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Lebanon’s ESG and IFRS Compliance Gap: A Challenge or an Opportunity?

by Zeina Zeidan
written by Zeina Zeidan

As global financial markets prioritize transparency, sustainability, and corporate accountability, countries worldwide are integrating Environmental, Social, and Governance (ESG) standards into their financial regulations. The adoption of the International Financial Reporting Standards (IFRS) S1 and S2, developed by the International Accounting Standards Board by over 20 jurisdictions reflects a decisive shift towards structured sustainability disclosure frameworks.

In contrast, Lebanon remains an outlier. The country lacks a formal ESG regulatory framework based on IFRS sustainability reporting, and government driven ESG policies. This regulatory void risks further isolating Lebanon from international capital markets, making it increasingly difficult to attract foreign investment and sustainable financing.

Private sector initiatives, such as business sustainability and compliance consultancy firm Capital Concept[1]’s effort to engage 100 Lebanese companies in ESG integration, demonstrate growing awareness. Capital Concept has increased the value of their portfolio by 23 percent, from $27 billion to $34 billion, proving that corporations are eager to incorporate ESG compliance into their business models. However, voluntary efforts alone cannot replace structured regulatory frameworks. The question is no longer whether Lebanon should adopt ESG compliance—but rather how soon it must act to remain economically viable.

IFRS S1 and S2: A Paradigm Shift in Corporate Reporting

The IFRS S1 and S2 sustainability disclosure standards set a new benchmark for corporate transparency, placing ESG risks and opportunities on par with financial performance metrics. IFRS S1 requires companies to report all material sustainability risks and opportunities that may impact financial performance, including governance structures, climate risks, and supply chain dependencies. IFRS S2 focuses specifically on climate-related risks, requiring companies to disclose their exposure and their mitigation strategies in alignment with the Task Force on Climate-Related Financial Disclosures (TCFD) framework. With ESG-driven investments exceeding $30 trillion globally, non-compliant businesses risk diminished access to capital, weaker investor confidence, and regulatory scrutiny.

Lebanon’s ESG and Corporate Governance Deficit

Unlike many emerging economies, Lebanon does not enforce ESG disclosure requirements. The country remains reliant on voluntary reporting, with regulatory oversight limited to financial disclosure standards under IFRS.

Currently, Lebanese companies must adopt IFRS financial reporting, but sustainability disclosures remain discretionary. The Lebanese Corporate Governance Code, issued in 2006 as a voluntary framework by the Lebanese Transparency Association, in collaboration with the IFC and the Lebanese Institute of Directors, offers guidelines on governance practices but is not legally binding. A small number of corporations voluntarily publish ESG reports, primarily to meet investor expectations.

However, Lebanon still lacks ESG-specific regulations or mandates for climate risk disclosures. There are no financial incentives or policy mechanisms in place to encourage corporate sustainability initiatives. Furthermore, the country has not aligned with global ESG frameworks such as IFRS S1/S2 or the EU’s Corporate Sustainability Reporting Directive (CSRD).

The voluntary nature of ESG adoption has resulted in fragmented efforts, limiting Lebanon’s access to foreign investment and sustainable financing instruments.

The Investment Case for ESG in Lebanon

The combination of Lebanon’s economic crisis and governance deficiencies has significantly eroded investor confidence. Incorporating ESG standards can serve as a pivotal mechanism for restoring financial credibility and unlocking new funding avenues.

Institutional investors are increasingly embedding ESG risk assessment in capital allocation decisions. According to Bloomberg Intelligence, global ESG assets are projected to surpass $50 trillion by 2025, making up a third of total assets under management. However, in Lebanon, ESG adoption remains fragmented due to the absence of regulatory mandates. The Lebanon ESG Stewardship Program, which helped 100 companies integrate ESG practices, faced uncertainty following the suspension of USAID funding. Sustainable finance instruments, such as green bonds and ESG-linked credit facilities, are only accessible to companies with robust ESG disclosures. By adopting IFRS-aligned ESG standards, Lebanese companies can strengthen their competitiveness in global investment markets.

Non-compliance is no longer an administrative oversight—it is a fundamental risk to Lebanon’s economic future.

A Roadmap for ESG Integration in Lebanon

To mitigate financial isolation and enhance corporate accountability, Lebanon must adopt a structured ESG compliance strategy. This begins with the implementation of a regulatory framework mandating ESG disclosures in alignment with IFRS S1 and S2. Listed corporations, banks, and large enterprises should be required to publish sustainability reports detailing their risks, governance, and mitigation strategies.

Beyond regulation, incentives must be introduced to encourage corporate ESG adoption. Tax benefits and financial advantages should be granted to ESG-compliant businesses, while banks can introduce sustainability-linked loans to support green financing initiatives.

Lebanon must also align its ESG roadmap with global best practices, incorporating IFRS S1/S2, the UN Sustainable Development Goals (SDGs), and TCFD recommendations. By collaborating with regional partners, the country can ensure its ESG policies remain competitive and relevant to evolving international standards.

Conclusion: The Urgency of ESG Adoption

Despite considerable pushback from corporations on the adaptation of ESG standards, ranging from feasibility to regulatory complaints, the global business landscape is transitioning towards sustainability-driven financial models. Lebanon’s continued absence from this shift threatens its economic recovery and international investment standing.

ESG and IFRS sustainability standards are no longer optional—they are critical economic enablers. Lebanon’s government, financial regulators, and business community must recognize that failure to integrate these frameworks will further isolate the country from global markets.

As policymakers work towards economic stabilization, ESG integration must be embedded in Lebanon’s financial reform agenda. A fragmented approach is no longer sustainable. The choice is clear: Lebanon can either align with the future of corporate transparency or risk remaining an outlier in the evolving financial landscape.

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AnalysisAnalysisFinanceFinanceFinance & EconomyWomen's rightsWomen in the workplace

Outside the cigar lounge: Breaking barriers in Lebanon’s finance sector

by Sherine Najdi
written by Sherine Najdi

Gender quotas and inclusion requirements: are they just a window-dressing tool or a driver of real change?  For decades, the finance industry worldwide has been predominantly male, with Lebanon’s financial sector reflecting similar trends. Despite advancements, many women in Lebanon still find themselves excluded from the industry’s “cigar lounge”—the exclusive, informal arenas where pivotal decisions are sometimes made, networks are forged, and leadership roles are often assigned. Though women’s participation in Lebanese finance is increasing, their representation in leadership positions remains limited. While Lebanon’s financial crisis has been harsh on women, it also gave certain finance leaders the chance to note that compared to their male counterparts, women are often more resilient and reliable in times of crisis.

Slowly shifting statistics

While women constitute a significant portion of the banking workforce, leadership roles are still predominantly occupied by men. “Life has taken me from one thing to another. I initially joined as an employee, but over time, I carved out my own space. It wasn’t given to me—I had to fight for it,” says Hasmig Khoury, a Corporate Social Responsibility (CSR) Strategist and member of Lebanon’s Economic and Social Council. Khoury, who spent 15 years at Bank Audi setting up and leading the CSR unit, witnessed and contributed to the sector’s transformation. She emphasizes that leadership opportunities for women, while growing, are still not evenly distributed.

According to Nada Rizkallah, a senior executive and head of risk management at Credit Libanais, women in Lebanon’s banking sector once outnumbered men at 57 percent but were primarily concentrated in middle management or operational roles. “We were always present,” she noted, “but never truly in power.”

This phenomenon is not unique to Lebanon. According to a 2021 report on gender diversity in the financial services industry by Deloitte Global, an advisory and research firm, women hold 21 percent of board seats, 19 percent of C-suite roles, and a mere five percent of CEO positions within financial service institutions globally. In the United States, women occupy 21.2 percent of C-suite positions within the financial services sector, underscoring the global nature of this disparity.

In Lebanon, some women believe this is changing for the better. Maya El Kadi, Deputy CEO and Head of Investment Banking at BlomInvest, after spending 30 years at Blom bank, emphasized that her ascent to leadership was facilitated by strong mentorship. El Kadi’s career trajectory has been marked by many positive moments, and she reflected on how she has experienced a work culture that fosters gender equality. “I had a very good sponsor and mentor within the bank. Somebody I started working with, it’s a man, not a woman, but who really gave me a lot of opportunities. And in a way, this is why I try to replicate that with people I work with, but mostly with women,” she recounted.

Women have proved to be the drivers of systematic change, including in areas related to CSR. Numerous studies have shown that female-led companies have higher employee satisfaction, retention rates, and innovation. This contribution to a healthier culture in the workplace extends outward to areas of CSR. Women make sure that their corporations shift their priorities when it comes to making an impact on the community and the market. A 2024 study by the International Journal of Corporate Social Responsibility found that greater gender equality at the board level led to better CSR performance and workplaces that centered “compassion, kindness, helpfulness, empathy, interpersonal sensitivity, a willingness to nurture, and a greater concern for others’ well-being.”

Khoury’s key role in establishing CSR initiatives within Bank Audi demonstrates how women in leadership push for more sustainable and ethical business practices. “We rocked the boat in getting people on board with environmental and social impact.” Khoury indirectly touched on the systemic barriers women face in finance, particularly when trying to move beyond mid-management roles. “At first, CSR was just seen as a human resources thing, something on the side. However, once the leadership realized its real impact, I started reporting to the general management. That’s when the doors started opening.”This insight underscores how women’s leadership is often undermined until it proves indispensable, echoing the struggles of other women in finance. Moreover, El Kadi supports the idea that women leaders can shift perspectives and leadership strategies, “I think having more female leadership roles will bring a lot to the table. Any diversity does. And I think women, in that sense, look at things differently” she says.

Are informal spaces still a “boy’s club”?

Cultural and social norms continue to influence workplace dynamics in Lebanon. Deep-seated biases persist, even within institutions that profess gender neutrality. For example, gender-based unequal pay is usually justified with the notion that women do not need the same income since they are not the main breadwinners in the family, a reasoning that emerges from the deep-seated patriarchal culture that burdens men with provisional roles within the family structure. Thus, the gender wage gap in Lebanon is to the disadvantage of women—they earn 22 percent less than men—after controlling for factors such as education and job selection as mentioned in a 2022 report by the World Bank.

Furthermore, informal decision-making spaces—such as exclusive business dinners or closed-door boardroom discussions—often exclude women. “It’s not just about getting the job,” Rizkallah says, “It’s about the conversations that happen after hours, in places we are not invited to.” Khoury agrees with the idea of informal decision-making spaces and how corporate cultures can be exclusionary: “In banking, the real decisions aren’t made in boardrooms.” Globally, women remain underrepresented at top levels, struggling to attain equality in opportunities to ascend.

In terms of entrepreneurship, the World Bank report indicates that only 11 percent of women are self-employed entrepreneurs, compared to 25 percent of men​, and just 5 percent of small firms, 5 percent of medium-sized firms, and 25 percent of large firms in Lebanon are led by women. In addition, only 6 percent of firms managed by men have women among the owners, compared to 76 percent of female-led firms that also have female ownership​.

Moreover, Rizkallah reflected on the bias women face during recruitment and promotions, especially when it comes to marital status and motherhood: “You don’t know how many times I’ve been asked in interviews: ‘Are you married? Are you getting married?’ I even used to ask the same question.” This highlights how systemic gender discrimination continues to affect hiring and career advancement in Lebanon’s finance sector. Rizkallah then pointed out that over the course of her career, she found that it was her female employees—married and single alike—who proved to be more loyal to the company and who were more skilled at navigating crises.

Strategies for Survival: Playing the Game or Changing the Rules?

