‘Rescue, reform and rebuild’: Can Lebanon’s new government save the economy?

‘Rescue, reform and rebuild’: Can Lebanon’s new government save the economy?
Lebanon new goverment must implement decisive reforms to regain international trust and reintegrate into the global financial system. (Supplied)
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Updated 03 March 2025
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‘Rescue, reform and rebuild’: Can Lebanon’s new government save the economy?

‘Rescue, reform and rebuild’: Can Lebanon’s new government save the economy?
  • Lebanon needs sustainable economic growth strategy focused on key sectors like technology, services, and exports

RIYADH: With a new president and a fresh cabinet, Lebanon stands at a pivotal moment. Can this government reverse economic collapse and restore trust?

The financial crisis, ongoing since 2019, has caused an $80 billion banking sector deficit, while debt restructuring remains stalled by political disputes.

The national currency has seen a 90 percent drop in value since 2019, and an International Monetary Fund delegation in May found Lebanon’s economic reforms insufficient to warrant financial aid, leading to an overreliance on foreign reserves. 

Nawaf Salam, appointed prime minister in January, used his first speech after securing the role to pledge to “rescue, reform and rebuild” Lebanon, alongside the leadership of President Joseph Aoun.

Both are facing mounting pressure to enact deep structural reforms, Fadi Nicholas Nassar, senior fellow at the Middle East Institute and director of the Institute for Social Justice and Conflict Resolution at the Lebanese American University told Arab News: “The country is emerging from financial collapse, the lingering trauma of the Beirut port blast, and over a year of war, yet time is not on its side. Trust, though quickly lost, is not so easily restored.” 

Jassem Ajaka, a Lebanese economist and professor, argues that full transparency and an independent audit of Lebanon’s financial sector and public finances are fundamental first steps. “We have not had such an audit since 2003, which is unacceptable. Without this, it is impossible to fairly distribute losses,” he told Arab News.

“Lebanon’s ability to secure economic aid and investments is deeply tied to the shifting geopolitical landscape,” said Ralph Baydoun, founder and director of research and strategic communications firm InflueAnswers. 

Baydoun explained that Lebanon must implement decisive reforms to regain international trust and reintegrate into the global financial system. 

Key priorities include robust anti-money laundering measures to escape the Financial Action Task Force blacklist grey list, an independent audit of the Banque du Liban and commercial banks for transparency, and a clear framework for distributing financial losses. 

He further added that the country needs a sustainable economic growth strategy focused on key sectors like technology, services, and exports.

One early positive sign came when Salam vowed to end sectarian quotas in financial appointments, a longstanding governance issue.

The financial burden on depositors

Lebanese banks had placed the majority of their funds with the central bank, whose financial engineering schemes propped up government spending and an unsustainable currency peg. Disagreements over how to distribute financial losses have fueled political deadlock.

Ajaka suggested deep restructuring of the banking sector, including mergers based on economic benefits and asset sales where necessary. “This restructuring should prioritize both depositors’ interests and the Lebanese economy. However, we must first determine the financial status of each bank before deciding the best course of action,” he said.

Depositors continue to bear losses while those responsible remain unpunished, Farida said. In 2023, the adviser proposed an alternative recovery roadmap outlining a phased approach to restoring depositors’ savings while holding financial elites accountable for the economic collapse. 

The plan prioritizes an immediate payout to small depositors, funded by a comprehensive audit of bank reserves and the recovery of excessive interest payments and illicitly transferred funds. Larger deposits would be gradually restored through a combination of bank bail-ins and legal actions against those responsible for mismanaging Lebanon’s banking sector. 

Lebanon’s ability to secure economic aid and investments is deeply tied to the shifting geopolitical landscape.

Ralph Baydoun, founder and director of InflueAnswers

Commenting on the reduction in the potential payouts for depositors, Farida said: “The more time we wait, the less this number is. I expect this number to be going down with time. Unless there is a complete audit, we can’t really tell the exact number.”

