IMF 2025 outlook: Critical junctures of uncertainty and risks

by Thomas Schellen May 16, 2025

written by Thomas Schellen

The IMF is the primary publisher of brainy perspectives on the economies of countries, regions, and the world. The latest series of IMF assessments of the global economy –namely The World Economic Outlook (WEO) and the Global Financial Stability Report(GFSR), both of April/May 2025 – open with the acknowledgment that “policyuncertainty” is testing “global resilience” (WEO). It notes that several fragilities, albeit already observed last year, “could amplify adverse shocks, abruptly tightening financial conditions” (GFSR).

Customarily, the first WEO chapter, under the standard title of Global Prospects andPolicies, puts emphasis on basic advice to all 188 member countries. This year, the recommendations and their indented main target audiences are not very new, but in global context, stinging. This WEO advice of April 2025 can be subsumed under the message that there is “a rise in uncertainty that is once again testing the resilience of the global economy” and that, therefore, the “global economy is at a critical juncture.” Further advices and detailed observations in the World Economic Outlook include positions on well-defined up-and-coming geoeconomic “prospects”, which zoom in on new challenges such as the management of the AI shock and associated high increases in electricity needs of developed economies, or the particularities of the advanced-age (“silver”) economy and the global migrant economy.

In its comments on rising uncertainty, the IMF specifically mentions the big MAGA- related surprise of a resetting of the global trade system by major policy shifts, pointing first to the new tariff regime announced by the United States. The WEO seeks to mentally counter this unexpected backward turn in development of the global real economy by emphasizing the values of active trade, global productivity gains, and central bank independence as anchor points of the global system. Having stood as core enabler and guardian of the world’s legacy economic system of the past 80 years, the IMF leadership predictably warns of economic downside ramifications of hampering with these parameters.

When it comes to this year’s regional outlook for what is arguably the world’s least stable geopolitical region between Kazakhstan and Mauritania, which includes Lebanon, the picture is both unwieldy and mostly discouraging. Assessments include 32 countries in the Middle East, North Africa, Caucasus and Central Asia, (MENA-CCA) which are regionally and analytically grouped into numerous sub-strata that overall betray more divergences than commonalities between all 32 countries and even between countries in the same sub-stratum, e.g. non-GCC oil exporting states Algeria, Iran, Iraq and Libya.

For this overlarge and unequal region, the message of uncertainty is even more upfront and ominous than for the world as a whole: a “spike in global economic uncertainty in the first months of 2025 is starting to affect the economies of the Middle East and North Africa (MENA) and Caucasus and Central Asia (CCA)”, the IMF regional economic outlook for MENA and CCA says, confessing that in comparison to its views from only six months ago, “expectations of weaker growth and wider economic imbalances than foreseen at the time of the October 2024,” due to, among other factors, “a slower-than- anticipated resolution of conflicts in the region”.

In terms of numerical GDP development, the data table for the MENA countries shows2.6 and 3.4 percent growth projections in 2025 and 2026, which represent downside revisions of 1.4 and 0.8 percentage points from last October. For the sub-group of emerging market, middle-income, oil importing MENA (theoretically meaning Egypt, Jordan, Morocco, Tunisia, Palestine and Lebanon but de-facto projecting only data for the first four countries), the downside revisions since last October are 20 and 50 basis points to new projections of 3.6 percent growth in 2025 and 4.0 percent in 2026.

A contraction of 50 basis points in projected GDP growth for the sub-region may not sound huge but it has to be recognized that this estimate would not include Lebanon, nor the Palestinian territories of West Bank and Gaza, for which the IMF wisely abstains from speculating on GDP development numbers over the coming years. As the statistical appendix to the WEO notes, data shown for Lebanon since 2022 are staff estimates and “estimates and projections for 2025–30 are omitted owing to an unusually high degree of uncertainty.” While consisting of data uncertainty a tiny nutshell, this seems to be the most pertinent information that the World Economic Outlook offers on Lebanon.

The press conferences at the spring meeting in Washington and the regional meeting in Dubai were no more committal on the peace building needs and grievances of Middle Eastern Arabs than the shocked statements at the Marrakesh World Bank Group’s meeting in October 2023. References to economic downside potentials of conflict risk in MENA and CCA countries made by IMF representatives when discussing the 2025 regional outlook in Dubai at the beginning of May, although not emphasized in blunt words, outweighed tangible recommendations for countries in the region’s conflict areas and specific new insights on solutions for conflict-hit economies.

When one searches what else the Regional Outlook has to say about Lebanon, one finds a similar number of mentions as for Egypt (28 versus 31), of which about half are in tables and footnotes. Perhaps ironically, a particular mention of past IMF engagement with the country’s financial sector, is saying that in the post-2006 conflict environment of Lebanon, “the IMF provided capacity development to improve public financial management, assess banking sector soundness, and improve government finance statistics”.

On a side note, while the primary commonality between WEO and Regional Outlook publications is the concept of “uncertainty”, with unpredictable downside risks (elaborating mostly on dangerous impacts of uncertainty but not dedicating much energy to the distinctive definitions of uncertainty versus risk by economist Frank Knight a century ago, or the uncertainty-related theories of John Maynard Keynes), the Regional Outlook features a second chapter that is dedicated to this concept and its economic implications.

The two-pronged adverse impacts of uncertainty on economic behavior, according to the IMF academics, entail increased price volatility and borrowing costs in a (financial) “market channel” and decreased consumption and decreased investment in a “real channel”. When compared with the rest of the world, domestic uncertainty shocks – such as wars and conflicts – in the MENA and CCA regions have “larger and longer- lasting effects on the real economy”.