Women in Lebanon’s financial sector have developed various strategies to navigate workplace challenges. Some have leveraged their gender to their advantage, using diplomacy and negotiation skills to gain allies in male-dominated spaces.

Others, like El Kadi, advocate for a merit-based approach, believing that demonstrating competence is the best way to challenge stereotypes. “When you have women in leadership positions, you give role models to younger girls. You also give men the belief that they [the women] can do as well as they do, if not more” she says. Yet, even as women excel, the burden of continually proving themselves persists. Moreover, women tend to morph their behavior to fit the expectations in the workplace:” I don’t accept to see a woman crying at the workplace. It’s subtle, but if we want equality, we have to act like it.” Rizkallah says. This shows the need to adopt a persona stereotypically considered more “masculine,” shying away from any behavior that can be deemed as a weakness and aligning with stereotyped traits attributed to women. This instinct goes against evidence that women-led companies have healthier work cultures, indicating that bringing more care into work is good for companies.

El Kadi emphasizes the importance of moral encouragement by saying “If I want to give advice to girls in the workplace, I would tell them that you have to stand up for yourself. You have to know your value. Nobody will see your value better than you do.”   Although emotional intelligence and support roles often become an unpaid, gendered burden on women in the workplace, the negative “emotional” trait given to women now shows power. Having the emotional intelligence and capacity to see beyond short-term profit goals allowed for a more sustainable and people-centered approach in leadership positions.

Furthermore, women were given roles and responsibilities that were not at the top priority lists of company goals. As Khoury noted, “Even today, CSR is seen as ‘soft work’—and guess who gets assigned to the ‘soft’ stuff? Women,” she adds.This reinforces how women in finance are often pigeonholed into roles seen as non-essential, limiting their chances of rising to CEO or C-suite positions.

Crises as catalysts

Lebanon’s financial crisis has had a paradoxical effect on women’s roles in finance. With many men emigrating for better opportunities, more women have stepped into leadership roles out of necessity. “It wasn’t a gender revolution,” Rizkallah explained. “It was survival. Men left, and we had to step up. Moreover, the working women held the spotlight as they proved more efficient in handling crises.” Rizakallah goes on to say: “During the financial collapse, women showed more resilience. They were better at handling crises because they’ve always had to multitask and adapt.” However, this shift is not without challenges. The financial instability has also forced many women to leave the workforce, particularly those who could no longer afford domestic help or had to relocate with their families.

Khoury pointed out that systemic change is only possible through institutional reforms and commitment from leadership. “We need to stop treating women’s success stories as exceptions. They should be the norm,” she says. While it is valid for some women to get attention for their success stories, this attention should not be based on gender; countless women succeed every day, and it is no exception.

 Most women leaders agree with the gender quota, even though it might be seen as favoritism or forced, however, it is shown to allow top management to consider female professionals when it was not the case before.  This insight ties back to the article’s argument that gender equality in finance needs to be structurally enforced, not just left to individual resilience. When asked whether CSR in banking had died out post-crisis, Khoury states that: “[It is] not a graveyard, but a bench. We’ve been sidelined, but we’re not out.” This metaphor captures how women in finance are often the first to be sidelined during financial crises, even if they played a crucial role in stabilizing the sector.

Opening the doors for the next generation

While progress is evident, systemic change is needed to ensure that women in finance receive equal opportunities. Interviewees advocate for policy reforms, including mandatory gender quotas in boardrooms, equal pay enforcement, and greater work-life balance support. The inclusion of women in the workforce can yield several benefits for the Lebanese economy. For example, the World Bank report states that closing the gender gap in the workforce could increase Lebanon’s GDP by 9 percent, demonstrating the significant economic potential of empowering women in finance.

Education also plays a critical role in shifting mindsets. Several women highlighted the importance of addressing gender bias from an early age, noting how societal conditioning starts in childhood. It’s not just about finance; It’s about teaching assertiveness and raising girls to know they deserve a seat at the table—and boys to see them as equals. 

The finance sector in Lebanon remains a challenging landscape for women, yet the stories of those breaking barriers offer hope for the future, especially when compared to corporate culture in other Middle Eastern countries. However, structural and cultural barriers continue to hinder women’s full participation in Lebanon’s finance industry. While economic crises have pushed more women into leadership roles, they are often stepping in out of necessity rather than structural inclusion​. More proactive policies—such as gender quotas in corporate boards, legal enforcement of equal pay, and financial inclusion programs—are needed to create real, sustainable change in Lebanon’s financial sector. As El Kadi put it, “If they won’t let us into the cigar lounge, we’ll build our own space.”

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UncategorizedWomen's empowermentWomen's rightsWomen in the workplace

Burying the Lead: Obstacles for women in leadership and renegotiation of care work

by Marie Murray
written by Marie Murray

There is no question that having women in leadership positions boosts economic outputs. One 2014 study on women on boards from the Academy of Management found that “female board representation is positively related to accounting returns and that this relationship is more positive in countries with stronger shareholder protections.” Female leaders have also been shown to be more willing to make radical changes with minimized risk. The openness of female leaders to outside-the-box thinking might arise from the experience of operating inside a “box” that wasn’t built for them. Yet, corporations and institutions around the world still lag in capitalizing on this opportunity for growth.

Out of 146 countries in the 2024 Global Gender Gap report from the World Economic Forum (WEF), Lebanon ranked 133 overall and 111 on indicators of women’s economic participation, a number that reflects Lebanon’s “brain drain” phenomenon, wherein young professionals look for success outside the country. A 2016 Oxfam-commissioned AUB study on women in leadership in Lebanon, Jordan and the Kurdistan region of Iraq was conducted over seven months with 24 stakeholders from different regions in Lebanon. It found that “women linked the difficulty of having a leadership role in Lebanon to the dual roles of women (i.e. working within the home as well as in the public sphere), and the lack of community/familial support in a patriarchal society,” whereas men cited perceptions of women’s emotional nature as an inhibitor to leadership capabilities. This dual role in domestic and public work hints at the intersection between care work and leadership, which one might argue are two sides of the same coin: if women are to lead in the public sphere, more men must lead in the domestic sphere. However, despite the grim findings of selective reports, the extensive cataclysms that the country has endured in the past five years have thrown much into question, including assumptions that Lebanon must look outside itself for solutions to social woes. Here, three change-making leaders share their experiences and aspirations.

In Lebanon, the country’s multiple crises and upheavals might actually be helping to shift long-held norms. Deenah Fakhoury is the Executive Director of UN Global Compact Network, an organization with a mandate that, as she explains it, “works closely with the corporate sector to align them on best practices, on human rights, labor rights, environment and anti-corruption, and achieving SDGs (Sustainable Development Goals).” She explains that in the Lebanese context, they also work with the civil society sector, which has sometimes taken on the work of the public sector. Fakhoury says that although traditional gender norms prevail in Lebanon, “the fact that we have a financial crisis has led women to work, not because their husbands would like to see them work or their fathers, but because it is a financial need.” It is hard to find exact counts on how many women joined or left the labor force as a result of the financial crisis or the COVID-19 pandemic, though Lebanon’s ranking for women’s economic participation in the WEF’s 2018 Global Gender Gap report was 136 out of 149 countries. It has since moved up 25 places.

Caroline Fattal, chairperson of Fattal Group, a family-owned distribution company operating in MENA and France approaching its 130th anniversary, says that Lebanon is still in a transition phase, but that “wars, disability and crises” are changing the landscape. In families where the men “used to be the sole breadwinner and had that burden on them,” economic and social disruptions are, in some cases, pushing more women into taking on this role.

In rooms full of men

Both Fakhoury and Fattal have run into hurdles of their own. Fakhoury recalls hearing one of her bosses argue that she “doesn’t need the money as much as ‘Habib’ because ‘Habib’ is a man who has a family to provide for.“ Fakhoury adds, “I’m sure they don’t mean any harm, but it’s in so many minds that because you’re a woman, you don’t need financial independence. Someone will take care of you.” Fakhoury sees this mindset in the corporations she works with whenever she lays the issue of gender equality, the fifth SDG, on the table. Global Compact Network has a workshop for corporations called SDG Day, undertaken for the entire company from janitors and drivers to CEOs. SDG 5 is always the issue she saves for last, because, as she explains, “when we reach gender equality there is a big turmoil of discussions, and everything becomes disrupted.” This particular issue, she adds, is one that always stirs conflict amongst employees themselves, and not with the workshop trainers. But, she says, “we always reach a consensus” wherein the final resolution comes down to a question of “do you want others to be treated the same way you are treated? The moment you make [the issues] relevant to everyone as people, every time in every single company,” there is intense argumentation, but also an arrival at a final sense of accord.

The struggle to occupy a space that has long been dominated by men is something that Fattal says must be learned over time. Fattal, who received her first Forbes mention (of many) in 2014 when she was listed as one of the top 100 most powerful women in business in the Arab world, says that the recognition came as a surprise. When she first became a young board member of Fattal Group, Fattal recalls feelings of intimidation. “When I started and had to go to board meetings I was young, I was the only woman, I was surrounded by lawyers, the external auditors, much older people. And I felt sometimes sick, physically sick.” The problem for many women is not a capability gap, but a confidence gap. According to Fattal, “we need to normalize this for other women. Finding your voice and being confident to speak what you think and not listening to the voices in your head” is something that takes time.

Hasmig Dantziguian Khoury, a Corporate Social Responsibility (CSR) strategist who developed and led CSR at Bank Audi until the end of 2024, says that “if you’re in a boardroom, as a woman you will be more overlooked or undermined than a man would be. Women have to continuously prove themselves whereas men don’t.” To back up this claim, she cites a 2022 cross-industry study on gender bias quoted by Harvard Business Review that looked at workplace environments in four industries that had higher ratios of female to male employees. Even in these spaces, women were frequently interrupted by men, had to downplay their accomplishments, take care not to communicate with too much authority, and would sometimes be held accountable for problems outside their control. Discussing similar workplace biases, Fakhoury says that women have tools to respond to these types of situations that they’ve had to develop throughout their lives. “You navigate, you have that emotional intelligence to navigate around people and help them accept things that they usually wouldn’t…there’s a way to negotiate things that, in some instances, is very natural. It’s a survival mode sometimes.”

The domino effect of mentorship

For each of these women, mentorship has been impactful in supporting them in their roles and it is something they, in turn, offer to others. Fakhoury has been part of the Blessing Foundation, a women’s empowerment organization in Lebanon “where a woman leader mentors a girl at the beginning of her career.” Fakhoury posits that “the more mentors you have that can actually support other women, the more you will balance this gender gap.” Dantziguian Khoury is motivated by a personal mission to support other women however she can and to care for the environment, two issues which can be characterized by “a push and pull of cultural momentum.” In 2018 and 2019, she helped organize an event called Mind the Gap, which had thousands of attendees including the president at the time and numerous parliamentarians. The organizers made the strategic decision to invite only female speakers onto the stage in this event on closing the skill gap in the Lebanese labor force in an effort to reverse the norms.

Fattal, who in the beginning of her career would come across many articles about highly competitive behavior amongst women in leadership, a phenomenon derogatively dubbed Queen Bee syndrome, now sees an emphasis on and greater push for women supporting women. For her part, she ensured that 50 percent of the board members of Fattal Group are female, a change that the whole corporation supported. She also founded Stand for Women, an NGO that works with partners to provide training, tools, and microloans for female entrepreneurs and that purposefully emphasizes sisterhood. In Akkar, they began working with 40 women to give trainings on sewing and making mouneh, and then provided sewing machines and food processors. Following the Beirut port explosion, Stand for Women supported 300 women in returning to business, from flower shop workers and seamstresses to jewelry makers and restaurant owners. They are currently pairing embroidery workshops in Zahleh with trainings on gender-based violence.