Unlike past government proposals, Farida’s plan rejects the use of public assets to cover banking losses, aiming instead to shield state resources from further depletion. However, with deposit values eroding daily, he warns that delays in implementation will make full recovery increasingly difficult.

The Depositors’ Union welcomed reform pledges but stressed accountability, rejecting any plan shifting banking losses to public assets. It called for fair restructuring that prioritizes depositors’ rights and holds banks accountable.

“Accountability is the key for any reform plan. There cannot be a regain of the trust in the system, in the public sector or in banking sector, if the ones who were responsible for this crisis were not held accountable,” Mohammad Farida, the economic adviser to the Depositors’ Union in Lebanon, told Arab News.

One of the greatest obstacles to reform was Hezbollah’s influence over the state. The group’s political and military entrenchment continued for years to deter international investment and prevented Lebanon from fully reintegrating into the regional economy. 

The damage cannot be undone by words alone. Only material deliverables can restore trust — locally, regionally, and globally.

Fadi Nicholas Nassar, senior fellow at the Middle East Institute

For Lebanon to emerge from its crisis, Nassar argued, major structural changes are needed. “Restoring full sovereignty means dismantling Hezbollah, not just managing around it. Governance must shift from patronage to competence, with ministries staffed by professionals, not cronies. Basic services like electricity cannot remain luxuries,” he said.

Baydoun argued that Hezbollah is now in a more precarious position than in previous years due to financial strains from war and a decline in Iranian support. 

He explained to Arab News that Lebanon’s ties with Iran and Hezbollah have long restricted Western and Gulf financial support. 

Baydoun highlighted that the diminishing influence of Iran’s regional network and the weakening of the Assad regime in Syria have created an opportunity for Lebanon to move closer to Western spheres of influence and regain donor confidence.

The economic crisis deepened as the humanitarian situation worsened. The World Bank estimated Hezbollah-Israel war damages at $8.5 billion, with the economy shrinking 10 percent in 2024 — its fifth year of contraction, totaling over 34 percent of the gross domestic product. Over 875,000 were displaced, and key sectors faced billions in losses.

“The estimated $10 billion required for reconstruction in Lebanon will likely come from international donors, primarily the GCC (Gulf Cooperation Council), rather than from Iran,” Baydoun added.

On Jan. 29, President Aoun reaffirmed Lebanon’s commitment to reforms, stating that the new government’s priority is drafting necessary legislation. In a meeting with World Bank official Osman Dion, Aoun said: “The first task of the new government is to immediately begin drafting the necessary legislation for this purpose.” 

Accountability is the key for any reform plan. There cannot be a regain of the trust in the system, in the public sector or in banking sector, if the ones who were responsible for this crisis were not held accountable.

Mohammad Farida, economic adviser to the Depositors’ Union in Lebanon

Nassar said that Lebanon’s new government has only one way to prove its legitimacy – by delivering results. 

“The damage cannot be undone by words alone. Only material deliverables can restore trust — locally, regionally, and globally,” he said.

Moody’s has projected that economic activity could begin to recover later this year, contingent on political stability and the implementation of reforms. Yet, Lebanon’s road to recovery is far from guaranteed. International donors — including the Gulf ones — remain skeptical, demanding real action rather than political rhetoric.

“Attracting foreign direct investments requires two key conditions: Lebanon must implement ceasefire agreements with Israel and establish an independent judiciary to combat corruption,” Ajaka stated. He added that Lebanon’s high return on investment potential could make it a key regional player if these conditions are met.

Saudi Arabia’s Foreign Minister Faisal bin Farhan underscored this sentiment during a visit to the country on Jan. 23, saying: “We will need to see real action, real reform, and a commitment to a Lebanon that is looking to the future, not to the past.”

Baydoun explained that Lebanon’s exclusion from key regional trade routes, including China’s Belt and Road Initiative and the Iraq-Syria-Turkiye-Europe corridor, stems from both political instability and shifting regional alliances. 