The chapter draws on data from an index developed in 2022 that according to the IMF is based on “counting the frequency of the word ‘uncertain’ (or the variant) in Economist Intelligence Unit country reports.” Perusing this index’s page on Lebanon, the WUI reveals nothing less (or more) than a record high EIU perception of Lebanese uncertainty in the summer of 1964, as well as smaller spikes in the quarterly EIU report’s usage of the term uncertain or a variant thereof that in descending order of recorded magnitude occurred in 2018 (third quarter), 2013 (first and third quarter), 1967 second quarter), 1987 (second quarter) and 1995 (fourth quarter).

By a derivative gauge, a pedestrian accounting of mentions of “uncertainty” in WEO reports, the rise of uncertainty in the world is indeed severe: while at the, largely by the IMF unforeseen, brink of the Great Recession of 2007-09, the number of mentions in the anecdotally examined Global Prospects and Policy chapters of the WEO was below 20, the 2025 first WEO chapter contains the word 76 times, an increase of around 350 percent from 17 mentions in spring 2007. Uncertainty generally is something that most economists consider as escaping attempts of quantification.

May 16, 2025 0 comments

Lebanon and the IMF

by Executive Editors May 15, 2025

written by Executive Editors

If one happens to be a government, which by global financial concord cannot go bankrupt, states can very well fall into this or that debt trap and run up a debt to GDP ratio that far exceeds the 80 or 100 percent that little more than a decade ago were theorized to be the limit of sound economic health. In such situations, instead of tightening the belt and suffering in poverty, a contemporary government is more likely to take the collections bowl – along with a huge stack of paperwork, statistics, and reform plans – on the road.
Yet instead of presenting cases to international investors (like a friends-of-Lebanon bash, private equity fundraiser, or public-private partnership roadshow) at a self-organized or just any IFI conference, a destitute government in the global capitalist age under Western hegemony will migrate to a meeting such as the annual spring meeting of the International Monetary Fund (IMF) in Washington DC. Before that, one requests a visit from an IMF team with a relatively small purse and a very large appetite for numbers and painful commitments.

The regional landscape

The interactions between the IMF and the Arab region since the 1990s were not the largest and not the most successful. One stalwart Middle Eastern ally of US policy making, Jordan, entered its first of 11 IMF agreements to date in 1989. By the 2000s, according to scholar Julie Miller, 15 years of the IMF-recommended structural adjustment programs have “done little to boost the overall economy, and actually made the lives of the poorest people worse”.

From a geopolitical neighborhood perspective, Egypt offers a frequently cited recent case of how the IMF operates in the 2020s. According to an IMF press release from March 2024, Egypt signed a 46-month Extended Fund Facility (EFF) agreement with the IMF in 2022 worth $3 billion. The program, augmented to $8 billion in March 2024, was aimed at addressing Egypt’s chronic fiscal deficits, managing inflation, and reducing the state’s outsized role in the economy.
To secure IMF backing, Egypt was required to devalue its currency in order to achieve exchange rate flexibility, cut energy subsidies, and increase interest rates—moves that sparked inflation and pushed many Egyptians into poverty as their purchasing power was greatly reduced.

In late 2024, President Abdel Fattah el-Sisi signaled a possible reevaluation of the IMF
agreement due to mounting social pressures and regional turmoil, highlighting the political volatility that often accompanies IMF reforms. Still, Egypt has been largely praised for adhering to its program. In March 2025, the IMF approved another $1.2 billion disbursement under the EFF, noting “steadfast implementation” of agreed-upon reforms, and consumer price inflation that is expected – by the IMF’s reckoning in the spring 2025 regional economic outlook – to recede from estimated over 33 percent to 19.7 percent in 2026.

Mirror of wider concerns

The projection of positive and prosperity generation outcomes of such interaction with the IMF, however, is hairy, not to say highly uncertain. As a Chinese scholar argued in a 2023 comment piece , the allocation for financial relief in connection with Covid-19 was, albeit formally in line with avowed IMF principles, highly unequal in favor of G7 countries versus African economies. Many developing countries have been finding that “the borrowing rules for the IMF and the World Bank have increased their debt burden, and the ‘debt sustainability framework’ used by these two institutions for assessment has also been marked by the hegemonic will of the US.
In Lebanon’s past, increased exposure to the will of hegemonic powers has not really been a
decisive concern. The first harrowing occurrence of unsustainable public debt, during the skyrocketing of the public debt to GDP ratio from around 100 percent in the late 1990s to above 180 percent in the mid 2000s, resulted in the Beirut debates circuit raising the question if
Lebanon was in danger to become “another Argentina”, mirroring that country’s dependency on the IMF.

The specter of an IMG agreement had at the time been held at bay as the chosen Lebanese
path to finance remained issuance of debt instruments such as Eurobonds and treasury-bills, and roll-over of more and more such “paper”. But – as the meltdown of the Lebanese economy in 2020 demonstrated – the hammer of indebtedness continued to hang on an invisible thread over Lebanon throughout the following two decades of unresolved, rolled-over, and at the end escalating public debt.

This notwithstanding, the fate of Argentina, a comparatively wealthy country in the middle of the last century but since, and for decades, tumbling from one crisis and episode of currency meltdown to the next moment of popular unrest and painful austerity, is one that no local IMF agreement considerations can dismiss off hand.

Argentina: cautionary tale of chronic borrowing

Argentina is the country with the largest exposure to IMF deals, coming to a total of now
nominally $177 billion over an ongoing history of 23 IMF agreements. The often controversial
story of Argentina’s indebtedness with the fund spans 67 of its 69 years of IMF membership and programs that commenced with a $75 million program in 1958. Its latest incarnation is a $20 billion agreement with the government of President Javier Gerardo Milei, an economically
IMF-affine and US-administration-cheering libertarian.

The story has many chapters, with the $20 billion latest deal by far not the biggest and most controversial. To many, it is a cautionary tale of insight into how IMF programs operate in complex environments. In one incident with perhaps exemplary political connotations from 2018, the Argentinian economy was flailing under the policies of then-President Mauricio Macri, elected in 2015.

