by a belligerent neighbor. 
According to concepts declared by the United Nations in 2005, not just the losers in a war (as seen in previous conflicts such as the two world wars and severe reparations imposed on aggressor Germany in post-war negotiations) but generally victims of “gross violations of international human rights law and serious violations of international humanitarian law” have rights to “restitution, compensation, rehabilitation, satisfaction and guarantees of non-repetition”, through mechanisms of reparation “in a systematic and thorough way at the national and international levels.”

Imperative to define and settle reparations

In any civilized court and international order of justice among peoples, these reparations have to be towering on the balance of real inflicted damages by one party to the other. Note: Israel some years ago claimed to be owed $250 billion in reparation for the victimization of Jews in different countries around the region.
Lebanon’s 20th century past is not void of historic failings such as discrimination against the country’s Jewish citizens and pogroms in the 1950s, 60s, and 70s, acts that marred both the human rights record and the country’s philosophy as home to minorities without discrimination. Big however: Even if Lebanon assumes the responsibility for all property damages south of the border that have been inflicted from its territory, plus shoulders the investigation and eventual reparation burden from the anti-Jewish actions of the 20th century’s second half, the infliction of harm on Lebanese people in the various Israeli invasions and occupation periods of the 20th and 21st century up to the current war crimes enacted with determination and fake justifications against civilians, will push the burden of reparations 100 or even a thousand to one on the scale of justice in favor of Lebanese victims.
This summer, an opinion by the International Court of Justice found that Palestinian people deserve reparations for 57 years of Israeli occupation. However strong the pro-Israel political gale force is in so-called high-developed countries with moral compasses anchored in EU and UN declarations of the past 75 years, and however weak the actual moral authority of the UN has been revealed to be in the past year, it is necessary to start thinking about a universal damage registry for the purpose of reparation demands and accountability.    
Standing as a civilian in the bombed-out remnants of one’s home must count as one of the most tangible symbols of unjust victimization through the type of precision destruction that is by all evidence of September-October 2024 falsely described as minimizing civilian damages and despair.
While restitution and reconciliation over the incalculable cruelty meted out against Lebanese people by regional aerial superpower Israel must be assessed as a problem of future generations, real estate in this sense is literally more real and concrete as an argument for reparations, however politically uncertain and viciously opposed they are by culprits. But even if this cause of claiming reparations were to be taken up by global civil advocates and legal luminaries in the very hour of this writing, any recovery of physical compensation will be years and years away.    

Getting real quickly

In the short and real realm of housing needs, however, the attention is on the financing of affordable homes. This is the segment of the real estate market that had been kept somewhat buoyant – but artificially and perilously so – in the 2010s by the Banque du Liban (BDL)-issued “incentive packages” for the Lebanese economy.

The economic perilousness of the unsustainable interventions into the housing market brought supply of subsidized lending crashing down five years ago at the threshold of the current decade, after it had been driven up over roughly one-and-a-half decades by a combination of speculative demand and genuine need for starter homes.

Expressed in numbers of housing finance, mortgages reached $13 billion, serving 12,000 beneficiaries just prior to 2019. A significant portion of housing finance contracts included subsidized loans, including $1 billion for members of the Lebanese armed forces (LAF), $265 million for members of the Internal Security Forces, $95 million for members of the General Security, and $25 million for the judiciary.

Although housing needs of and finance arrangements available to young couples and growing families were faced with the shocking freeze of banking and crash of currency values in 2020 and the two years thereafter, the real estate story of the past four years has not been a simple one. 

According to Nassib Ghobril, the head of economic research at Byblos Bank Group, real estate was the first sector that benefited from the crisis because when the depositors discovered that they can’t transfer their deposits abroad, they transferred them out of the banks to the real estate sector in form of checks. “Companies and individuals were able to repay their dollar loans at a much lower value than they originally borrowed. This was a loss for both depositors and banks, as it contributed to the financial crisis.”