To avoid further marginalization, he noted, Lebanon must actively lobby for integration and position itself as a strategic trade hub. The Beirut Port explosion accelerated its economic sidelining, making its reconstruction — aligned with regional trade networks— a priority. “If Lebanon does not proactively position itself as an indispensable part of one of these networks, it risks permanent exclusion from the evolving global supply chain,” Baydoun added.

The energy sector and economic recovery

Addressing the financial crisis, energy policy expert and Middle East and North Africa director of the Natural Resource Governance Institute, Laury Haytayan, said: “There is a need to encourage the private sector to invest in the renewable energy sector to go beyond the individual initiatives.”

Lebanon’s offshore gas has often been seen as an economic game-changer, but Haytayan warned against unrealistic expectations, saying that the nation lacks active hydrocarbon discoveries, making energy wealth an unreliable recovery catalyst.

The energy expert dismissed the notion of using the country’s underdeveloped oil and gas sector as a bargaining chip in negotiations with international stakeholders, while stressing the need to restructure Lebanon’s electricity sector rather than relying on oil and gas for short-term recovery. 

Haytayan urged regulatory reforms, including appointing the long-awaited electricity regulator and enforcing the 23-year-old electricity law mandating Electricite Du Liban’s unbundling and private sector involvement. She questioned whether the new minister would push for privatization, a move which Ajaka argued is crucial for state-owned enterprises, particularly in the electricity sector. 

“Lebanon has spent over $50 billion on electricity with no results. Justice must investigate these expenditures,” he said, citing the UK’s deregulation success as a potential model for Lebanon.

Looking at regional energy developments, Haytayan was clear that Lebanon cannot be measured against leading Gulf states, saying: “There is no country in the Middle East and North Africa that could be compared to Saudi Arabia and the UAE when it comes to technical and financial capacities.”

Baydoun argued that the Gulf’s dominance in energy does not hinder Lebanon’s potential but rather offers a strategic advantage. While the GCC exports to Asia, Lebanon — if it begins oil and gas production — could target European markets, avoiding direct competition. He added that Lebanon should leverage the GCC for technical expertise and investment.

The economic adviser to the Depositors’ Union adviser Farida said the primary challenge in implementing reforms and resolving Lebanon’s economic crisis lies in the need for legislative updates, including new laws requiring parliamentary approval, stressing that any plan must first gain parliamentary backing to have a real chance of success.

He said: “It’s still premature to judge whether this administration will be able to actually produce a new comprehensive plan for the financial gap in the banking sector and the overall crisis in the public sector and the administration.”


Foreign startup registrations in Saudi Arabia rise 118% 

Foreign startup registrations in Saudi Arabia rise 118% 
Updated 21 July 2025
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Foreign startup registrations in Saudi Arabia rise 118% 

Foreign startup registrations in Saudi Arabia rise 118% 

RIYADH: Saudi Arabia’s Ministry of Investment has granted 550 foreign new ventures the Startup Investment Registration, known as the Riyadi license, as of mid-2025, marking an annual rise of 118 percent. 

The Small and Medium Enterprises General Authority, known as Monshaʾat, has issued 364 licenses to business incubators and accelerators nationwide, according to a report by the body. 

Monshaʾat said these entities provide facilities for prototype development, mentorship, and connections to investors and commercial partners. 

The increase in Riyadi registrations aligns with the Kingdom’s surge in venture capital activity. 

According to regional platform MAGNiTT, Saudi Arabia led MENA VC funding in the first half of 2025, with $860 million raised, representing a 116 percent annual increase across 114 deals. This marked a 31 percent rise in deal count compared to the same period in 2024. 

This momentum built on a record 2024 performance, when startups in the Kingdom secured $750 million in funding and saw a 34 percent increase in early- and mid-stage “MEGA” rounds below $100 million.  

“This increase forms part of joint national efforts to reinforce the Kingdom’s role as a regional hub for entrepreneurship by streamlining market access for foreign startups and establishing a flexible regulatory environment that supports innovation and attracts investment,” Monsha’at’s report said. 