At the time, according to a video published by rightwing news site Infobae in July 2020, Mauricio Calver-Carone, former IMF Executive Director and senior advisor to US President Trump, claimed the US president pushed for an IMF deal to help Macri’s reelection with the hope that the unpopular Argentinian leader would side with the US on its Venezuela policies. It was consequent to Mr. Trump’s push, Calver-Carone claims, that Argentina received its most substantial IMF loan of $57 billion.

The program aimed to stabilize the economy, reduce inflation, and rebuild investor confidence.
However, economic conditions worsened due to internal challenges and external shocks.
Inflation remained high, public debt increased, and social unrest grew in response to austerity
measures, to a degree such a heightened degree that the IMF has become widely unpopular in the country. For many Argentinians, the IMF cure is perceived as far worse than the economic disease.

In 2022, a year in which inflation rates averaged at 74 percent according to data from Focus
Economics, Argentina renegotiated the terms of its agreement with the IMF to ease repayment conditions and modify some of the required reforms. This case highlights the importance of tailoring IMF programs to a country’s political and economic realities. It also shows the potential consequences when reforms outpace a government’s capacity to implement them or fail to account for public resistance.

On April 8, 2025, just in time for reaping fruits of the Argentinian administration’s strategic and
ideological alignment with both the IMF and the US government of President Donald Trump,
Argentina reached a staff-level agreement for a 48-month EFF of $20 billion.

May 15, 2025 0 comments

Economy Finance Uncategorized

Lebanon and the IMF

by Executive Editors May 14, 2025

written by Executive Editors

The Lebanese journey of, and into, uncertainty is continuing, for the fifth consecutive year – and the nth time in the century-long history of this republic. Albeit under new management, the state remains stuck between a mountain of debt, a sea of social and economic inequalities, and a black hole in place of once efficient (more or less) institutions. No local or global stakeholder disagrees on the baseline: the country urgently needs tangible trust and solidarity – in form of investments and loans – as much as extreme determination to have a chance of escaping this maelstrom.

Thus in spring 2025, the Lebanese search for a sustainable path leads once again to the doors of potent investors, wealthy expatriates, friends, and international financial institutions (IFIs). But in contrast to the struggle for independence or the post-conflict landscape of 1992, the path this time appears to inescapably meander through a bureaucratic financing archipelago with a map owned by a “long John Silver” that acts as gatekeeper of any international trust: the International Monetary Fund.

Going to the IMF is neither unusual for vulnerable, productivity-impaired economies, nor for politically fragile or threatened states (Lebanon is all of that). To the contrary, venturing on a begging pilgrimage to Washington has become the default governmental journey for the poorer states of the world. The decades-long travelogue of visits by IMF negotiation teams to dysfunctional economies and battered states reads like the Who’s Who of the (geographically imprecise) “global south” from Afghanistan to Sri Lanka and Suriname to Zambia.

Among IMF program recipients, the outstanding debt numbers reveal the long dependency of countries with financial and governance deficits and the gap between developed and impoverished world. The 46 countries with the heaviest recurring use of IMF programs, according to a list compiled in the mid-2010s by Cuban-American economist Carmen Reinhart, who from 2020 for two years served as World Bank chief economist, fit two descriptions. First, they show lengthy spells (lasting from 12 to 29 years) in uninterrupted exposure to programs.

Secondly, they are overwhelmingly, with the exception of South Korea, comprised of countries in the global south and post-communist Eastern Europe.

By the IMF’s latest list of its debtors with outstanding credit at the May 2, 2025, 97 countries are in the hole for a collective 117.9 billion Special Drawing Rights (SDR), the – albeit imperfect – foreign currency reserve assets that the IMF allocates. The US dollar equivalent of these 117.9 billion SDR is $163.4 billion. Total SDR disbursements within the month of April were 9.25 billion SDR to Argentina (9.1 billion) and Mali; total repayments amounted to, by comparison to total outstanding credit, a paltry 1.8 billion SDR from altogether 37 debtors over the one-month period.

The overwhelming majority of countries with outstanding IMF credit are so-called emerging and frontier economies in the global south and central Asia, apart from Ukraine and the handful of European borrowers from the disadvantaged south-east. Given this borrower profile, it is hard to read IMF credit data as anything other than the ledger of a low-cost but stricture-happy and by definition unforgiving lender to the distressed.

All this reinforces the notion that in the contemporary arts of begging and borrowing, one does not sit with a flower bucket on a highway ramp, solicit marginal donations from shop to shop, or offer washing car windows to unwilling motorists at congested urban stop lights. When poor, one has no alternative but harass the IMF. If one is a state, that is.

Nuances and names do change but baselines stay The IMF was established in 1944 at the United Nations Monetary and Financial Conference in Bretton Woods, USA —a major international meeting where delegates from 44 allied nations came together to plan the post-World War II economic system. The headline influencers at the conference were Harry Dexter White, a US treasury official, and John Maynard Keynes, the British economist.

The original system, in hindsight usually called Bretton Woods 1, was tailored to perfectly serve the interests of the Atlantic Alliance of Western powers. Under it, the Bretton Woods institutions pursued objectives that included aiding countries in speedy reconstruction from the damages of World War II, with the IMF taking on the mission of promoting open markets and maintaining a hegemonial, pegged foreign exchange rate system that was anchored upon US dominance in ownership of global gold reserves. These IMF targets and tools adopted at the 1994 conference remained stable until Bretton Woods 1 was abruptly dissolved by a US decision to switch from a gold standard to a fiat currency in 1971.

In later years, specifically after the end of the Cold War, the system kept running in a derivative

form under the label of post-Bretton Woods system, Washington Consensus, or Bretton Woods

Wherever the label, the system continued on the hegemonic path of Bretton Woods 1, as

developed countries and specifically the US maintained their dominance over the functionality of the global financial system, and with it the IMF, in a environment of fiat currencies. The IMF’s trend of hegemonic allegiance has been remarkably resilient, despite policy adjustments and some surface diversification (try finding a dissenting opinion or egalitarian proposal in an IMF mission’s concluding statement) in the composition of the fund’s considerable workforce of 3100, many of whom are economists whose alma maters are mainstream US business schools.