 But this opportunity did mean neither that genuine demand in the organically growing and socially value-adding market segment for working people’s home was met, nor that the man-made, minor catastrophe called urban planning was addressed.   

Whereas the void in urban planning has to be addressed in a broad societal development with insistence on sustainable real estate and communal coexistence paradigms (cf. comment piece), the collapse of the in the 2010’s thriving mortgage sector mandates a return of banking.

Ghobril emphasizes that the banking sector desperately needs to resume lending activities, “as loans have traditionally been a primary source of income for banks.” This revenue stream has been effectively cut off since 2019, severely impacting the sector’s financial health.

“The size of the loan portfolio was 58 billion dollars at the end of 2018 and today it is about 7 billion dollars or a little less,” Ghobril says. The decline is even more in foreign currency loans, with Ghobril noting that “loan portfolio in foreign currencies declined by $34.5 billion from the beginning of 2019 till the end of June this year.”

“Today, we hear companies saying they need banks to resume lending,” Ghobril says. However, he outlines three conditions for banks to restart this practice. First, banks must have sufficient liquidity to lend, which primarily comes from deposits and shareholder contributions. “Companies shouldn’t complain about banks not lending them money while also keeping their profits in safe boxes or foreign bank accounts. They should contribute to the economy by depositing their funds in Lebanese banks.”

Secondly, Ghobril argues, a law is necessary to guarantee that loans are repaid in the same currency they were originally given. “For example, if a bank lends fresh dollars, it should receive fresh dollars in return, not Lebanese pounds at the exchange rate or devalued checks.” Third, the importance of addressing a crucial question for Lebanon’s economic future: “What identity do we want for the Lebanese economy?”

In his view, one option is a liberal, free-market economy that is open to the world, particularly the Arab world. This model would prioritize the private sector and individual entrepreneurs, while the public sector would play a supportive role by creating a favorable investment climate and modernizing laws and institutions. The other option is an economy dominated by the public sector, characterized by efficient public services, tax evasion, open borders, and a large informal economy.

The return of housing loans

After a five-year hiatus, housing loans are making a comeback in Lebanon, offering a ray of hope to Lebanese youth who had almost abandoned their dreams of homeownership amidst the country’s economic crisis. On June 3, the Banque de l’Habitat began accepting applications for subsidized housing loans.

The new application process has moved online, replacing the old system of physical submissions at bank branches. Antoine Habib, CEO of the Banque de l’Habitat tells Executive in mid-September. “The enthusiasm is clearly there. Applications have exceeded our expectations. So far (September 19), 24,300 people have visited the platform,” he says while not specifying how many of these visitors submitted applications.

Habib states that this online platform aims to ensure a fair and transparent loan distribution process. “To prevent favoritism, this website is the answer. Anyone who meets the requirements will receive a loan. If someone wants to support specific individuals, they should do so with their own money, as the bank is not responsible for personal endorsements,” he elaborates.

Under the new scheme, households earning between $1,200 and $1,500 per month can apply for loans up to $40,000, while those with “average incomes” ($1,500 to $2,000) are eligible for up to $50,000. These loans come with a 20-year repayment term and a 6 percent interest rate.

The eligibility criteria are specific: the property must not exceed 150 square meters, applicants must not own another residence in Lebanon, and they should not have previously received a subsidized loan. The bank is also relaunching loans for improvements and restoration of old homes, with caps of $40,000 to $50,000.

Funding for these loans comes from a credit line of 50 million Kuwaiti dinars (approximately $163 million) obtained from the Arab Fund for Economic and Social Development. This agreement, signed in March 2019, but it faced delays due to the economic crisis and its aftermath.

Addressing concerns about the adequacy of the loan amounts, Habib acknowledges the limitations but emphasizes their potential impact: “If a Lebanese wants to buy a house in downtown Beirut, or in Tripoli Square, or in Bardouni in Zahle, the loan amount is certainly not enough, but if he wants to buy a house in the suburbs of Akkar, Sidon, or Zahle, the amount will be enough.”