According to the Ministry of Investment, this trend reflects growing international interest in Saudi Arabia’s investment environment, underpinned by recent legislative changes, expanded digital infrastructure, and a range of support programs introduced in line with the objectives of Vision 2030. 

Saudi organizers have hosted international startup events, including Biban and LEAP, which feature presentations on the local ecosystem and investment opportunities. 

Government agencies and private-sector representatives have attended overseas gatherings, such as the Web Summit, VivaTech, and Slush, to facilitate networking with foreign entrepreneurs and promote the Kingdom as a potential base for regional operations. 

In addition to the Riyadi permit, the Ministry of Investment will issue a full suite of eight sector-specific business licenses, designed to accommodate virtually any foreign investor’s needs. 

These include service licenses, which permit 100 percent foreign ownership for activities such as IT, consulting, marketing, and hospitality; entrepreneurial authorizations that offer streamlined fees and access to government-led support for startups; and industrial licenses for establishing manufacturing facilities. 

Specialized agricultural permits cover crop cultivation and animal husbandry, while trade licenses authorize wholesale, retail and import-export operations. 

Additional categories encompass real estate licenses for development and brokerage projects, professional permits for individual practitioners and solidarity firms, and mining licenses for exploration and extraction activities. 

Each permit carries tailored minimum-capital requirements and documentation processes, but all are obtainable through MISA’s online portal, which centralizes application, approval and renewal under a unified regulatory framework. 


Closing Bell: Saudi main market closes in green with 10,981 points

Closing Bell: Saudi main market closes in green with 10,981 points
Updated 21 July 2025
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Closing Bell: Saudi main market closes in green with 10,981 points

Closing Bell: Saudi main market closes in green with 10,981 points
  • MSCI Tadawul 30 Index gained 0.27% to finish at 1,408.88
  • Parallel market Nomu slipped 0.30% to close at 27,080.02

RIYADH: Saudi Arabia’s Tadawul All Share Index closed higher on Monday, rising 16.46 points, or 0.15 percent, to end the session at 10,981.17.

The total trading value on the main market reached SR4.3 billion ($1.1 billion), with 95 stocks advancing and 148 declining. 

The MSCI Tadawul 30 Index also rallied, adding 3.86 points, or 0.27 percent, to finish at 1,408.88. 

The Kingdom’s parallel market Nomu slipped 82.58 points, or 0.30 percent, to close at 27,080.02. Of the listed stocks, 38 gained while 44 fell. 

The best-performing stock on the main market was SHL Finance Co., whose shares jumped 10 percent to SR23.87. 

Other notable gainers included Salama Cooperative Insurance Co., up 5.58 percent to SR13.62, Miahona Co. Limited, which gained 5.23 percent to SR26.94, Alamar Foods Co., rising 5.17 percent to SR53.95, and Fawaz Abdulaziz Alhokair Co., which climbed 4.92 percent to SR31.16. 

On the downside, Sahara International Petrochemical Co. posted the steepest drop of the day, falling 5.69 percent to SR17.90.  

Saudi Azm for Communication and Information Technology Co. declined 5.42 percent to SR 28.60, Alistithmar AREIC Diversified REIT Fund slipped 4.92 percent to SR 8.70, Wafrah for Industry and Development Co. fell 4.63 percent to SR27.20, and Riyadh Cables Group Co. dropped 4.13 percent to SR130. 

On the announcement front, Sports Clubs Co. is set to make its trading debut on Saudi Arabia’s main market on July 22. 

The listing follows an initial public offering in which Sports Clubs floated 34.32 million shares, representing 33 percent of its issued capital, at a nominal value of SR1 each.  

Demand saw the individual tranche oversubscribed by 5.3 times, with investors guaranteed a minimum allotment of ten shares. 

To help stabilize the share price in early trading, the bourse has set a plus or minus 30 percent daily price limit and a 10 percent static limit. 

Founded in 1994, Sports Clubs operates a network of 56 branches across 18 Saudi cities.  

