Can Lebanon’s Economy Be Saved? A Plan for Revival

The recent financial and economic meltdown in Lebanon is the result of 30 years of social, economic, financial and fiscal mismanagement, amplified by the COVID-19 pandemic, and further exacerbated by the Beirut Port explosion. Lebanese citizens’ trust as well as the international community’s trust in the government have unfortunately been destroyed over the past few years. Consequently, Lebanon’s sole option today is to rebuild confidence in the government and the public institutions by implementing economic reforms and concurrently seek an IMF program which will pave the way for additional financing from other international sources. The most important confidence-building step is a clear financial and economic plan that has the support of all key stakeholders. The current article presents a roadmap for a reforms-driven export-led growth strategy for Lebanon. Ultimately, the goal is to ‘jump start’ the economy on a path of sustainable, inclusive, and equitable economic growth. Such growth should be grounded in a small open economy model and driven by low tariffs, a flexible exchange rate regime, and a dynamic export sector built on competitive and comparative advantages. This plan partially builds on proposals and recommendations provided by previous economic plans and policy notes.