You can’t buy a peace of land

Lebanon’s real estate sector defies predictions, with trends of growth and decline that do not always mimic the country’s broader economic and security shocks. While the market is heavily influenced by local and regional uncertainties, it also follows its own internal logic, driven by unique investor behaviors, foreign interest, and a historically durable expatriate demand.

While there are signs of resilience, such as the return of housing loans and the reopening of commercial centers, the sector faces significant obstacles. A comprehensive urban planning strategy is essential to guide development.

Real estate lending needs to resume more broadly, whether in form of purely commercial housing loans or through mortgage lending with support of subsidies and strict eligibility controls. Long-standing reform needs are still piling up, but now with the addition of war and disintegrating physical security as the most pressing challenge that impedes real estate and the right to shelter along with every aspect of civilian life – a challenge that stimulates Lebanese resilience and determination but can only be mitigated on the global stage.

Reporting by Rouba Bou Khzam was integral to this story.

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Real Estate

Inside Perspectives: Experts unpack Lebanon’s dynamic real estate market

by Rouba Bou Khzam
written by Rouba Bou Khzam

Israel’s long-prepared revenge strike against their arch-enemy Hezbollah under a pretext of securing the return of their internally displaced population to the northern holy land, long ago a peaceful area of coexistence of different Semite peoples, has violently intruded on Lebanon – and displaced multitudes – at a time when the country was emerging into new, people-led efforts of recouping the quality and dignity of life that had been eroded by the multi-tiered crises of 2019 to 2023. One aspect of this fervently thought recovery was the resurrection of the urban spaces and affordable housing. Here is what Executive learned about the prospects and developments in those livelihood markets just before the country was assaulted with the anti-peace, genocidal stamp of approval by Israel’s international supply chain of advanced weapons of “precision” destruction and indiscriminate death. 

Lebanon’s real estate and development sector has faced dramatic fluctuations, mirroring the country’s political, economic, and regional experience. From the boom periods that saw Beirut’s skyline transformed by luxury towers (a first post-conflict one in the 1990s, a distinctly different one from the mid-2000s up until 2011), to the deep troughs caused by global economic shifts and regional disunity in the 2010s, the ebb and flow of the market became exceedingly volatile in the late 2010s. Pockets of opportunity arose amidst stagnation. Starting with 2019, the property scene became even more complex, due to currency collapse and mass waves of both in and out migration.

And at time of this writing, the country is cursed with an intrusion of violence and war after a year of expanding conflict. While it is neither viable nor in the least predictable how the war economy will change the property market and real estate development sector in Lebanon, a wistful assessment of the nuanced forces that were shaping Lebanon’s real estate landscape in absence of enemy intrusions can still be obtained by looking at investor sentiment, currency shifts, and government policy in the first eight months of 2024.

Beirut’s downtown, once a center of commercial activity, entered the year with an overburden of obstacles to its economic vitality. “Downtown and all of Lebanon are oppressed. Those responsible have been busy for many years with political disputes and have not developed a new vision for the real estate market or urban planning,” says Walid Moussa, head of the syndicate of real estate brokers and consultants.

In the opinion of George Nour, founder and managing director of property consultancy Estate Solutions, the country’s political climate has indeed hindered development of high-profile areas in the urban core of Beirut, impacting both the capital and the nation.  “We were facing a stagnation situation in the real estate market even before the crisis in 2019,” Nour tells Executive. He points to two primary factors contributing to this long-standing stagnation: the chaotic urban development in Lebanon and the precarious financial situation.

Despite these challenges, the real estate professionals point to signs of potential change in both the commercial and residential markets with the emergence of new businesses and the recent reopening of housing loan applications, which signal a returning access to the financing of property purchases and development. This change may encourage both homeownership and new construction projects, potentially contributing to urban renewal in certain areas.