Its portfolio includes 41 Body Masters men’s gyms, a brand established decades ago, and 15 Body Motions women’s clubs, introduced four years ago as part of the company’s gender-segmented expansion strategy. 


Jordan’s hybrid vehicle imports rise 31% YoY in H1

Jordan’s hybrid vehicle imports rise 31% YoY in H1
Updated 21 July 2025
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Jordan’s hybrid vehicle imports rise 31% YoY in H1

Jordan’s hybrid vehicle imports rise 31% YoY in H1

RIYADH: The number of hybrid vehicles imported into Jordan during the first half of 2025 rose by 31 percent year on year, reaching 6,834 units, new figures showed.

Released by the Jordan Free Zones Investors Commission, the numbers indicated that despite the increase, total vehicle clearance from the Zarqa Free Zone to the local market dropped by 9 percent annually during the same period, the Jordan News Agency, also known as Petra, reported.

The rise in imports of these vehicles aligns with a broader regional trend. An analysis published by market research firm Claight in December projects the hybrid vehicle industry across the Middle East and Africa to see a compound annual growth rate of 17.7 percent between 2025 and 2034.

The newly released Petra statement said: “The commission’s representative for the automotive sector, Jihad Abu Nasser, attributed the drop to shifts in consumer demand and the impact of recent regulatory and tax measures, particularly those affecting electric vehicles. He noted that several vehicle categories saw a downturn, including electric and diesel models.”

Gasoline car imports stayed fairly steady, with a slight 3 percent jump year on year during the first half of the year. The number of cleared gasoline cars increased from 2,683 to 2,753, representing a 70 vehicle increase.

Re-export activity from the free zones saw significant growth, with vehicle exports rising by 67 percent annually to reach 39,641 re-exported vehicles in the first half of the year.

The Petra statement added that Abu Nasser said the robust re-export growth underscores the responsiveness of Jordan’s free zones to regional market demands, particularly from Syria and Iraq. 

“He emphasized that the decline in local market clearances, combined with changes in consumer preferences and new policies, highlights the need for regulatory clarity and a stable investment environment. He added that the commission continues to monitor these developments closely due to their significant impact on the vehicle sector and investment activity in the free zones.”

Across the Middle East, interest in environmentally friendly alternatives to traditional combustion engine vehicles is gradually rising, as automakers accelerate the rollout of new EV models each year.

Saudi Arabia aims to have at least 30 percent of its cars be electric-powered by 2030, following its pledge to reach net-zero carbon emissions by 2060.

Meanwhile, the UAE is pushing for 42,000 EVs to be on its streets within the next decade. To meet the rising demand for green mobility, the UAE opened its first EV manufacturing facility in Dubai Industrial City in 2022, at a total cost of $408 million.

The Gulf Cooperation Council’s EV market is highly competitive, with Tesla at the forefront and brands like BMW, Audi, and Mercedes-Benz close behind.


Saudi crude exports rise to 6.2m bpd: JODI 

Saudi crude exports rise to 6.2m bpd: JODI 
Updated 21 July 2025
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Saudi crude exports rise to 6.2m bpd: JODI 

Saudi crude exports rise to 6.2m bpd: JODI 

RIYADH: Saudi Arabia’s crude oil exports rose to 6.19 million barrels per day in May, an annual increase of 1.19 percent, according to the Joint Organizations Data Initiative. 

The rise was driven by increased production, which also climbed during the month, rising by 2.12 percent year on year to 9.18 million bpd. 

This marks a continuation of the Kingdom’s phased dialling up of output as OPEC+ producers gradually unwind voluntary cuts introduced in previous years. 

The JODI figures come amid broader market developments in the global oil sector. Earlier this month, eight key OPEC+ producers, including Saudi Arabia, Russia, and the UAE, agreed to accelerate their phased output increases, announcing a larger-than-expected 548,000 bpd production hike for August.   