Some of the harsher policy dictates of the early IMF, such as myopic focuses on austerity in lending regimes, were adjusted on basis of market experiences. However, debt sustainability, which for many recipient countries might translate into perpetuation of their chains of indenture, was a paradigm that continued to predicate the fund’s behavior.

Pressure for redesign under new global priorities Calls for the reform of the global financial system have increased in the aftermath of multi- country shocks such as the Great Recession of 2007-09 and the Covid-19 recession. From the Great Recession until the time of this writing, academic, activist, and political critics have been urging for creation of a system to replace Bretton Woods 2 and radically reform its institutions.

Many of the latest arguments for such a step, such as the reasoning for a new trade paradigm and monetary regulative, date back to the controversies at time of the original Bretton Woods negotiations. To its detractors, the global financial system of the past 80 years has failed the mission of improving economic mobility of nations. The powerful and rich countries got only more powerful and richer, as critics of the IMF and hegemonic developed/Western powers have been lamenting vigorously since at least 1982.

At various times, civic or even violent protests erupted over issues from alleged IMF violations of democratic and sovereign principles to willful harming of environmental and social sustainability. In the 21st century to date, the global poverty trap and what is euphemistically called the middle-income trap have become less, not more escapable. While there were timely adjustments and additions to the IMF analysis of problems and catalog of proposed solutions – climate and environmental, social, and governance (ESG) priorities probably being the leading ones – the IMF in the view of many scholars has remained most useful for the continuation of the prevailing geopolitical, financial, and economic dichotomies after the end of the cold war.

Despite all ethical criticism and more recent debates on the current system’s exhaustion (up to the point of the 2025 US administration’s musings about withdrawal from their global role of the last 80 years), the IMF presently comprises 191 member countries and powerfully wields a set of tools that include financial support, surveillance, and technical assistance. Its core mandate is to ensure the stability of the international monetary system. It achieves this by monitoring member economies, providing temporary financial assistance to countries in crisis, and offering policy advice and training aimed at strengthening economic management.

May 14, 2025 0 comments

Explainer Municipalities of Lebanon

Municipalities in Lebanon: Understanding their history, structure, and function

by Sherine Najdi April 30, 2025

written by Sherine Najdi

Municipal governance forms the first link between citizens and the state. In Lebanon, municipalities are key to delivering services like infrastructure maintenance, waste management, urban planning, and local development. With municipal elections scheduled to begin in early May 2025 after years of delay, attention is turning to how local governments function and the reforms needed to enhance their role. Ahead of municipal elections, a closer look at how municipal governance works (and how it doesn’t) and what voters should expect from their municipalities can give a step up to a more participatory relationship between municipal leaders and citizens.

Municipal governance in Lebanon dates back to the Ottoman Empire but expanded significantly after independence in 1943. The number of municipalities in Lebanon has increased significantly over the last few decades—from just over 700 in the late 1990s to more than 1,000 today—often due to political considerations rather than clear administrative planning. However, many were established to satisfy political demands rather than administrative needs, resulting in significant disparities in capabilities. Many of the municipalities today remain inactive or under-resourced.

Municipal governance is structured by Decree-Law No. 118 of 1977, which grants municipalities administrative and financial autonomy as independent legal entities. Municipalities are responsible for sanitation, public health, infrastructure, zoning, and licensing local construction. Councils are elected every six years and composed of 9 to 24 members depending on the locality’s population size. Despite this legal framework, municipalities are subject to oversight from the Ministry of Interior and Municipalities, which must approve budgets, hiring, and major projects. This supervisory role often limits the autonomy municipalities are meant to enjoy.

Municipal elections in Lebanon use a winner-takes-all majoritarian list system, in which the list receiving the highest votes gains full control of the council seats. While there are no formal sectarian quotas at the local level, outcomes typically reflect Lebanon’s confessional political structure. Municipalities generate revenue from local taxes and fees and receive transfers from the Independent Municipal Fund (IMF). In terms of service provision, municipalities are tasked with waste management, road maintenance, zoning, and basic urban development. Yet, according to a 2022 UNDP and UN-Habitat report on municipalities as enablers of local economic development, many municipalities lack sufficient human resources and technical expertise, limiting their ability to meet these obligations effectively.

Decentralize and unionize: the keys to success?

The issue of administrative centralization is one that comes up whenever there is talk about how to improve municipal governance. Although municipalities possess theoretical autonomy, the Ministry of Interior retains extensive authority over key decisions, influencing local governance dynamics. Centralization also affects responsiveness to local needs. Because municipalities must seek approval for most spending and development initiatives, delays often arise, discouraging proactive policymaking at the local level. The absence of financial predictability also inhibits strategic planning, which is likely to push municipalities to prioritize short-term fixes over more long-term aims, like, for example, projects in line with sustainable development goals.

Municipal elections, initially scheduled for 2022, were delayed due to financial and logistical issues. In April 2024, Parliament extended municipal mandates to May 2025 due to the steadily escalating war between Hezbollah and Israel. Efforts to promote decentralization include proposals to transfer more tax authority to municipalities, to allow them to create local revenue streams, and to establish administrative courts to manage disputes at the local level. Decentralization is seen not only as a way to strengthen service delivery but also as a mechanism to reduce clientelism by anchoring governance closer to citizens.

Proposals for electoral reform, including proportional representation and gender quotas, seek to enhance representativeness and correct imbalances, particularly given that, according to a UNDP report, “Women in Municipal Elections 2016 – Key Results”, women constituted only 5 percent of elected municipal officials in the 2016 cycle despite comprising over half the electorate.