Local initiatives such as Stand for Women arguably have greater impact than one-time trainings or limited projects sponsored by foreign funding. Fattal expressed the importance of keeping in consistent contact with each of the female-led enterprises from the initiation of the projects until the present. In this way, the women continue to receive support, mentorship, trainings, and a system of positive accountability.  “We are a small NGO but when we start with people, we follow with them. We don’t just give them the trainings and leave.” She adds that, “It’s not about changing the world. If I impact 50 women, I have achieved something.” Of course, Stand for Women has impacted far more women throughout the years.

The invisible elephant in the room

Cultural biases are not the only obstacles faced by women in leadership.  “Invisible labor,” a term coined in 1986 by sociologist Arlene Kaplan Daniels, is work that occurs both domestically and in the workplace, is undertaken predominantly by women and as such, goes un(der)paid and undervalued. In the workplace, this kind of labor might include event-planning, operational work, facilitation of positive relational dynamics, and minutes-taking. As an example, Fattal says that “when there’s a meeting and we have to order coffee, there’s a woman who presents herself to do that role and it’s expected that she’s the one to do this regardless of her seniority.”

But the other piece is, of course, that in order for women to excel in demanding roles, someone else needs to step in at home. A 2022 report by the UN Economic and Social Council for Women in Asia (ESCWA) found that 94 percent of unpaid childcare in Lebanon is undertaken by women. Oxfam’s 2020 report titled “Time to Care,” estimated that “the monetary value of women’s unpaid care work globally for women aged 15 and over is at least $10.8 trillion annually – three times the size of the world’s tech industry.” The same report found that women in rural communities and low-income countries “can spend up to 14 hours a day on unpaid care work, which is five times more than men spend in those same communities.”

When care work is invisible and unvalued, it often becomes exploitative. In Lebanon, gender equity at work does not always translate to greater gender equity at home. Instead, care work often falls on women working a second shift after arriving home, or is outsourced to female migrant domestic workers. Migrant domestic workers in Lebanon operate under an exploitative ‘kefala system’ and are excluded from Lebanese labor laws. These women can be subject to low wages, human trafficking, uncapped work hours, and can have their passports withheld and experience limited freedom of movement according to a 2021 report on domestic migrant workers in Lebanon by the International Organization for Migration.

Fakhoury believes that negotiations around greater parity cannot exclude anyone, and that the most convincing arguments come from asking people to put themselves in the shoes of others. “Lack of inclusivity is somehow a fear to lose your own status,” but change is possible when people are exposed to alternative options. When she works with corporations on SDG 5, for example, she always brings up men’s right to paternity leave, which, if enacted alongside a better maternity leave policy, might go far in helping men recognize the magnitude of domestic labor and take on a larger caregiving role. It can be argued that women make good leaders precisely because they have had lifelong opportunities to learn care work. If men want to become better leaders who do not shrug off care work in scenarios that lead to exploitation and vulnerability of women, they have much to learn by starting at home.

It begins with how boys and girls are raised, which Dantziguian Khoury believes is changing in “the next generation, Gen Z.”  For her part, she says “I have two young men who I’ve raised to do everything: cook, clean, do their own laundry,” adding that they would be willing to support a wife’s career by taking on more domestic labor themselves. Eve Rodsky’s book Fair Play, on renegotiating domestic labor, discusses how men can benefit from managing the conception, planning, and execution of household tasks that almost exclusively fall on women. For a task like children’s activities, for example, this would include researching the activity based on the child’s interests, signing the child up, communicating with instructors, and transportation. Fattal says that change “can only come with dialogue, and you see unfortunately in many parts of the world that we are going backwards and that would be a real pity.”

A matriarchy of care?

Progress towards greater gender equality might have its own flavor in Lebanese culture, which is sustained in large part by a sturdy familial structure and ethos of social interdependence. This structure has largely been built and led by women who, in the Arab context historically and currently, exhibit tremendous power, authority, and ownership over the sphere of family life, which extends out to spheres of education and networks of social support. An otherwise outdated and rather sexist 1977 comment piece by Reverend Kamal Farah on the Arab family made one observation which is still applicable in many ways, that “the Arab family is both patriarchal and matriarchal, at the same time. Although sociologists generally classify families as either dominated by father or mother, the Arab family has the peculiar distinction of fitting into both categories.”

Author Angela Garbes argues that the individualistic approach to family and society has been damaging for western cultures. In many ways, the lost cultural structure that she describes is one that is still robust in Lebanon. In Essential Labor: Mothering as Social Change, she writes, “The simple fact is that for centuries, throughout the world, we lived communally. Having individual families siloed off from one another … is a relatively recent social structure that we accept … A lack of shared responsibility and interconnectedness makes it difficult to find solutions for needs more easily addressed in community, such as childcare, meal preparation, and household maintenance. It leads to isolation and an every-family-for-themselves mentality. It leaves parents feeling common domestic strains as personal problems rather than structural ones.” But she seems to be arriving at a truth that is already woven through Arab culture when she observes that care work, “that energy and effort to maintain—ourselves, our loved ones, our community—has always felt substantial, true, visceral.” In reference to how care work becomes viewed as overly burdensome when it is undervalued or invisible in patriarchal systems, she comments, “I don’t believe care work has to wreck us. This labor can be shared, social, collective—and transformative.”

The work of negotiating for greater structural equity that allows for more women in leadership does not hinge on removing the familial and social power that women have, but instead in broadening the work of caregiving and invisible labor, ensuring that it does not go unvalued, that women do not shoulder it alone or disproportionately, and that they are protected by a supportive legal apparatus. The future of both ‘professional’ and domestic work need not adhere to patriarchal norms that value one and undermine the other. Rather, a matriarchal system that centers human wellbeing over profit is an alternative that already has its roots in Arab culture, and that, one must add, has enormous economic potential.

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Hospitality & TourismQ&AQ&ATourismTourismTourism and HospitalityTourism Lebanon

Bright, hospitable lights are blinking by comparison: A Q&A with Haitham Mattar

by Thomas Schellen
written by Thomas Schellen

Sustainable tourism is one important vertical under the United Nations Sustainable Development Goal (SDG) 8, for achieving decent work and economic growth. While the clock is ticking hazardously for all SDGs across all countries, the barriers are both regional-context specific and structurally high in Lebanon when the country aims at achieving the ninth sub-target of SDG 8, which is to “devise and implement policies to promote sustainable tourism that creates jobs and promotes local culture and products.” To discuss the sustainable tourism prospects of Lebanon, Executive sat down with Haitham Mattar, the managing director of hotel operator IHG Group (locally carrying the fame of the Intercontinental Phoenicia hotel) in the India, Middle East and Africa (IMEA) region. Mattar is a Lebanese hospitality sector executive who visited Beirut on the occasion of a new hotel brand’s arrival in the heart of the Beirut hotel district.

How are you going to reposition the property that you have opened last November, still during the latest war on Lebanon, and how difficult do you consider the Lebanese tourism market to be?

Like any market around the world, when you have stability and security [you have good operating conditions], and can add to that the natural assets of a destination. As you know, Lebanon is a destination that is very rich in history, culture, and gastronomy, with beautiful natural assets. Also, tourism is not something new to Lebanon.

Indeed, when you look here across the street you see the hotel Phoenicia which has been in relationship with Intercontinental starting over 60 years ago, correct?

We signed the relationship with the Phoenicia in 1961 and now we have added this Voco and very delighted to enter partnership with its owner Hani Sheet. He had a vision for this hotel [formerly Monroe hotel] which had a legacy and traded very well when it was open for many years but he wanted to take it a level up with an international brand.

Voco is a newish brand that is only seven years old but it has accelerated in growth. We have the largest Voco in the world in Saudi Arabia with 4500 keys in Makkah, and we recently opened a Voco in Jeddah with 750 keys. It is an up and coming brand that is liked not only by guests but also by investors, because it offers great returns on investment.

The short brand name with its appellative Latin word origin may enter the memory quickly. But how is the brand positioned in the order of IHG Group brands, vis a vis the Intercontinental and the Crown Plaza brands for example?

It is above Crown Plaza and just below the Intercontinental. It is a five-star brand but it is also young and at the border of a lifestyle hotel. It is not a full lifestyle brand but very close. It is informal. When compared with the Crown Plaza which focuses more on events and some groups, here [at the Voco] you have more individual travelers and families. You also might have small meetings and small groups, unlike the Crown Plaza. It is just below the Intercontinental which is our luxury brand.

I understand that the IHG Group has some 375,000 people in its workforce globally, and some 6,600 hotel properties under operation. How many hotels are based in the region that you oversee?

That is correct. 220 [hotels] and 33,000 employees are in my region, and we have four offices, in Dubai, Delhi, Riyadh, and an office in Johannesburg looking after Africa.

This means your region covers all of Africa, plus the Eastern Mediterranean, plus the Arabian peninsula, plus the Indian subcontinent?

India, Seychelles, Nepal, Sri Lanka, Bangladesh, and Pakistan are all in my region, and all of the Middle East and Africa. Those are 42 countries.

If I rank these 42 countries by business volume and by difficulty in terms of managing the market, where would Lebanon emerge?

Let us talk about the ease of doing business. Lebanon is one of the countries where the ease of doing business is somewhat challenging. If you do not have the right connections, it is difficult for you to get a license, especially if you are bringing people to work here from outside the country. But we have seen that in recent years the business environment has been improving very much. And yesterday I met his excellency, President Joseph Aoun of Lebanon. He is clear on his vision in terms of safety and security of the people of the country but also focused on driving the economy. He is also focusing on hospitality and tourism as being drivers of the economy. We talk about the ease of doing business and it is also a key priority for his new team and him to improve the processes of doing business and getting licenses and permits here in Lebanon. He was very optimistic, and we left the meeting feeling very optimistic about the discussion with him and also about the coming summer which he said would be great for tourism in Lebanon. We were very comfortable.

Over the past three decades, Lebanon was a market with two strong seasons, the summer and the year-end holiday seasons. Other times were much weaker and down seasons were difficult to manage. These circumstances were hard for many operators, on top of which there were extreme times in 2021, after one year when the hospitality sector was apparently the hardest hit by the Covid19 pandemic and lockdowns as well as the impacts of the Beirut Blast. The stabilization of this market was challenging even before the weakening of tourism by 32 percent now in 2024. That leads me to ask you how difficult this market is for strategic planning and development?

It is not difficult for strategic planning. In Lebanon you have long stretches of beaches and beautiful mountains, ski resorts, agri-tourism, culture and heritage, so there are great foundations. I do not see any difficulty per se, however, I will tell you what is required to avoid these dips in seasonality that you rightly mentioned. What you need [in tourism] is a 365-day business. You cannot run everywhere at 80 percent occupancy all of the time but if the city can run at 70 to 75 percent occupancy, this is very healthy. We have two busy quarters of the year. The rest of the year will need the efforts of the tourism ministry to thrive through activations and through events. This requires full collaboration between all ministers to make sure that you have the right infrastructure, not just roads and parking, so that participants have a pleasant experience when you have a conference of a reasonable size. Think about it: all of Lebanon has 6,000 hotel rooms, of which 2,000 plus are in Beirut.

What is the market share of IHG Group brands out of this total Lebanese hospitality market with an estimated direct tourism contribution to GDP in the 7 percent range between 2015 and 2020, according to UNWTO data?