Going by the evidence of numbers

The real estate market in Lebanon has experienced a significant decline, with transaction numbers plummeting by 84.96 percent in 2023 compared to the previous year. Only 11,639 real estate purchase and sale transactions were recorded last year, versus 77,380 in 2022. However, these figures are not quite as devastating as they appear to be, mainly because public sector strikes led to the closure of the General Directorate of Land Registry and Cadastre, which caused a delay in registration of real estate transactions. Some of this backlog seemed to get addressed in the current year. However, the 16,390 real estate transactions registered in the first six months of 2024 according to the Ministry of Finance, was a number still significantly lower than the 39,921 transactions from the same period in 2022. Rather than bureaucratic bottlenecks, the waning of buyer interest in recent months was driven externally. “The summer of 2024 was particularly challenging, marked by fear and uncertainty. This atmosphere of instability significantly dampened investor enthusiasm for purchasing property,” Moussa emphasizes.

This downturn in the real estate sector is symptomatic of the broader challenges facing Lebanon’s economy. The country’s ongoing political crisis—the ongoing and escalating Israeli-Hezbollah conflict, delayed government formation, presidential vacuum, interim rulings, and public utility strikes—has greatly affected confidence in the real estate market. In particular, the ongoing war in southern Lebanon, now expanding into Beirut and beyond, creates an increasingly hostile security environment that discourages investments, especially in high-profile real estate projects.

Furthermore, although the real estate market has had periods of growth since the 2019 financial crisis, the protracted economic struggle still negatively impacts purchasing power, while housing loans are still edging back into the market. “Development for sale does not exist today because developers do not have the capital to build; [also] the buyer does not have enough money to buy, which indicates that financing is suspended from all sides,” says Moussa. In addition, “closing the doors of their loans and financing prevents [people] from obtaining prior approvals to develop their investments or buy an apartment.”

The inconsistent availability of real estate registration services, with the closure of real estate departments in Mount Lebanon and the intermittent opening of others, creates a bottleneck for potential buyers and sellers in the property market. This uncertainty prompts concerns about the security of property transactions and the ability to transfer ownership. “How can people confidently purchase a property if they cannot even register it or transfer ownership?” Moussa points out.

Urban development’s broken backbone

Lebanon’s urban development has long been characterized by a lack of comprehensive national planning. According to a 2018 UN-Habitat report, only 14 percent of Lebanese territory was covered by urban plans, leading to uncontrolled construction in some areas and underdevelopment in others. According to property consultant Nour, “all developers without any market survey, market research, nor market analysis, were jumping into doing new projects just because they saw that real estate in that time is the favorable business.”

According to him, the precarious state of Lebanon’s financial institutions is the second major hurdle for the real estate market. “The financial institutions were always ready to finance as much as the developer wanted in terms of providing cash, and also the buyer at that time had the chance to borrow from the bank,” Nour explains. This easy access to credit fueled a boom in real estate development, with Lebanon’s construction sector contributing significantly to the country’s GDP – reaching 13.1 percent in 2018, according to the World Bank. However, this growth came at a cost.

“The market was interactive, yet insufficient because at that time the banks were not really looking at how the developers were spending the money. There was no compliance, no anti-money laundering control, and nobody was asking about ‘know your client’,” claims Nour. A lack of due diligence and oversight created a perilous environment where financial risks could accumulate unchecked.

The absence of robust regulatory controls is particularly concerning given the scale of lending to the real estate sector. As of 2019, before the onset of the current crisis, real estate loans accounted for approximately 36 percent of total loans in Lebanon, as reported by the Association of Banks in Lebanon. This high concentration of lending in a single sector, combined with lax oversight, left the banking system vulnerable to shocks in the real estate market.

Rotten roots

Nassib Ghobril, the chief economist at Byblos Bank Group, tells Executive that “even before the crisis, there were significant issues with the investment climate and business environment in Lebanon,” echoing Nour’s sentiment that problems have been brewing for some time.