Municipalities across Lebanon differ markedly in their administrative capacity, financial resources, and political leverage. Larger municipalities, such as Beirut and Tripoli, benefit from more substantial tax bases and donor engagement, allowing them to support broader service delivery functions. In contrast, smaller and rural municipalities often operate with limited staff, modest budgets, and basic infrastructure. In some cases, municipalities form municipal unions, athadat el baladiyet in Arabic, to share resources, coordinate service delivery, and undertake projects that would be unfeasible individually. Successful unions have demonstrated that pooling technical expertise, financial resources, and planning capacity can dramatically improve performance. For example, according to the 2022 UNDP – UN-Habitat report, waste management and road rehabilitation projects have been more effectively implemented by unions than by individual municipalities acting alone. Political dynamics also shape municipal performance. Nevertheless, strong local leadership, active civil society engagement, and transparent governance practices often enable municipalities to improve services regardless of their financial position.

What to expect now

The municipal elections scheduled for May 2025 will be staggered by region, beginning with Mount Lebanon on May 4 and concluding with South Lebanon and Nabatiyeh on May 25. After nearly nine years without local elections, the upcoming cycle presents an opportunity to renew democratic practices at the municipal level. Municipal elections also offer a chance to test new political dynamics and strengthen the relationship between citizens and local institutions. Civil society organizations highlight the importance of holding timely, fair, and inclusive elections as a step toward reinforcing local democratic governance and institutional credibility. Beyond the immediate electoral exercise, successful elections could pave the way for broader governance reforms. Transparent, competitive municipal elections can encourage local governments to become more accountable, citizen-responsive, and development-oriented in the medium term.

Municipalities play a central role in Lebanon’s governance landscape, providing services closest to citizens and fostering local development. Strengthening their performance requires a combination of timely elections, administrative reforms, and genuine decentralization. The 2025 municipal elections, supported by independent election observation, present an opportunity to revitalize local governance structures and reinforce public confidence in democratic processes. Over the longer term, ensuring municipalities have both the autonomy and the capacity to fulfill their mandates will be essential for building a more resilient, inclusive, and effective model of governance across Lebanon.

April 30, 2025 0 comments

Business Real estate Real Estate

Rent Liberalization: A New Balance to Be Found in Lebanon

by Walid Moussa April 29, 2025

written by Walid Moussa

The recent publication of the law on the liberalization of non-residential rentals in the Official Gazette marks a crucial turning point in the evolution of Lebanon’s real estate sector. This change goes far beyond a technical adjustment — it sends a strong message in favor of redefining the relationship between landlords and tenants, based on fairness, economic vitality, and social stability.

For decades, the “old rent” regime was based on a 1963 law that froze rents for contracts signed before July 23, 1992, effectively paralyzing the market and depriving many landlords of the full use and value of their properties. The financial crisis and the collapse of the Lebanese Lira only worsened this reality. The new law, passed by parliament in December 2023, aims to correct this imbalance.

Although it took over a year for the law on commercial leases to come into effect, this rent liberalization now gives essential room to maneuver for investors and property owners. It also places responsibility on the state to oversee this transition with fair and effective mechanisms, preventing speculative abuse or negative social consequences.

Two Pillars

The goal is not to favor one group over another, but to establish a new balance, based on two fundamental pillars: the protection of everyone’s rights and the creation of an investment-friendly environment, without harming urban cohesion or deepening inequalities.

One of the most debated aspects of the new law is the determination of annual rent at eight percent of the market value of the property. In today’s economic conditions, that rate is considered high, especially for small businesses already struggling to survive. A more balanced rate closer to five percent might have better protected both investment returns and tenant sustainability.

But more important than the percentage is how the property’s market value is calculated. It is vital to rely on well-trained, independent professionals to avoid market distortion or manipulation.

Market Benefits

In the medium term, this reform could generate several positive effects. The expected increase in rental supply especially in Beirut could drive prices down and improve housing access for many families. Apartments previously locked under old lease contracts would return to the market for sale, often at more accessible prices, helping a new generation acquire property, even in older buildings. This would contribute to urban reintegration and slow the exodus to suburban areas.

Gradually vacated buildings would also free up urban land for development. This could lead to a decrease in land prices and allow more viable real estate projects particularly in underserved neighborhoods with limited new construction.

Another anticipated benefit is the restoration of heritage buildings. Previously neglected due to low profitability, these structures could now regain economic value, encouraging renovation and preservation. This would support the protection of Lebanon’s architectural heritage rich, but often forgotten urban landscape.

Urban and Fiscal Impact

More broadly, rent liberalization could improve the visual and structural quality of our cities. With more realistic rental returns, landlords would have the financial means to maintain their properties, resulting in a more attractive and functional urban environment.

There would also be positive economic and fiscal repercussions. As properties are revalued and new contracts reflect actual market prices, government tax revenues from property and rental income will increase. These additional funds could be reinvested into infrastructure, public services, and housing programs.

A Missed Opportunity Without a Vision

However, this reform will only succeed if it is accompanied by a clear national vision. It requires serious leadership, effective regulation, and a genuine political will to integrate this reform into a broader strategy for social and urban recovery.

One urgent priority is the creation of a Ministry of Housing, capable of planning and implementing policies that reflect both citizen needs and market realities.

Rent liberalization should not be seen as a threat, but as an opportunity: to modernize our laws, stimulate investment, revive our cities, and guarantee a basic right — the right to dignified housing in a structured and sustainable framework.