We are the largest hotel operator in Lebanon. We have probably more than 50 percent of international brand hotel rooms. If you take the 6,000 rooms in Lebanon, [IHG Group brands] have at least 1,500 rooms.   

And IHG Group has already many years ago divested from hotel ownership into the operator-only model, so all of these hotel rooms are operated under the portfolio of brands, including now Voco, but you don’t have any ownership stakes in these hotels, is that right?

We don’t have any ownership anywhere in the world.

You mentioned your collaboration with investors. How long is the average contract duration under which you operate a property? And regionally, how many Voco hotels are today up and running and how many are in the pipeline?

The minimum is ten years and the average is about 15 years. That is the same also for the Voco brand. Under this brand, we have now 11 Voco hotels operating in the IMEA region and 15 in the development pipeline.

In Voco, you have a brand under expansion. What is your main selling point to investors?

The brand started out as a conversion brand. When a hotel that operates a certain brand is leaving, we come to the owner [of this real estate] with a very efficient conversion plan that allows the owner to save costs on their conversion and [align their property with the international brand]. We offer solutions with Voco to allow the owner to invest into the areas which are most guest-facing. We focus on the impacts on guest experience as a priority. We de-prioritize other areas and we plan [developing these areas] for a future time. So, for example we do a three to five year plan with the owner to convert to a new brand. Plus, [it is an attractive investment] because this brand is an informal brand that targets young business travelers and young families.

While there were a few years in the past twenty years which saw tourism blossom to the point of Beirut being added as destination of cruise liners, there were immediate downsides to the visitor boom, such as food price inflation in the downtown hospitality sector and aggressive hawkers of tourist trap restaurants lining Maarad Street in downtown. You are an expert on sustainable tourism. What would you recommend for ministries of Lebanon, such as the Ministry of Tourism or the Ministry of Economy and any other ministry with a stake in hospitality and economy,  for developing the tourism sector sustainably beyond the seven or eight percent contribution of tourism to GDP that were reported in the latter part of the 2010s? Where would you see the country going in sustainable tourism?

Lebanon is a country that has been deprived of energy for a very long time. I think we have seen a decline in energy supply since the time of the first civil war. Renewable energy will play a key role in Lebanon’s future. No investor wants to put money and continue to pay for diesel and generator. The emissions and the impact on the environment that these generators have, makes it a third world country. Renewable energy is very important for the country to focus on.

Also, when you look at sustainable tourism development, it’s anything that engages the community. When you see countries like Spain and Greece complain about over-tourism, one of the main reasons is that the residents of the country don’t feel the benefit from tourism. They feel that the tourists come and go but only occupy our buses, our streets, our restaurants, giving us traffic and inflation but do not give us benefits. If the communities are engaged and feel that they are being consulted and offered opportunities to contribute to the tourists, whether selling them goods or experiences, the communities and tourism will grow together.

Also, a big trend today is that people are looking for agri-tourism. Lebanon is a country that has a wealth of farms and orchards, whether it is oranges or peaches or apples, and people love to have that experience today. Lebanon must focus on these kinds of experiences that people are yearning for today. They take long trips and travel abroad in order to be able to walk through an orange field or a vineyard. We have vineyards and vineries that have been long established, so I would say the foundation for tourism is there. The biggest need for solution is one, for stability, and two, is for all ministers to come together as one and focus on driving tourism. Then that seven percent [of GDP from tourism] can easily become ten and twelve.

How can you drive tourism when the Ministry of Tourism has a budget that can cover only the salaries of its public servants and keep the lights on at the ministry and depends on the good will of the advertising industry when it comes to producing even a promotional video filled with long-held cliché images? Would you as the largest branded hotel room operator in the country be willing to invest into a promotion campaign for Lebanon as tourism destination?

All our hotels, here or around the world, pay what we call a marketing contribution. This marketing contribution allows us to market a hotel on our channels to our loyal members. We have 140 million loyal members. This is part of what we do to promote our hotels globally. Of course, when the war is there and there is no stability, there is nothing really to promote in Lebanon. We hold back on this. But we are ready to reactivate this [marketing effort] as soon as we feel what we felt today in meeting with the President [Joseph Aoun] who is giving us this confidence. We activate these promotions for our Lebanon hotels again through our hotels globally and through our loyal member and our rewards programs, our website and our applications. We reactivate our Lebanon events.

But that is only one part. You need the destination management and marketing. This is really critical, and unless the two are working together, [it will not function]. I cannot promote the destination; I can promote the hotels [of IHG Group] and the neighborhood but I need help from somebody to promote the destination. So, if the [Ministry of] Tourism has not enough budget, the Middle East Airlines has to come on board. I am sure that they want more capacity on their flights. So if you want to fill your airlift, you must promote the country, you must promote through the destinations and the routes. All together, the eco system can work together. You cannot promote tourism alone or the country. We all have to come together, hospitality, airlines, which are the lifeline of tourism. MEA has a great reputation and good planes, and decent service.

In the past few years, hotels and hospitality operators in Lebanon faced many unexpected financial troubles even in the face of insured business interruption events. Did you face difficulties of managing the cost of the Lebanon operation during recent years?

 Like any other hotel company, we have gone through ups and downs. The hospitality industry has gone through very challenging times, not only in Lebanon but across the world. If you recall the 2008 financial crises, it impacted the whole world and places like Dubai had a major share of impact and losses. But I always say that hospitality is too big to fail and very resilient. People by nature love to travel and by nature always want to reconnect. If you remember how it was said during the Covid [19 pandemic] that [travel] will never happen and we all will be on screens; group travel will never happen again, business travel is gone. But you see immediately after that we are creatures of habit and everybody goes back to their normal life. This is what makes us resilient.

When measured against the SDG 8, achieving sustainable tourism, the sector is globally faced with climate dangers as well as challenges related to migration, trade conflicts, political barriers, etcetera. Many of these barriers are not found in the Middle East region, however.  Is the biggest challenge for tourism in this region the reputation of countries in general terms?

I would say the biggest challenge is stability, all around, not just in Lebanon. Look, Syria is the cornerstone of the region. If anything happens positively in Syria, it will explode outwards, positively. If it is negative and it implodes internally, that still has a negative impact on the entire region. So how Syria will pan out and come to be a real democratic system, will impact the entire region.

This was actually my next question. To go beyond Lebanon, do you still operate the Intercontinental in Damascus?

Not for many years.

But you signed in 2024 for the Holiday Inn in Damascus?

We signed for the Holiday Inn near the central Souq Al Hamidiyeh but the site hasn’t opened yet because of the lack of stability. But I envision that in a democratic Syria, where safety and stability return to the country, [Syrian hospitality will shine as] another country that is very rich in culture, natural assets, and beaches, and that today lacks hotel properties. Even in Damascus you don’t have the [room capacity] and outside, like in the beach cities such as Latakia and historic cities such as Aleppo, there are no hotels.

In the past few decades, development of cross-border tourism in Lebanon was severely hampered by the fact that it was either very difficult or at times impossible to visit nearby countries and so people visiting Lebanon for leisure and cultural travel, were stuck here. Now, with Syria opening up from perspectives of both construction and business but also tourism and hospitality, would you see Lebanon as a base for people from international companies to stay at IHG properties in Beirut and commute to Damascus? Is your Syria development strategy related to the local market in Lebanon? What are you planning for the opening of Syria?

We do not have any plans for Syria yet. The plans will start when you have closure on where Syria is going in terms of governance and when we know for sure that there will be stability in Syria. That is what we wish for, hope for, and pray for. After that, we will seek opportunities in building hotels, as soon as these countries are classified as safe countries and safe business locations.

Some easing of EU sanctions on Syria have been recently announced, especially in areas of transport and energy, so this should be good for you, and I would assume that you have already some connections with investors.  

As soon as the sanctions are [lifted], we will probably be among the first to enter Syria. We have connections with investors and the brands that investors seek. I think everybody is waiting for things to happen. What I imagine is people coming to Lebanon and enjoying Lebanon’s offerings but then to be able to rent a car and drive through to Syria and have the same experience and stay in our hotels as by cross-selling between hotels in Lebanon, Syria, and Jordan. That could be wonderful. Stability is the key component for tourism. Tourism is a force of good.

So if we look to an optimistic scenario for Syria, how many Voco hotels would I be able to stay at in the Syrian countryside?

I don’t know, hopefully many. But the beauty of having our brands is that once we know that the opportunities are open for us in Syria, we will start a market strategy that allows us to study the entire country and see which of our brands fit where. Then we will seek investors’ interest where we want to go, whether it is a city hotel, budget hotel, or luxury brand, or a resort. In this we work with stakeholders on the ground but also with other investors, which could for example be investors from the [Arabian] Gulf who are interested to build hotels in Syria. 

What is the role of the conference and event business. How are F&B, the food and beverages and events business shaping up when compared with room rentals? Is the mix healthy?

It is more geared towards rooms, se we have more [accommodation] business than F&B because we still need the wedding business to come back and we also still need the catering, the big conferences and events. If you say F&B, it is all of food and beverage and especially banquets. This has not revived so much yet but this hotel [Voco] has done so far two conferences and so I can see that the small to medium event business is coming back. The large events business is still not back.

How can Beirut hotels again attract large conferences, perhaps near-future conferences focused on reconstruction in the Eastern Mediterranean countries, and important events on building a sustainable Syria or potent civil society? How can you help in pulling them into Lebanon instead of seeing events on Lebanon and Syria take place in Cyprus, Dubai, or a European city?

This also needs to be a collaboration between us and the government and the convention center. You need the expo center to be able to bid for some of these conferences, noting that the bidding process for some of these large conferences is such that they are booked already five or ten years in advance. They already go to destinations, so the sooner Lebanon starts to bid for these conference, the sooner we can secure some of them. Here I am talking about events that are city-wide, that fill our hotels as well as anybody else in the city. I see great opportunities and healthy competition for tourism in this city.

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GCC

Dubai Sour-Sweet Trading Dreams

by Executive Contributor
written by Executive Contributor

After years of planning, the Dubai Mercantile Exchange (DME) opened for trading on June 1 with its flagship Omani crude futures contract. It’s a collaborative effort bringing together Tatweer, a unit of Dubai-government-owned Dubai Holdings, the New York Mercantile Exchange (Nymex) and the Sultanate of Oman.

The DME’s mission statement and declared rationale is to bridge the gap between international pricing mechanisms for sweet, or low-sulfur, crude and the Gulf’s more sulfuric (sour) oil, especially for trade with Asian oil buyers.

The price of sour crude from the Middle East is currently set in reference to inappropriate benchmarks — futures contracts for very different products traded on the world leading commodities exchanges, Nymex and London-based Intercontinental Exchange (ICE).

The idea of establishing a platform for setting its own benchmarks, enhancing profits, and managing risk in the trade of Middle Eastern oil is not new, it has just never worked before.

Part of Dubai’s goal as financial center

This dream to host the oil futures benchmarking is tied to Dubai’s goal of claiming the role of financial center between East and West through the Dubai International Financial Centre (DIFC). At its inception in 2002, the DIFC was labeled as tool to boost the contribution of the financial industry to the emirate’s GDP from 11% in 2001 to about 20% in 2010. While the DME makes reference to this target in documents on its website, it did not state how large a role the exchange aspires to play in this mission.  

Being the center for sour crude futures trade could prove to be lucrative, given that the DME’s fees per trade are around $1. Brent (ICE) and West Texas Intermediate (Nymex), currently see daily volumes average around 150,000 trades.