The severity of these issues was already before the financial crisis of 2019 underscored by the country’s dismal rankings on the quality of its business environment. Ghobril adds, “According to the last business environment index issued by the World Bank in 2018, it was found that 75 percent of the world’s countries and 65 percent of Arab countries have a better business environment than Lebanon.”

The Lebanese economy has been hindered by the absence of comprehensive reforms, a lack of action that has damaged investor confidence and economic stability. The shortage of reliable economic data has long been a stumbling block for Lebanon’s economic progress. This persistent issue has made it challenging to accurately gauge the country’s economic health and has deterred potential investors from making informed decisions. Ghobril says that “more data” is needed, and notes that “the recent Fitch Ratings update and S&P report highlight the continuing struggle with data availability and transparency, issues that have long affected Lebanon’s standing with international rating agencies.”

Commercial comebacks and residential roadblocks

While new real estate development projects in downtown Beirut have been at a standstill, the area is experiencing a surprising surge in commercial activity. “There are no new real estate projects in downtown this year,” says Moussa, “however, we’re observing a lot of commercial movement and increased pressure in commercial real estate.” The prices, as Moussa indicates, are approaching levels seen before the crisis.

A cornerstone of this commercial resurgence is the reopening of Beirut Souks, a key shopping center in downtown Beirut, which announced on a June 26th Instagram post that more than 100 stores will soon be open, including Nike, Zara, Bershka, Stradivarius, Virgin, Etam, L’Occitane en Provence, Mouftah El Chark, among others. “The Azadea Group, a leading lifestyle regional retail company that owns some of the brands, will take off in Beirut Souks at the end of this year,” knows Moussa.

Beirut Souks, managed by Solidere, first opened in 2009 after a 10-year delay and $100 million expenditure. The massive complex, which sits on the site of Beirut’s original traditional souks, has been plagued by the same series of unfortunate events over the past years, including the 2019 economic crisis, the Covid pandemic, and the port explosion, which heavily damaged its stores and led it to fall into disarray.

Outside of the luxury retail niche and the commercial sector, the residential real estate market tells a different story. “The real estate sector is still in intensive care, in the absence of financial funding for real estate projects, which is the main nerve for developing the sector. While the majority of projects that are being implemented are self-financed to meet a personal need,” says Nour.

Despite these challenges, demand for real estate persists, particularly in Greater Beirut and coastal areas. Nour points out, “To meet the needs of natural population growth (Lebanese only), we must have an annual increase of 4 percent in residential apartments.” This demand has been further intensified by the displacement of over 100,000 citizens from southern Lebanon due to the ongoing Israel-Hezbollah conflict, leading to increased rental prices in some areas.

In the residential segment, rentals dominate the market as many Lebanese struggle to afford property purchases. Commercial real estate also sees merchants favoring rental arrangements over property ownership. Nour explains, “The merchant prefers to rent instead of buying because he considers the rent as part of the operating cost that provides him with the return on the sale.” This flexibility allows businesses to adapt quickly to changing market conditions.

Price trends vary across regions, with apartments in areas like Baabda, Hazmieh, and Beirut’s suburbs ranging from $150,000 to $300,000. Investor expectations have adjusted, with acceptable profit margins now around 6 percent, a significant drop from pre-crisis levels.

Expatriates and foreign citizens are finding opportunities in the current market. Nour observes, “Expatriates have a good opportunity to buy real estate, especially those who have cash, as they can buy real estate at reduced prices.” In the land market, sellers are often motivated by immediate financial needs and buyers looking to convert cash into tangible assets.

Unsettled ground

While the health of Lebanon’s real estate market has not always mimicked larger economic trends in the country, developers and stakeholders are now besieged with the upheaval of war. The country is in many ways, shaken and turned on its head, with large segments of the population displaced from the south, the Bekaa, and Beirut, and pushed into Mount, Lebanon, Metn, Kesserwan, and elsewhere. In the short term, stagnation or contraction in the market can be expected, with recovery dependent on broader political and security improvements.

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