April 29, 2025 0 comments

Culture Events Film

Cut to Reality: Lebanese film makers driven by purpose

by Marie Murray April 25, 2025

written by Marie Murray

Nadine Labaki, arguably Lebanon’s most renowned filmmaker, is currently working on writing and directing a new feature length film. Emblematic for Lebanon, it is her first since the 2018 release of Capernaum, which, according to its IMDB page, won 37 awards and received 55 nominations, including an Oscar nomination. For Labaki, the “against all odds” characterization of the film industry mirrors the tired praise of Lebanese resilience in the face of chronic crises. “I think we try so much to adapt to every situation that we are in and to live day by day, that we’ve never made any long-term plans … We don’t know how to do that. We don’t know how to see into the future, so we don’t know how to plan.” Labaki does sense that Lebanon’s post-war environment and new government might indicate positive changes and a rush of new energy for the film industry. But she is wary of trusting any promises of lasting stability. “We know the drill. We know it’s only a phase, a transition…We’re always on standby mode in this country.” The day after Labaki shared these thoughts, Israel bombed Beirut for the first time since the November 2024 ceasefire.

Doris Saba, the Executive Director of the non-profit Beirut Film Society (BFS), says that the organization was founded in 2006 as a student film competition at Notre Dame University. “We did the first cultural event directly after the war, so it was kind of our way to say, we are still here, we are resilient.” Then, like now, the message is the same: “We really don’t want war, we want to live…We want Lebanon to be on the map of cultural events and international events.” Saba joined BFS in 2017, the year it was officially registered as a non-profit. This year, Beirut Shorts International Film Festival, one of the events organized by BFS, became an Oscars qualifying film festival in three categories, meaning that if a film wins in one of these categories, it goes directly to be nominated in the Oscars. BFS is currently preparing another major event, Beirut International Women Festival, which will commence on April 27^th and screen around 100 films.

The underdog persistence of Lebanon’s film industry is nothing new. Despite systemic challenges including funding scarcity and inconsistent infrastructure, filmmakers are steadily producing work that is both technically ambitious and culturally grounded. Rather than relying on grand narratives of resilience, many are focusing on sharper, more intimate portrayals of life in Lebanon, often with limited resources but a clear sense of purpose. Operating in a tentatively post-war and crisis-hit local environment, while broader culture wars continue to suppress or sideline certain stories internationally, the work of these filmmakers is here to offer more than just entertainment. The result is a scene that, while fragmented, is marked by experimentation, collaboration, and a growing presence on the international film circuit.

Craft and conviction

Over the years, Labaki has honed a signature method of filming which involves long periods of research and gaining intimate knowledge of the subject matter, and then an abundance of patience in the filming process that allows untrained actors to develop enough trust to bring their own stories to life in the script. Whereas in most films the cameras and actors conform to the scene and screenplay, Labaki describes her method as more of “a dance, a choreography around the actors. We [the crew, cameras, etc.] adapt to them, not the other way around.” In typical filmmaking, life stops around the set which becomes the locus of action. “In this case,” says Labaki, “it’s the complete opposite. We try to be as invisible as possible.”

Without the backing of a robust film industry, Lebanese film makers need a tenacious team and an incredibly strong sense of purpose to propel them forward. Labaki notes how these two factors are inherently intertwined in her work. “When I am with my actors or my crew, it’s really about the honesty of whatever story we are telling. Why are we telling this story? Why is it important that this story is out there, or that people need to know about this specific story? The why is so important.”

Andrew Dawaf, an emerging yet prolific filmmaker with a resolute ambition to “make good films,” has seen Labaki’s film Capernaum “at least 15 times” and looks to her as a role model. He shares a similar sentiment and notes a difference between the films created in this region versus much of the work coming from film-saturated environments like Hollywood, for example, which he sees as overly polished. “I don’t feel hit by a truck when I watch a film that’s not Arab. I don’t feel that my heart is breaking.” While acknowledging that films of all genres have their place, as a viewer he often finds himself wondering “Are you interested in digging deep in the human heart to make people feel something? To change something? Do you have something to say or is it really becoming just popcorn?”

Currently, Dawaf has something to say and is working on writing and directing a short film that he has titled Mazmour Miyeh Wahde w Khamsin, or Psalm 151. There are only 150 psalms in the Bible. Reluctant to specify exactly what the film will be about, Dawaf says that while the message might be controversial for some, he believes that the goal is not to make people comfortable.

When asked about what work has been like over the past year, Dawaf says that his friends abroad can easily misjudge life in Lebanon, believing that people are either under constant bombs or else “living in lala land.” The reality, he says, is that “we live in a rollercoaster.” While there is an inundation of films and series screened from abroad, the reverse has never been true—most Arab films and series are enjoyed only by an Arab audience—and there is a paucity of knowledge on what life in Lebanon (and the region) is actually like. This gap in knowledge from abroad has long worked to the advantage of governments who wish to stir up public support for their agendas in the region. Since October 7^th, 2023, the brutal wars in Palestine and Lebanon have escalated in parallel to a frenzy of culture wars and aggressive political narratives.

High stakes for truth tellers

Carol Mansour, Palestinian Lebanese founder of Film Forward, a production house that focuses on documentaries with a social justice bent, finds that the culture wars—especially around the topic of Palestine—have spurred a high-stakes atmosphere for Palestinian filmmakers who simply wish to share their reality.

As one example of culture wars in the current context, artists who express any sort of solidarity with Palestinians or criticism of Israel’s actions face punishing consequences in many European countries such as having their art removed from exhibitions, losing funding, and even being prohibited from entry to certain countries. On March 24^th, Hamdan Ballal, an Oscar-winning director of No Other Land—a film that documents settler and IDF violence in the West Bank, all filmed before October 7^th, 2023—was assaulted by a group of Israeli settlers and IDF soldiers outside his home in the Masafer Yatta area of the West Bank, and then detained overnight. Despite its accolades, the film is not being streamed in the United States. At the same time, prominent American universities such as Colombia, Harvard, Princeton, and University of Pennsylvania, are being handed ultimatums by the Trump administration to either crack down on student protests, install greater oversight of Middle Eastern studies departments, and shut down student bodies advocating for the protection of human rights in Palestine, among other demands, or face the loss of up to billions in federal funding.