The value of having a role in the futures contracts for Middle East oil was underscored by the ICE when it beat the DME to the punch by launching a similar contract on May 21 to directly compete with the DME. There is, however, a major difference in that the ICE sour crude contract is cash-settled whereas the DME’s contract is physically — actual barrels — settled and backed by the governments of regional oil producers. (Although only about 5% of physically-settled futures contracts result in the buyer actually taking the physical product).

High daily volumes are the backbone of a futures contract, which is essentially an agreement to buy a commodity later at a locked-in price. Therefore the 100 contracts, or lots, a trader buys on Monday at $68 each can be sold on Tuesday if the commodity’s price climbs.

Any futures exchange is, however, extremely volatile and contracts are traded quickly, often to maximize profit (as opposed to investors in the equities market who typically hold an investment for a longer period of time). Traders want to be able to get in and out of contracts at a moment’s notice.

This liquidity, however, is the element previous Middle East oil contracts have failed to grasp. Muted trader interest that kept liquidity low killed the first sour crude futures contract launched in Singapore in 1990. The flops that followed have either completely failed or traded in such low volumes they have not reached the status of a price benchmark.

A Nymex solo attempt at a sour crude contract, launched in 2000, only saw two days of trading but remained listed for a year. The DME partnership is Nymex’s fourth sortie into the sour crude futures arena, while the ICE is making its first dash into this market, although it did, however, acquire the International Petroleum Exchange in 2001, whose attempt at a Middle East crude futures contract had turned sour in 1991.

On the DME, contracts are traded for delivery two months in the future. In its first month of trading, 39,571 Oman crude oil futures contracts changed hands — the equivalent of nearly 40 million barrels. This was slightly lower than the rival contract launched by ICE, which saw over 50,000 futures contracts, equal to over 50 million barrels, trade in its first month.

In an attempt to avoid the plague of illiquidity that downed other contracts, the DME has instituted a market maker program. This common practice brings industry heavyweights (like traders and investment banks) to boost liquidity levels, offering cash incentives to increase daily trading volumes to the 20,000 mark, after which, according to the DME’s website, the program will tail off.

Still too early to tell

“The initial target figure mentioned by the DME was 20,000 lots per day and while volumes were reasonably promising to start with, liquidity has since declined to under 1,000 lots on some days,” commented Paul Young, executive oil pricing editor for Asia with the commodities pricing firm Platts. “But it’s still way too early to give an overall verdict on the success of the contract and the DME is launching new initiatives intended to improve liquidity.”

“The Asian market welcomes the DME as a more transparent benchmark for pricing purposes. I think liquidity level at this point remains an issue, but it is still early days for the exchange,” Victor Shum, a Singapore-based energy consultant with the firm Purvin and Gertz, told Executive. “I think the general sentiment seems to be, ‘Well, let’s take a wait and see attitude.’ I think the DME has the elements there to be successful. I think most traders would like to see rising liquidity.”

Gary King, DME’s chief executive office emphasized the contract’s innovative elements when giving his outlook on the contract’s future. “We decided to align ourselves with a Middle East oil producer,” King told Executive a few days before the June 1 launch. “No one’s ever done that before.”

King said market research revealed customers who wanted a physically delivered contract and not the traditional cash-settled contracts and the contract launched in May by ICE. This offers a direct link between the paper market of the futures contracts and the physical commodity. In a bid to meet what King described as market demand, the DME set out to find a producer to partner with for the physical delivery.

Oman announced before the contract’s launch that it would base the price of all of its crude on the DME contract price, starting this month. In late June, in a move apparently timed to offer one last burst of good PR before the launch, the Dubai government, which essentially has about a one-third stake in the bourse, made the same announcement regarding its oil contracts two days before trading began.

Government backing from producer nations for the contract will certainly help lend it credibility, but the exchange has only rallied two middle-weights — Oman and Dubai — in a region of heavy-weights, John Sfakianakis, chief economist with Saudi Arabia’s SABB bank, told Executive.

Oman has 5.5 billion barrels of oil, according to estimates from the U.S. government’s energy information agency. That’s the second lowest level of reserves of the six Gulf Cooperation Council countries behind Bahrain with less than one billion barrels.

The agency’s figures estimate the UAE has 97.8 billion barrels, but UAE government websites put Dubai’s share near 4 billion in 1991. Abu Dhabi sits on an estimated 94% of the nation’s reserves.

Some are being left out

“I’m a little bit skeptical because Abu Dhabi should be a natural participant in this,” said Sfakianakis said. The DME has approached other regional producers, but came back scant on direct commitments.

“We’ve talked to all of them, and I think the proof is as we go forward, the goal is to get the contract accepted as regional benchmark and overall the ultimate goal is to get it accepted as a global benchmark,” King said in an interview the day the exchange opened.

“I think what’s accepted is that it’s important to get first three contracts trading, demonstrate they trade in a robust fashion, that they’re liquid and that you get effective price discovery,” he added, referencing the two cash settled futures contracts that are spreads between the Oman crude price and the prices of WTI and Brent.

But what of Saudi Arabia, the 800-pound gorilla, which holds the second-largest oil reserves in the world? “At the moment you can safely say that Saudi Arabia is not involved,” Sfakianakis said.

An exchange of their own

Given the goals of other GCC nations to power up their own financial hubs, it is possible that bigger producers have not shown the urge to commit to the DME sour crude contract, because they would like to run a benchmarking exchange themselves .

One contender is Qatar’s IMEX, which has just appointed its first CEO. The exchange has been rumored to look longingly at sour crude contracts, in addition to jet fuel and liquefied natural gas futures. IMEX, just like DME, is not yet letting on what futures it plans to introduce in the coming months.

Competitive pressures notwithstanding, Dubai’s financial services sector is an undisputed pillar for the economies of both the emirate and the GCC, now and in future. The question is if it will be the Gulf’s sole central financial market place. According to numbers released in June by the Dubai Chamber of Commerce and Industry, finance in 2006 contributed to about 10% of the emirate’s rapidly expanding GDP — and thus would have to significantly outpace other growth sectors within Dubai if it really is to supply 20% of the emirate’s GDP in the next decade. 

The DME’s immediate concerns will be for developing its products and client base beyond the discounts it offered traders in the startup phase. Since early 2006, there’s been talk of a jet fuel futures contract, and King has said in interviews during the DME launch that this could be running by year’s end. He added that the exchange is keen on trading other commodities but was reluctant to give details.

“The market doesn’t take prisoners. We’re holding most of those ideas close to our chests at the moment,” he told Dow Jones on June 1.

Diversifying or bringing other producers on board or simply securing pricing agreements would be a boon for the nascent exchange, but is not an absolute make or break necessity. In the end, analysts argue the market is ready for change, but is there room in the market for two or more sour crude contracts?

“Not really,” says Michael Davies, senior analyst with the London-based futures brokerage firm Sucden. “At this early stage, there needs to be a focus on one.”

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Gglobal indicators

Youth inactivity  

by Executive Contributor
written by Executive Contributor

 On average, across the countries for which data are available, around 7.7% of teenagers were neither in school nor at work in 2004. Differences across countries are large: in Denmark, Germany, Iceland, Luxembourg, Netherlands, Norway and Poland less than 4% were in this situation while the shares exceeded 10% in Portugal, Spain, the United Kingdom, Mexico and Turkey.

For the OECD as a whole, there has been a decline in the percentages of all teenagers who are neither in employment nor education, but the decline has been most marked for females. The fact that young people, and particularly females, spend more time in education than they did a decade ago has contributed to this.

Several features of the labor markets and training systems affect the ease of transition from school to work. OECD reviews of youths’ transition from school to work have identified Nordic and English-speaking countries as those where this process is smoother than in countries in Continental and Southern Europe countries. Beyond waste of human capital and risks of marginalization in the labor markets, delays in settling into jobs will lead many youths to live longer with their parents and defer the formation of independent families, further compounding fertility declines.

Middle East Tourist Number Forecasts

By Country, in Millions of tourists per year

Saudi Arabia, owing to ever-increasing numbers of

hajj pilgrims, is set to overtake Turkey as the country with the highest visitor numbers in absolute terms. By 2010, Iran expects the number of tourists to double (from roughly 2 Million to over 4 Million per year) and both the UAE and Lebanon plan to almost triple their numbers, the first from currently 7 Million to 20 Million and the second from 1.5 Million to 4 Million tourists per year. Yemen has the most ambitious forecast, aiming for an over 400% growth in the numbers of visitors from currently under 500,000 to 2 Million by 2025.

Traditional destinations Turkey, Egypt and Jordan foresee significant increases as well, each estimating their numbers to rise by at least 50%, to 30 Million, 16 Million and 12 Million, respectively.

Gross domestic expenditure on R&D

Percentage of GDP, 2005 or latest available year

Since 2000, R&D expenditure relative to GDP (R&D intensity) has increased in Japan, and it has decreased slightly in the United States.

In 2003 and 2004, Sweden, Finland, and Japan were the only three OECD countries in which the R&D-to-GDP ratio exceeded 3%, well above the OECD average of 2.3%. Since the mid-1990s, R&D expenditure (in real terms) has been growing the fastest in Iceland and Turkey, both with average annual growth rates above 10%.

R&D expenditure for China has been growing even faster than GDP, resulting in a rapidly increasing R&D intensity, growing from 0.9% in 2000 to 1.3% in 2005.

Global chocolate consumption

Kilogram per person 2005

n The biggest consumers are manufacturing countries Belgium, Switzerland, and the UK, whose citizens eat 10 kg or more of chocolate each year. Germany and, surprisingly, the four Scandinavian countries follow close behind, whereas such European countries like France (4.66 kg/person) and the Netherlands (2.94 kg/person) are below the EU average of 5.23 kilogram of chocolate per person in 2005.

Chocolate consumption thus is not directly related to GDP or average income levels, but more influenced by culinary tradition, visible in the fact that Japanese consume only 1/5 of the amount of chocolate that Belgians do.

Source: International

Confectionary Association

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EconomyLebanonLebanon 2025

Cautious hope and determination:

by Executive Editors
written by Executive Editors

Holding our new leaders accountable

On Saturday, February 8th, 2025, Nawaf Salam and Joseph Aoun signed a decree for the formation of a new government after two years of political paralysis and vacancy. The new council of ministers faces the daunting task of restoring sovereign trust and rebuilding the country’s neglected institutions and beleaguered industries.

In our responsibility to uphold freedom of expression as part of the Fourth Estate, Executive has developed an Economic Roadmap in collaboration with stakeholders from economic and social sectors across the country over the last eight years. This comprehensive, data and research-driven framework represents the hopes and ambitions of the Lebanese people and provides members of parliament with pragmatic solutions and policy proposals as they are tasked with responding to our long overdue demands. It is our duty to hold our leaders to account.

As an independent media, we are also responsible for empowering the public with information on our governing body. Executive has had numerous conversations and received contributions from at least 11 of the 24 new ministers, including Prime Minister-elect Nawaf Salam.  As our nation moves forward with cautious optimism and determination, it is critical to learn about our representative ministers’ roles, perspectives, and areas of expertise through the years. This knowledge will help us hold our new leaders to account as they take up the arduous work of “Rescue and Reform.”