The decision, taken during a virtual meeting, reflects confidence in global economic resilience and healthy market fundamentals, according to the OPEC Secretariat. 

The eight-nation subset of the alliance has been gradually reversing 2.2 million bpd of voluntary production cuts separate from the bloc’s formal policy, with Saudi Arabia playing a leading role. 

This follows earlier monthly hikes of 411,000 bpd in May, June, and July, with a new, steeper increase slated for August. 

Saudi Arabia’s refined oil exports saw a sharper uptick, growing by 12.12 percent to reach 1.37 million bpd in May. 

This growth was largely driven by a 25 percent year-on-year surge in shipments of motor and aviation gasoline, which reached 325,000 bpd. Despite this increase, other major refined components recorded declines — gas diesel exports fell 2.62 percent to 594,000 bpd, while fuel oil shipments dropped 3 percent to 161,000 bpd. 

Gas diesel remained the dominant component of refined exports, accounting for 43 percent of the total, followed by motor and aviation fuels at 24 percent, and fuel oil at 12 percent. 

Refinery crude output in the Kingdom declined by 7.64 percent year on year, settling at 2.72 million bpd. 

Direct crude burn, the use of crude oil for domestic power generation, rose by 23 percent in May compared to the same month of 2024, reaching 48,000 bpd, according to JODI. 

This year-on-year increase is likely driven by a combination of factors, including the continued population growth across the Kingdom, which has expanded residential and commercial power consumption.


Saudi sustainable building demand triples

Saudi sustainable building demand triples
Updated 21 July 2025
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Saudi sustainable building demand triples

Saudi sustainable building demand triples
  • Growth reflects enhancements to ready-built property inspection service
  • 38 new projects have registered for sustainability assessment services

JEDDAH: Demand for environmental performance assessments under Saudi Arabia’s Sustainable Building program has tripled over the past five years, highlighting the Kingdom’s growing focus on eco-friendly development.

The growth follows the launch of the program’s digital platform, the automation of service procedures, and improved accessibility. It also reflects enhancements to the ready-built property inspection service, which now allows developers to submit detailed inspection requests for villa compounds and apartment buildings, according to a Saudi Press Agency report citing an official press release.

As part of the Kingdom’s Vision 2030 strategy, the nation is accelerating efforts to make its rapidly growing construction sector more sustainable and environmentally responsible.

Developed by the Ministry of Municipal, Rural Affairs, and Housing, the Mostadam, meaning “sustainable,” program is designed to suit the Kingdom’s local climate and environmental conditions. It promotes sustainable building practices by improving the efficiency of energy, water, and resource use, while supporting economic growth and job creation.

Projects are awarded one of five ratings, ranging from Green to Diamond, based on their compliance with established sustainability criteria.

“The program noted that six projects received sustainability assessment certificates during the first half of 2025, marking a 200 percent increase compared to the same period in 2024. Moreover, the number of projects granted design conformity certificates rose by 93 percent, reaching 29 projects,” SPA reported.

The release-based report said that 38 new projects, including four communities covering over 8 million sq. meters, have registered for sustainability assessment services, with a combined built-up area exceeding 700,000 sq. meters.

Since its inception in 2018, the platform has issued over 6,000 reports, encompassing property inspections and evaluations of construction quality.

The national program, in cooperation with the Real Estate General Authority, also announced that university students registered with the Saudi Council of Engineers are now eligible to enroll in training programs offered by the Saudi Real Estate Institute, SPA added.

The release said that the initiative aims to support students, enhance their professional readiness, and empower youth by enabling them to develop their skills and create a “Certified Engineer” account through the Mostadam platform.

The Sustainability Assessment is the Kingdom’s first evaluation system aligned with international best practices and the Saudi Building Code. It enables owners and developers to measure the sustainability of new and existing buildings through a comprehensive rating system, from design to maintenance.

The assessment standards were specifically developed to suit the nation’s climate and environmental conditions, focusing on key areas such as energy, water, health, and quality of life, consistent with the goals of Saudi Vision 2030.