Mansour’s latest film, State of Passion, documents the genocide in Gaza through the eyes of the surgeon, Dr. Ghassan Abu Sitta. While the past year was a dud for most filmmakers in Lebanon whose projects were stalled by the war, Mansour and her producing partner Muna Khalidi seized the opportunity to tell Abu Sitta’s story. They first travelled to meet him in Amman after he fled Gaza in November 2023, and later worked with him in Beirut. “We didn’t even think about the money,” she says. “We travelled, Muna and myself, … we just booked our flights, paid our tickets and started to film.” It was only afterwards that they began collecting the money to cover the film’s budget through crowd-sourcing efforts, which, Mansour says, came quickly because many people were eager to donate towards such a cause. Despite a bipolar environment for such films—many of which are applauded and suppressed in equal measure depending on the audience—Mansour says that State of Passion has been the most well-received film that she and Khalidi have made. It has since been shown in film festivals in the region and in Europe, with almost all screenings fully booked.

A revival of film tourism with a dose of education?

Saba of Beirut Film Society notes that the videos shared by content creators on social media became main sources of news during the war in Lebanon and Gaza. The viral sharing of videos served as a reverse education—instead of Western media and films flooding the region, there was more of a two-way flow. One tenet of BFS’ mission is to promote responsible filmmaking. Saba explains that this means “trying to make a certain impact, using our platforms and festivals to promote a positive language between people.”

It also includes economic impact and building a “film friendly Lebanon” that supports film-induced tourism. Saba cited the popular 2025 Lebanese Ramadan series Bil Dam, which brought in tourists to Batroun where much of it was filmed, as an example of what successful film tourism can look like if given a chance to thrive in coordination with municipalities. She says that compared to other countries, Lebanon is already a friendlier film environment in some ways. As one example, the processes for acquiring filming permits are far less bureaucratic. “Abroad you need around three to six months while here you can solve it in a phone call. So those negative factors are sometimes positive.”

Although Lebanese directors and producers often find themselves muscling through obstacles to pull their budgets together and crossing their fingers that war or protracted crises won’t sabotage their work, the filmmaking industry has enormous economic potential for the country. Beyond its cultural value, the industry has the capacity to generate jobs, attract regional investment, and position the country as a creative hub in the Middle East. Gulf countries are scrambling to capitalize on this potential in their own countries. A 2024 Arab News article by journalist Ziad Belbagi claims that the 2018 lifting of a 35-year cinema ban in Saudi Arabia and investment in the country’s film industry has generated nearly $1 billion in revenue with a 25 percent annual growth rate. According to a 2014 paper by academic Alia Younes published in Cinej Cinema Journal, the United Arab Emirates have also identified the film industry as a tool for both nation building and economic growth.

But Lebanon’s creative and cultural offerings are very distinct from those of the Gulf. For one, Lebanon has a longer history of cinema—and one that has never been flooded with government funding. Although censorship on religious and political grounds does occasionally limit which movies are allowed in theaters, the state has never co-opted the film industry as a means of promoting a national image. It is the filmmakers themselves who take on that role, whether intentionally or not. Lebanon’s history, socio-political diversity, varied geography, and the high interaction between its local and worldwide expat population all make it a viable hub for filmmaking, series production, and film tourism. Its potential is soaring—seemingly as high as the obstacles against it.

With or without better days

Individual filmmakers rely on the private sector and international sponsorship for funding. Labaki, Mansour, Dawaf, and Saba all said that funding for each project is different, but that private donors play a large role. In many cases, there is a leap of faith that must be made — films often begin production before all the necessary funding is guaranteed. The act of staying in Lebanon as a filmmaker is, as Labaki says, “a mission. Because nothing goes the way it should. And if you decide to be here, it’s because you have a purpose alongside an anger or frustration that you want to transform to something good.”

Saba says that BFS’ Beirut Shorts Film Festival took place during the height of the past year’s war when Beirut was under intense attack before the ceasefire. “We were in the cinemas, and we did it. Despite everything, we did it.” Saba says that although ensuring security for participants is critical, there is no sense in waiting for stability in the country. “Our core mission is to continue doing what we do despite everything,” she says, adding that turning crises into opportunities has become a central tenet of the organization.

The power of filmmaking is not only the power of storytelling, but the collaborative power of the industry to reach for something more. The final result is that the audience is also pulled in and the stories on the screen become a collective experience. Some might even call them a tool of nation-building – one that is unfettered by crises, political quagmire, or external aggression.

April 25, 2025 0 comments

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Feltman urges reforms

by Executive Editors April 3, 2025

written by Executive Editors

Speaking exclusively to Executive before he left for the US, American ambassador to Beirut, Jeffrey Feltman, reiterated his country’s calls for Lebanon to address its World Trade Organization (WTO) obligations and use the recent window of opportunity for positive change to push through the necessary legislative reforms to encourage greater investment opportunities.

In terms of WTO membership, Lebanon has made scant progress. Three of six laws that are prerequisite for accession are still at the council of ministers. Feltman believes that Lebanon must seize the day. “The ball is in Lebanon’s court now; they have to get the framework passed. If momentum continues, then it can be built upon,” he said adding, “Our hope is that ministers in the new government would put their political clout behind the issue.”

The benefits are not insignificant and show that Lebanon genuinely complies with trade standards. “Free trade is important,” said Feltman. “It is a benchmark of trade policy.”

Feltman said that for any future government, fiscal reform and fiscal restructuring of the country is overdue. “New government can’t have continuity of policies from governments that preceded it. Reform is not popular but it is urgent,” he said hinting at greater investment opportunities. “There has been interest in Lebanon at the Department of Commerce and the US Chambers of Commerce, but without reform in the judicial system, a serious initiative to tackle corruption, and IPR as well as improving ICT infrastructure, telecommunications rates, Lebanon will not move forward.”