Here are contributions to Executive from our new ministers throughout the years, alphabetized by first name:

Fadi Makki: Minister of Administrative Development

2021 comment on how applied behavioral science can help inform COVID-19 lockdown measures

2018 comment on the integration of behavioral science and policy-making

Fayez Rasamny: Minister of Public Works

2009, 2010, 2014 interview contributions to analyses on the car dealership industry in Lebanon

Haneen Sayed: Minister of Social Affairs

2024 comment on Lebanon’s trials and opportunities as a refugee-hosting country

2020 comment on why direct support to those increasingly impoverished in post-crisis Lebanon can be more effective than subsidies

Joe Saddi: Minister of Energy

2015 comment on how the Middle East professional service firms can entice emigrants to return to the region

Kamal Shahedeh: Minister of Displaced Persons

Shares his 2003 opinion on the development of telecommunications infrastructure, the importance of creating technical availability for broadband and eliminating access barriers in Lebanon

Nawaf Salam: Prime Minister

2013 Q&A with then ambassador to the UN, Nawaf Salam, on Lebanon’s seat in the security council, the importance of national unity, and the case for recognition of Palestinian statehood

Nizar Hani: Minister of Agriculture

2017 interview contribution to an analysis on the offerings of the Shouf region, and specifically, on the ecotourism potential of the Shouf Biosphere Reserve and the ecosystem of the surrounding area

Paul Morcos: Minister of Media

2020 Q&A on judicial capacity and accountability

2019 comment on freedom of the press

Tamara El Zein: Minister of the Environment

2023 interview contribution to an analysis on how investment in research and education can improve public health and the fight against diseases in Lebanon

Tarek Mitri: Deputy Prime Minister

2014 Q&A on the reopening of the Sursock Museum and the need for a balance between preservation and innovation in Lebanon’s urban and cultural development

2010 Q&A on journalistic and press freedoms in Lebanon

Yassine Jaber: Minister of Finance

2009 Q&A as a then-member of parliament sharing his views on the partial privatization of Èlecticitè du Liban, the importance of pursuing Lebanon’s offshore oil and gas resources, and strengthening of public schools

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Regional outlook

Middle East 2006

by Executive Contributor
written by Executive Contributor

Winners and Losers

Aspecter is haunting the Middle East. A little more than a quarter century after the Shah’s fall, Ayatollah Ruhollah Khomeini’s wildest dreams seem to be coming true throughout the region, from the Gulf to the eastern Mediterranean. Where Iran has not engineered Washington’s failures, it has profited from them, and the regime means to ensure its role as the regional power and leader of the Muslim world with the bomb.
The momentum shifted too fast for the Bush administration. After all, just a year ago, the White House felt vindicated if not triumphant as it watched its democratization program on the march throughout the Middle East. Syrian troops had withdrawn from Lebanon, the Iraqi insurgency appeared manageable, and Cairo and Riyadh were slowly bending to Washington’s desire to reshape the region in its own liberal, pluralist and democratic image. But when the Palestinians voted for a party that the US State Department has designated a terrorist organization, the White House was left sucking wind.
Iran and Qatar were the winners this year (for entirely different reasons), while Syria, Hizbullah, Egypt and Jordan broke even. The United States was the big loser, along with pretty much anyone who was banking on Washington to push for pluralism, liberalism and democracy in the Middle East. Here’s how the region’s major players fared in 2006.

Lebanon: Loser
It is almost two years now since the assassination of former Prime Minister Rafik Hariri, and still no one has been indicted for the crime, even though the investigation into his death plunged the country into a dangerous spiral. Assassinations and bombings were less common this year than last, but Syrian allies threatened to bring down the government to stop the formation of an international tribunal that would hand down indictments. But if there is no real mechanism to arrest any regime figures named in Hariri’s death, why has Damascus allegedly killed again and again just to avoid being named a killer? Perhaps it is just a matter of a prestige, legitimacy and saving face. After all, it’s worth remembering that as Syrian troops left Lebanon at the behest of the international community, they would presumably like to return in the same fashion, invited in, just as they were 16 years ago. Meanwhile, the Siniora government seems to have finally realized that it is in an existential fight for the future of Lebanon.
After Hizbullah single-handedly dragged the country to war this summer, many of those same youth who took to the streets in spring 2005 to demand their freedom, sovereignty and independence are wondering if their beautiful, beloved country can escape the fate that its enemies, both foreign and domestic, have designed for it. Some of the rising generation is leaving, some have already apparently enlisted in what may be the next bloody round of conflict; others are hopeless. It is a dark hour for Lebanon.

Hizbullah: Even
Since their bookkeeping is a closed affair, only the party of God knows how many of its fighters were really killed in this summer’s war and how much Iranian money has really been handed out for reconstruction. But if Hassan Nasrallah says the victory was divine because he personally survived an onslaught that ravaged his community, then what’s several billions of dollars in damage and lost tourism receipts? Resistance is never having to say you’re sorry. To be sure, the muqawama is readying for the next round against Israel, but you don’t have to read biographies of Zionist officials past and present to know that Israel is preparing as well, and has no intention of being fooled again. On the domestic front, the country’s other confessional leaders assume that Nasrallah understands the price to be paid for violating Lebanon’s consensual system. Maybe he does and maybe he doesn’t care; after all, all his rivals have right now is each others’ word, while the resistance can count on two ascendant foreign powers happy to arm and rearm it.

Syria: Even
Surprisingly, Western diplomatic circles, policy-makers and journalists are still curious to know if Damascus can be pried loose from Tehran and forced back into the “Sunni fold.” It is a piece of speculation that fails to credit Bashar Assad for Syria’s strategic re-orientation, or revolution: He has bet the house on Tehran and can’t afford to walk away from the table. In tying his own fate to Iran’s, Bashar has indicated that he is not the calculating realist and balancer-of-powers that his father was, but rather an ideologue, a true believer and someone who chooses to work without a safety net. For years, Saudi Arabia virtually floated Damascus; and as an Alawi president of majority Sunni Syria, Hafez knew better than to burn such bridges. Could he have imagined his son’s daring gambit? Maybe not, but he surely reckoned the consequences of guessing wrong.
On closer inspection, it seems that Bashar himself is of two minds about the future of the Middle East. With the mayhem he has abetted in Iraq and Lebanon, young Assad argues that the region is best understood and manipulated through its inexorable sectarian issues. However, by siding with Iran and Co., he appears to believe that fighting Israel and the West can create heretofore unimagined alliances, a cross-sectarian culture of resistance. Well, it’s true that his regime became popular both at home and throughout the region through his steadfast support—and re-supply—of the Islamic resistance during its recent war. But he should perhaps recall Abu Musab al-Zarqawi’s parting shot at Hizbullah, delivered a week before the al-Qaeda man’s death: the Shia are protecting the Zionists from the genuine Sunni resistance. Memories can be fungible in the Middle East, but history is long and that particular intra-Muslim fight is over a millennium old.
That is to say, Bashar has lit the torch at both ends—one way or another, he’ll get burnt. Maybe the Hariri tribunal will indict him and/or regime relatives, but the US and Europe have been reluctant to make him pay for his violence in Lebanon, Iraq, Israel and Palestine. The Israelis, however, may be a different matter. If there is another round in the Israel-Hizbullah war, the IDF may include Syria on its target list, and the regime’s survival could depend on whether it decides to fight or absorb the punishment. And then there is one other issue Bashar ought to be turning over in his head: Given Damascus’ apparent lack of concern for its Lebanese allies, it should entertain the possibility that Tehran regards his regime in the same fashion. Syria is an Iranian ally, not a vital interest and as such is expendable given the right circumstances.

Iran: Winner
Since the Bush administration never mustered a clear definition of its post-9/11 war, it missed the bigger picture taking shape since 1979. Sure, Tehran has been a major state sponsor of Islamic terror for a quarter century, but it is also playing old-time power politics, and the goal is what Washington feared the Soviets wanted in the Cold War—to drive the US out of the Persian Gulf. To achieve that, the Islamic Republic is pushing for a nuclear program that would fortify its position in the Gulf, if not make it unassailable.
Washington is wondering if it should engage Iran, while Tehran believes there is nothing to discuss, except the US’ terms of surrender. Given the regime’s various centers of power—the president, the supreme leader, the revolutionary guard—it is hard to know whether or not the Islamic Republic is fundamentally rational or stark-raving mad. Here’s a hint: when Mahmoud Ahmadinejad expresses his desire for a world without Zionism, he is saying he does not know the red-lines of a Jewish state created three years after the Holocaust, or does not care. It is a rational regime insofar as it follows the messianic logic of a Mahdi who will redeem the world through blood.

Iraq: Loser
First the good news from the land of the two rivers: Zarqawi is still dead. The bad news is that his replacement is staying on message—kill the Shia. You know it’s bad when American policymakers in the so-called “Realist” camp argue that Iraq’s neighbors have an interest in stabilizing the country. If Iran and Syria wanted calm and tranquility in Iraq, then they wouldn’t be promoting chaos there. If the US believes it can show its enemies where their true interests really lie, then they are not doing diplomacy but missionary work. The standard Realist take, historically favored by the State Department and CIA, is to find a strong man. Iraq has no shortage of hard men, but the strongest one is likely to be hanged in the next year for crimes against his own people. The next strongest is Moqtada al-Sadr, who has opposed the US every step of the way and aligned himself with Tehran, Damascus and Hizbullah. Former Prime Minister Iyad Allawi might be back in the picture—if the US does draw down troops, this might present a way to hand Iraq to Tehran with some qualifications, and not outright, which is what a triumphant Mahdi army means. The good news is that the Kurdish region is in good shape. The problem, however, is that as the rest of Iraq deteriorates, the Kurds will be more tempted to abandon the project altogether and opt for an independent Kurdish state, regardless of how much that puts them at odds with Turkey.

Saudi Arabia: Loser
A rising Iran has led to a strange year for Riyadh. The kingdom is finished talking to the Syrians, who weren’t listening anyway, and now even the American who is perhaps closest to the House of Saud seems to be ignoring the ruling family. Former Secretary of State James Baker wants to talk to Syria and Iran. What do the Saudis think about that? It is easier to guess what they said when they allegedly met with Israeli officials: Crush Hizbullah. Perhaps that Jewish-Muslim comity shouldn’t seem that odd, given that there is actually a Quranic precedent for such an alliance, and according to the Sunnis the Shia have no status as “people of the book.” Obviously, the kingdom’s major concern is whether or not the US intends to do something about that large and cocky Shia, Persian power in the Gulf. And if the US or Israel does go after Iran’s nuclear program, what effect might that have on Shia populations throughout the Gulf, especially Bahrain and Kuwait, and of course Saudi Arabia’s own Shia minority in the oil-rich eastern province? On the upside, the Saudis seem to have gotten their domestic jihadi problem in hand, partly, according to US intelligence sources, through better police work, and partly the old-fashioned way—by sending troublemakers abroad, to Iraq.
Qatar: Winner
Doha put its money where Aljazeera’s mouth is and showed it was much more than just another glossy Gulf sheikhdom. Holding a seat on the UN Security Council until the end of next year, the Al Thani clan tried their hand at diplomacy and reached out to the Palestinians and Damascus. While nothing came of it, Qatar managed to project more power than the size of its population or economy seems to warrant and in the process annoyed several Arab rivals, especially Saudi Arabia. What looked merely like a Dubai knockoff is poised to become a Gulf spoiler: Qatar is the new Syria.

Israel: Loser
In the first week of January, a stroke left then-Prime Minister Ariel Sharon in a coma, and the year never got any better. Ehud Olmert inherited control of the ideologically incoherent Kadima party as well as two major problems, one that his predecessor had set in motion, and another that Sharon had ignored: disengagement in Gaza, and Hizbullah in the north. Thus there was fighting on two pre-’67 borders and Israelis across the ideological spectrum agreed that both wars were just, given that they were started from territories Israel no longer occupied. However, when a cabinet with thin military and security credentials showed they were incapable of drawing conclusive victories against either Arab resistance front, the nation turned on its leadership. Olmert, whose history of alleged corruption has come to the fore, is especially vulnerable given Likud’s surge in the polls as Bibi Netanyahu waits in the wings. While Iran threatens, Hizbullah re-arms, Syria preens and a cast of Arab ideologues boast of defeating the Jewish state once and for all, Israel is quietly assimilating the lessons of the past year. That the Jewish state is anxious to re-establish its deterrence might be disquieting news for everyone in the region.

Palestinians: Loser
In trying to save face after the disastrous elections that brought Hamas to power, the Bush administration explained that the Palestinians had really voted against a corrupt Fatah leadership. No doubt the keepers of Arafat’s flame are inept when they are not criminal, but the Palestinians did not elect a reform ticket. At the very least, “good government” means not seeking war against the largest economy and most powerful military in the region, but this electorate opted not for liberals or technocrats, but rather the outfit they think has the best chance of winning such a war. In response, Washington cut off aid to make the Palestinians accountable for their democratic choice. The exercise was pointless given that, one, the strategic goal was to hand the reins back to weakling President Mahmoud Abbas; and, two, PA officials smuggled in millions of dollars earmarked for arms. And so this year at least, the Palestinians and their leaders made it clear they prefer guns to butter, never mind a negotiated settlement. The peace process, effectively over since 2000, has become a parody of itself, a way for the Europeans to puff their chest, and a file for the Iranians and Saudis to fight over. Still, it could be worse—and will be if Hamas and Fatah wage war in earnest.

Egypt: Even
The Bush administration’s stalled democratization program was meant to give Arabs a voice in their own government, but Egypt represents a conundrum: is it an index of Washington’s failure or success that there is still a huge gap between the masses of ordinary Egyptians and the few who rule them? For instance, the opposition group Kifaya launched a petition demanding an end to the peace treaty with Israel and hoped to get a million signatures. That treaty is one of the US’s singular accomplishments in the Middle East and its annulment one of Washington’s recurrent nightmares. And so the White House will almost surely bless Cairo’s most important, perhaps only, strategic goal—to pass the regime on to Mubarak’s second son. The State Department likes the ostensibly reform-minded and US-friendly Gamal, which might be a problem. Not only is the future rayess lacking security and military experience, he has none of the organic, populist roots this regime has cultivated since Nasser’s 1952 coup d’état. That is, the “Westernized” Gamal has all the drawbacks of an Arab liberal, without any obviously liberal inclinations. Even if the succession comes off smoothly, in several years the most populous Arab nation of almost 80 million will likely become the region’s most daunting concern.

Jordan: Even
The Shia crescent that King Abdullah II warned of two years ago has come to fruition and a government that he never could have imagined has come to power next door in the West Bank and Gaza. Still, predictions of the Hashemites’ imminent loss of influence are one of the few constants in the region’s political climate, and the fact is that relative to the tenure of his father and great-grandfather, Abdullah is on much surer ground. What may complicate the kingdom’s future is if a Jordanian solution becomes the key to a Palestinian-Israeli settlement, as many observers—Arab, Israeli and American—are now suggesting. In the meantime, “Jordan First” is still the operative principle as construction continues apace in West Amman, which war in Iraq has paved with gold and primed as a less glamorous Beirut, an option that will turn more profitable should Lebanon succumb to its furies.

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AnalysisAnalysisAnalysisFinanceFinanceFinance & Economy

Betting on Lebanon: The high stakes game of bonds, stocks, real estate, and bank rates

by Sherine Najdi
written by Sherine Najdi

Lebanon is at a defining moment—a fragile economy teetering between recovery and collapse. “People are hopeful now, but the problem is, people are poor,” says Khalid Zeidan, founder and chairman/general manager at Capital EE, a regional financial advisory firm based in Beirut. “Five years of draining wealth, followed by war, have left individuals and businesses in survival mode,” he says.

Lebanon was once a destination for financial opportunities and investments in the Middle East. On the one hand, it now finds itself in a state of confusion, where speculation runs rampant, markets remain volatile, and the fate of investment depends on urgent and decisive action. On the other hand, resolution of the country’s crisis presents a once-in-a-generation chance. “There is an important opportunity that we need to grasp,” says Marwan Barakat, chief economist at Bank Audi. “Lebanon is operating far below its full economic potential, but with recent political stability, it has a chance to change that,” he adds.

Lebanon’s over many years untapped potential for economic growth has after the January 9 election of President Joseph Aoun been captured in measurable market responses, specifically in increases of demand for Eurobonds, for the Lebanese currency, and for listed equities at the Beirut Stock Exchange (BSE).  However, experts warn of unqualified optimism. Nassib Ghobril, chief economist at Byblos Bank, cautions that “Without structural reforms and a clear financial roadmap, any recovery will be fragile and unsustainable.”

Bank economists tell Executive that Lebanese Eurobonds – which crashed after the March 2020 default on a payment and have languished at a fraction of their nominal value – have risen in the secondary market from 00.6 to about 0.16 in late January. Shares of The Lebanese Company for Development and Reconstruction of Beirut Central District – better known by its French acronym Solidere – have been noted in the 109-110 range on mid-day of January 31, 2025, up from $90 on November 27, the first day after agreeing on a ceasefire with Israel. 

The obstacle course to recovery

As Eurobonds rally despite uncertain restructuring, Solidere stocks reach new heights, and real estate fluctuates between revival and instability, investors are eyeing Lebanon with a mix of optimism and caution. The rise in these securities presents an illusion of recovery, unsupported by current data. The country’s financial dynamics are shifting rapidly, but beneath the surface lies an inescapable reality: without sustainable reforms, any recovery may be fleeting. Lebanon’s postwar economy and new opportunity to form a government may indicate the start of a new era for the country, but a look into the dynamics of the main drivers of speculation and mania of false optimism needed. 

Economic fundamentals of the Lebanese economy and especially public sector performance and political economy are far from cheerful. The loss of over $72 billion accrued by Lebanon’s financial sector since 2019 has led to continued withdrawal restrictions for depositors, many of whom are only able to access limited amounts of their own funds. In the public sector, the continued human resource crisis means that many public services are either unavailable or significantly delayed, while public employees are underpaid in Lebanese lira.  

Lebanon’s depressed economic activity has, of course, been compounded by geopolitical turmoil following October 7, 2023, and the beginning of a mass displacement surge as a result of the Israeli aggression against the Lebanese southern border, which escalated into open war in September 2024. Over 14 months of conflict—that continued to a lesser extent beyond the November 26th, 2024, ceasefire—disrupted most industries to varying degrees, with the agro-food and tourism industries being some of the hardest hit. 

The 2024 Investment Climate Statement on Lebanon released by the US State Department in April 2024—notably before the war’s most significant escalation period—notes that prior to these hostilities, Lebanon’s real GDP was expected to grow modestly by 0.2 percent in 2023, after previous contractions of 0.6 percent in 2022 and 7 percent in 2021. However, it noted that due to ongoing conflicts, GDP was projected to decline further by 0.6-0.9 percent in 2024. Lebanon’s economic downturn deepened in 2024, with the World Bank’s Fall 2024 Lebanon Economic Monitor estimating a 6.6 percent GDP contraction in 2024, bringing the cumulative decline since 2019 to over 38 percent. This contraction has been driven by mass displacement, destruction of infrastructure, and a severe decline in private consumption. The economic losses equate to approximately $4.2 billion USD in lost consumption and net exports since the beginning of the attack on Oct 7, 2023significantly affecting household spending and business investment. Before the conflict intensified in mid-September 2024, Lebanon’s economy was expected to grow modestly by 0.9 percent, but those projections have since reversed according 2024 Investment Climate Statement.

Furthermore, The International Monetary Fund (IMF) and the Lebanese government reached a staff-level agreement in April 2022 for a loan of $3 billion USD across four years, contingent on the government implementing eight key yet controversial reforms. However, as of April 2024, Lebanon had only made limited progress on these reform-related actions, delaying any potential financial assistance from the IMF. This was due in part to two years of political paralysis and the government’s caretaker status, which has only begun to change in January 2025 with the election of President Joseph Aoun and the appointment of Prime Minister Nawaf Salam. With these vacant seats now filled and hopes high for the formation of a government, there has been a rise in morale within the Lebanese community. The country benefits from a highly educated workforce, a historically strong though volatile tourism sector, and a large diaspora that continues to send remittances back to Lebanon, offering a potential foundation for renewed investment if political and economic conditions improve. This was observed as the country witnessed an influx of diasporic flow into the market in the recent holiday season as a result of the ceasefire agreement.

Jean-Christophe Carret, the World Bank’s Middle East Country Director, emphasized the urgency of implementing reforms and targeted investments, stating, “The conflict has inflicted yet another major shock to Lebanon’s economy, already in a severe crisis. It is a stark reminder of the urgent need for comprehensive reforms and targeted investments to avoid further delays in addressing long-standing development priorities.”

Reading the coffee grinds of Lebanon’s fiscal future

The Lebanese pound’s exchange rate stability, maintained since August 2023, has relied on increased revenue collection and fiscal restraint, but this approach remains fragile. The World Bank warns that without structural reforms, Lebanon risks exhausting its foreign reserves or further increasing its money supply, which would undermine economic stability and intensify inflationary pressures. Damages from the conflict are estimated to exceed half the country’s GDP, leading to economic stagnation and pressure across most sectors. However, the realization of a ceasefire, combined with the fall of the Syrian regime and promising presidential elections, has ignited cautious optimism.

Lebanon’s monetary data for 2024 offered a glimmer of hope: a real balance of payments surplus of $1.6 billion by October. This was largely driven by an increase in the central bank’s net foreign assets, which grew by $7.38 billion, held by rising gold values. Despite these gains, the banking sector remains fragile, with fresh liquidity continuing its post-crisis decline. 

Lebanon’s Eurobond market witnessed a dramatic turnaround in 2024. Prices jumped from 6 cents per dollar in late 2023 to 12.75–13.65 cents by the end of 2024 and further climbed to 17–17.80 cents by early 2025. This rebound reflects growing investor bets on political stability and future debt restructuring. However, Barakat states that this hike is not expected to cross a ceiling of 25 cents value, an assumed ceiling that has been diagnosed by recent international investment banks and advisory firms.

Ghobril remains cautious. “This price surge is largely speculative, driven by hopes of short-term profits rather than concrete reforms,” he notes. Institutional investors see a potential recovery value of 25 cents on the dollar but achieving this will depend on political and economic developments.

The Lebanese government faces the pressing challenge of addressing its $90 billion sovereign debt while balancing economic revival efforts. The probability of a full-scale debt restructuring remains high, and international institutions like the IMF have stressed the need for comprehensive fiscal reforms before any assistance can be provided.

Moreover, the Beirut Stock Exchange (BSE) continued its upward momentum in 2024, posting a 24.7 percent gain for the year. Solidere stocks dominated, crossing $120 per share for the first time in history. This surge reflects their role as a haven for depositors looking to escape banking sector uncertainty.  Solidere’s shares now account for over 92 percent of market activity.

“The rise in Solidere prices is not driven by fundamentals,” Ghobril explains. “Instead, it’s a result of depositors reallocating their funds from banks to Solidere shares using checks.” Despite its allure, the company reported losses of $32 million in 2023, underscoring the speculative nature of its current valuation.

This highlights a broader problem—an overreliance on speculative investment rather than genuine economic growth. With limited confidence in banking institutions, capital is being funneled into a narrow segment of the stock market, raising concerns over potential volatility in the coming months. 