IPR in particular remains a key bone of contention. Feltman revealed that the US government is currently conducting a review of Generalized System of Preferences privileges and a revocation of these privileges is a possibility, meaning that many Lebanese goods would be lose their duty-free entrance to the US market. “IPR is an issue that Lebanon should be concerned about,” said Feltman. “It is one of the few countries in the world where there has been no strategy to address the problem in the long term.”

April 3, 2025 0 comments

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Bridging Lebanon’s Governance Gap: A Dual Perspective from Public and Corporate Reform

by Carmen Geha & Zeina Zeidan March 28, 2025

written by Carmen Geha & Zeina Zeidan

Lebanon stands today not only at the edge of economic collapse but also at the center of a profound governance crisis. The financial meltdown that began in 2019 unveiled structural failures in public institutions—failures rooted in decades of opacity, fragmented authority, and weak accountability. Governance in Lebanon is neither inclusive nor effective; it does not serve the public interest, nor does it inspire confidence.

Rebuilding the country requires more than financial aid or technocratic fixes. It demands a fundamental rethinking of how decisions are made, who is at the table, and how institutions—both public and private—are held accountable. As governance experts from public and corporate spheres, we argue that Lebanon’s recovery depends on bridging these domains. The public sector can learn from corporate governance’s discipline and structure, while the private sector must embrace transparency, public service, and inclusion traditionally associated with democratic institutions.

Governance in a Complex Political Landscape

Lebanon’s sectarian power-sharing system complicates governance reform. Political deadlock and elite capture have stalled national strategies, and fragmented authority has weakened both horizontal and vertical accountability. Yet regional benchmarks show that progress is possible. Tunisia’s post-revolution decentralization law, Jordan’s SOE performance dashboards, and Morocco’s e-Gov portals for fiscal transparency offer instructive models. Lebanon must contextualize reform but also benchmark itself against regional peers to restore credibility and effectiveness.

Lebanon ranks 154 out of 180 countries on Transparency International’s 2023 Corruption Perceptions Index. The 2020 Beirut Port explosion and the financial collapse have revealed how lack of oversight, weak institutions, and impunity led to national tragedy. The World Bank’s 2021 Lebanon Economic Monitor described the crisis as one of the worst globally since the 19th century, citing over $70 billion in banking sector losses.

Transparency International Lebanon (TI-LB)’s work has demonstrated that localized integrity frameworks—such as municipal anti-corruption units in Zahle and Jbeil—can improve procurement oversight and rebuild citizen trust. These models should be institutionalized through legislation and scaled through national adoption.

Corporate Governance: Accountability and ESG reform

The collapse of Lebanon’s banking sector also reflects corporate governance failures: weak risk controls, opaque ownership, and conflicts of interest. The 2020 Alvarez & Marsal forensic audit of Banque du Liban revealed systemic breaches of financial governance and reporting standards.

According to a 2021 report from the Organization for Economic Cooperation and Development (OECD) on state-owned enterprises (SOEs) in the region, applying International Finance Corporation (IFC) guidelines on board independence, risk oversight, and stakeholder rights could improve governance across Lebanon’s 140 SOEs and family-owned businesses. Private sector actors must move beyond compliance toward transparent operations grounded in long-term value creation.

As ESG standards become global norms, Lebanese companies must embrace public governance values: inclusion, long-term planning, and civic legitimacy. The World Economic Forum’s Stakeholder Capitalism Metrics and the OECD’s Principles of Corporate Governance both emphasize accountability to a broader set of stakeholders.

Public governance tools—such as open budgeting, civic consultations, and whistleblower protection—can help companies build social capital and mitigate reputational risk.

UNDP’s 2023 report on gender equality in politics and decision making found that women occupy less than 5 percent of board positions in Lebanese listed companies⁵ and only 4.6 percent of ministerial posts. Recent 2025 studies by the Lebanese League for Women in Business (LLWB) confirm structural exclusion across sectors, despite overwhelming evidence that gender-diverse boards enhance decision-making quality and organizational resilience.

The IFC’s 2020 Lebanon Women on Boards report and TI-LB’s advocacy for gender-sensitive governance both call for legal quotas, mentorship pipelines, and transparent nomination processes.

Toward a Unified Governance Code for Lebanon

To bridge public and corporate reform, we propose a unified governance framework based on international best practices and local adaptation:
1. Transparency – Mandate real-time disclosure of financials and board decisions through centralized e-platforms.
2. Accountability – Create independent oversight bodies modeled after Jordan’s Audit Bureau and Morocco’s Court of Accounts.
3. Participation – Institutionalize participatory policymaking through municipal and sectoral councils.
4. Oversight – Require all SOEs and public agencies to adopt independent boards and annual audits.
5. Gender Inclusion – Enforce a minimum 30 percent gender quota in all governance bodies by 2026.

We recognize resistance from political elites, fragmented enforcement, and resource constraints. However, reform is possible through a phased approach:

– Phase 1 (0–6 months): Enact procurement transparency laws and appoint interim SOE boards.
– Phase 2 (6–12 months): Establish civic monitoring platforms with civil society partners and introduce gender inclusion laws.
– Phase 3 (12–24 months): Launch a governance academy in partnership with local universities and donor agencies.

This strategy draws on UNDP’s Governance Acceleration Framework and World Bank implementation sequencing models.

Lebanon’s recovery hinges on governance

There can be no recovery without governance reform. The private sector must be accountable, the public sector must be efficient, and all institutions must reflect Lebanon’s full diversity.

Our work through TI-LB, LLWB, and international partnerships shows that reform is not only necessary—it is feasible. With political will and civic engagement, Lebanon can rebuild on a foundation of trust, transparency, and inclusion.

March 28, 2025 0 comments

Corporate Governance Corporate Social Responsibility Financial Indicators Financial reality

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

by Zeina Zeidan March 21, 2025

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.

March 21, 2025 0 comments

Analysis Analysis Finance Finance Finance & Economy Women's rights Women in the workplace

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

by Sherine Najdi March 14, 2025

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.”

March 14, 2025 0 comments