One of the most significant developments in Lebanon’s financial landscape in 2024 has been the sharp rise in interbank rates. As liquidity tightened and banks sought to stabilize their financial positions, they were forced to increase interest rates on Lebanese lira (LBP) deposits. This move was not necessarily aimed at attracting long-term savings but rather as a mechanism to access funds at a lower cost than alternative financing options. This was mainly driven by the hike in interbank interest rates reaching over 120 percent as stated by Barakat.

Explainer: Interbank Lending 

Interbank interest rates are the rates at which banks borrow and lend money to each other. These rates are important because they help banks manage their money and keep their operations running smoothly. They also affect the interest rates that regular people and businesses pay on loans.

At times, certain banks, while perfectly healthy, face shortages of liquidity – money – to meet their daily needs, while other banks have extra money. To solve this, banks lend money to each other in the interbank market. The cost of borrowing this money is reflected in the interbank interest rate. This rate depends on how much money is available, central bank policies, and the overall economy. Central banks, like Lebanon’s Banque du Liban, can raise or lower these rates to make borrowing easier or harder.

Interbank rates were created to help banks share money and keep the financial system stable. They make sure banks have the money they need, even during tough times. These rates also serve as guides for setting the interest rates on loans and savings accounts for individuals and businesses.In Lebanon, where these rates play a critical role, banks depend heavily on deposits from people living abroad. Despite the high interbank interest rates resulting from the financial and banking crisis that erupted in 2019, interbank rates in Lebanon are still used as indicators of how much money is available and how risky the banking system is. These rates also help determine the cost of loans and savings, though adjustments are made to account for the country’s high inflation and currency issue.

Barakat explains, “The interbank market witnessed increasing strain, leading banks to aggressively raise deposit interest rates to source liquidity. This allowed them to use the funds to meet their financial obligations at a lower cost compared to external borrowing.” This strategy helped banks manage their short-term obligations but also introduced additional volatility into the financial system.

Furthermore, the monetary policies of Lebanon’s central bank played a crucial role in limiting excessive liquidity in circulation, which, combined with higher deposit rates, led to a temporary stabilization of the LBP exchange rate. However, financial analysts warn that without meaningful structural reforms, this approach will not provide long-term stability.

Lebanon’s real estate sector paints a mixed picture. Property sales values fell by 59 percent in 2024, with average property values declining by 74.5 percent. The market has become heavily cash-based, making transactions increasingly inaccessible for many locals. Meanwhile, internal displacement from the war inflated rental prices, especially for furnished apartments, although these have begun to stabilize post-ceasefire.

Beyond economic uncertainty, structural inefficiencies in Lebanon’s real estate market present additional challenges. The lack of clear regulatory frameworks, combined with widespread property speculation, has contributed to price distortions that make housing affordability an ongoing issue. As the country grapples with reconstruction efforts, ensuring a balanced approach to property development will be essential to fostering long-term economic stability.

Stumbling forward

Lebanon’s financial landscape remains fraught with challenges. The rebound in Eurobonds and equities, alongside a stable exchange rate, suggests that investor optimism exists. However, the absence of meaningful reforms and credible governance could derail this momentum. Ghobril sums it up aptly: “The opportunities are there, but they require a cohesive government, targeted recovery plans, and international support to materialize.”

Moving forward, Lebanon’s policymakers will need to prioritize fiscal responsibility, rebuild investor confidence, and enact structural reforms to create a more sustainable economic future. Without decisive action, the country risks continued financial instability, further exacerbating socioeconomic disparities and limiting growth potential.

As Lebanon looks to 2025, its ability to implement structural reforms, attract foreign investment, and restore economic stability will determine whether it capitalizes on this moment of opportunity or succumbs to renewed financial distress. Investors and policymakers alike must remain vigilant, balancing short-term market gains with long-term economic resilience. The next few months will be crucial in determining Lebanon’s financial trajectory—whether it ascends toward recovery or sinks further into economic instability.

Lebanon’s financial recovery remains highly speculative, with market gains masking deeper economic instability. Nassib Ghobril warns that the rise in Eurobond prices and Solidere stocks is largely sentiment-driven rather than reflective of actual economic improvement, emphasizing that without structural reforms, these trends are unsustainable. Marwan Barakat echoes this concern, stating that while there are opportunities for economic stabilization, the lack of reform progress and continued political paralysis have stalled IMF assistance and discouraged foreign investment. He stresses that Lebanon’s financial sector remains burdened by capital controls and mounting debt, despite some positive signals in the markets. Khalid Zeidan adds that the real estate and stock market surges are artificially driven by depositors seeking safe havens for their money rather than real business growth. He warns that unless governance improves and economic reforms are enacted, Lebanon risks deeper financial instability. Collectively, these experts agree that any temporary financial improvements seen in 2024 could be short-lived without meaningful policy changes, leaving Lebanon vulnerable to further economic deterioration.

Ultimately, Lebanon must prove that its financial system can support sustainable growth, attract responsible investment, and provide economic stability to its people. If the necessary political and economic changes are not enacted, the country risks prolonging its crisis and missing a rare opportunity for economic revitalization. Will the newly filled government vacancies be our salvation? This is yet to be seen. 

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Economics & PolicyQ&AQ&A

You have acted as the Lebanese Ambassador to the Untied Nations during very exciting times, when political and economic powers have been shifting worldwide. What can you tell us about the changes you have witnessed?

by Yasser Akkaoui
written by Yasser Akkaoui

There is only one Arab seat on the 15-member United Nations Security Council, which rotates every two years among the 22 Arab countries. That means Lebanon is offered the seat only once every 44 years. It can only be called serendipitous, then, that when the most sweeping change to come to the Arab world in the modern era began in early 2011, Lebanon was in this seat. Nawaf Salam, the permanent representative of Lebanon to the United Nations, sat with Executive in New York to discuss what it was like being privy to, and influential in, the international power plays that took place in constructing the collective global response to these historic times in our region.

They are indeed exciting times. First… it was a big challenge. You may recall the Lebanese political establishment was divided as to whether we should go for the seat in the Security Council or withdraw our candidacy. Not running at the last moment would have sent the worst signal, I think: that we are incapable of making decisions, that we are a failed state. I was supported by President Sleiman and [Fouad] Siniora, who was then Prime Minister, to see this as an opportunity to prove to the world that we are a state that is recovering and rebuilding its foreign policy, and also to project a different image of Lebanon, far from the images of a battle ground or divided country. 

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When the Lebanese aimed for the stars

Two: the exciting times were mainly because of the Arab Spring, and I was on the council when it started in Tunisia and the fall of Egypt. In both cases, the council didn’t interfere but in Libya, the council played a critical role and Lebanon, being the only Arab member in the council, was the most critical country in the council.

[Also], we had to present, as the only Arab country in the council, the Palestinian case for membership in the UN, and so we had to develop the legal and political briefs in defense of Palestinian statehood and the right to be a full member in the UN.

Finally, we had to handle Syria. I think the lessons to be drawn from the handling of Syria are in the disassociation policy we ended up adopting and are important to the future of Lebanese foreign policy. 

You represent a Lebanon, whether on the council or not, that is divided into extremes. How do you manage this equilibrium when it comes to, for example, the ousting of former Libyan leader Colonel Muammar al-Qadhafi?

Qadhafi was easy for the world, easy for the Arabs and easy for Lebanon. Syria was much more difficult. Yemen was not very easy. Qadhafi was easy because he managed to antagonize everyone: the Americans, the French, the Russians were not very happy. He also isolated himself in the Arab world to the point where it was really easy… for the Arab League to decide to suspend Libya’s membership. 

Domestically, the unity against Qadhafi was easy, despite of his Arab alliances… because of the Musa Sadr affair. Libya is actually a good example because it shows you that when you have a united domestic front, your margin to maneuver becomes significant and we were really able to play a leading role on the Security Council and in the Arab group because I had the clear support back home.

On other issues, yes Lebanon is divided, but we are not an exception as many countries are divided — Belgium, Bosnia… we are not a unique situation. However, because the situation was so polarized in Lebanon, we had a much more difficult time than others, but the general rule is the following: despite the outcome of unity you see in positions of any state, foreign policy is the result of two processes, domestic negotiations and international negotiations. 

Within each and every state there are different domestic players with different interests who seek to influence the decision of their country… for example, [with regard to] Iran, where Lebanon was divided, I voted for abstention, though Lebanon was divided on that and we were not alone in abstaining… our main agenda is to protect the interest of our country, to preserve our national unity and stability… These are the most important factors for us and there is no shame in that. Lebanese are not used to thinking like that. We always think of the interests of other countries, but the unity of this country is the most important.

How difficult was taking a stand in Egypt compared to Libya and Tunis?

We did not have to take a position in the council regarding Egypt as it never reached the council since it ended in 18 days and [President Hosni] Mubarak fell.

Libya was hard in several places. It was the first time that the responsibility to protect involved the use of force. [Qadhafi] was heading to Benghazi so how do you stop him? The use of force was authorized [by] all members. The Russians and Chinese [abstained]. What turned it into an operation was that NATO took the lead. In the referral to the International Criminal Court, we were seeking to influence Qadhafi’s entourage more than Qadhafi himself. But here we had Qadhafi and his son Saif who said they will show “rivers of blood”. It was not a hypothetical issue and the end game is known on his part. 

The reaction of the international community after the assassination of [Lebanese security chief] Wissam el-Hassan seemed to show a determination to preserve the then government and that it is not our turn for change, until Syria’s situation is over. Are there winds of change coming toward Lebanon?

There are winds of change blowing in the region. They are good winds because they shook the stagnation that has been there for so long. But what really has changed between before [former Tunisian President Zine El Abidine] Ben Ali and Mubarak and after Ben Ali and Mubarak? Under them, it was more of the same and there was no perspective whatsoever, nothing was possible. Now everything has become possible, post Mubarak and Ben Ali. These transitions are going to see ups and downs, of course, but you now have real empowerment of the people and this is irreversible: the genie and people are out of the bottle. They may not get it right from the beginning or consistently but there is a mechanism that will auto-correct. 

You witnessed the Palestinian quest to become a member country in the United Nations and the powers within the U.N. for and against. What are the lessons learned?

It’s true that I followed the bid for statehood from day one. I spent hours with them and they are both unprepared and facing a tough lobby. But, big scale, it shows that though slowly and in an incremental way the question of Palestinian statehood and its recognition, and ultimately its membership in the UN, has been put on the right track and it is very difficult to stop. 

Even though it is a state under occupation, it is still recognized as a state. They have all the requirements of a statehood: people, territories, government… the problem is that it is a state under occupation but that does not undermine its statehood but places a burden on the international community to end its occupation and grant it a full membership in the UN.

I think that the elements of a final solution are known, whether what to do with the settlements (two percent [of built-up area]) or frontiers (the 1967 borders, plus or minus). Jerusalem will remain united but the capital for two states and with a sort of internalization of the Holy Land. 

There is more than one formula to address the refugees and the right of return to Palestine… what is missing are two things: the right package of frontier and security and international guarantees to the two parties. The only player that can do this is the American administration; they have to show leadership. They need an end-game package deal approach. Step-by-step confidence building will take us nowhere today. 

Putting the parties on the same table and getting them to talk will lead to nothing as they have been talking since Madrid, for 20 years, and yet nothing has really happened to close the deal… Without the [United States], this will not be achieved and yet the US, left to its own devices, will not do it. So here you need the European community and you need greater Arab involvement [to pressure the US]. I really believe in this. 

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