Throughout history, Lebanon has been a key economic hub in the Middle East. However, years of systemic mismanagement have led to a severe economic crisis, which the World Bank has ranked among the three worst crises globally in the past 150 years. While the new leadership raises hopes for change, the road to recovery is fraught with obstacles, despite international and local pressure for better governance.

The crisis has had a devastating impact on the population. Lebanon’s GDP per capita has plummeted from $9,174 to less than $3,650, according to World Bank figures, highlighting the country’s "social dumping"—where economic collapse has led to increased exploitation of low-cost labor.

But why focus on GDP per capita rather than other indicators? While the Lebanese pound has lost 60 times its value, illustrating the country’s economic downfall, GDP per capita remains a crucial metric. Wealth creation is driven by economic growth, meaning an increase in this indicator is vital. This underscores the government’s responsibility to implement effective fiscal and monetary policies that can revive the economy and restore Lebanese living standards.

Harnessing Natural Resources: An Alternative to Foreign Aid

Many officials and economists are banking on foreign aid to pull Lebanon out of its crisis. However, Lebanon has a far more sustainable asset: its natural resources. These remain largely untapped due to conflicts, corruption, and mismanagement. Yet, according to our estimates, their proper exploitation could push Lebanon’s GDP beyond $35 billion within five to ten years.

Natural Gas: Around one-third of the Levant Basin’s gas reserves lie within Lebanon’s exclusive economic zone, with an estimated value exceeding $300 billion. Annual extraction of one trillion cubic feet at $5 per thousand cubic feet could generate between $1.7 billion and $2.5 billion in revenue for the state.

Oil: Seismic surveys have identified potential oil reserves both onshore (notably in Hasbaya, Nabatiye, Nahr Ibrahim, Keserwan) and offshore. While these reserves are considered commercially unviable, further exploration is needed. If Lebanon could extract 50,000 barrels per day at an average price of $70 per barrel, this could generate $1.3 billion annually, with the government receiving $600 million.

Bitumen, Limestone, and Minerals: Lebanon has abundant mineral resources. Bitumen from Hasbaya, limestone used for cement production, and iron oxide in the Bekaa Valley could generate up to $600 million per year, provided adequate investment is secured.

Water and Hydropower: Lebanon, a country with abundant rainfall and rivers, has failed to capitalize on its hydropower potential. Better management could produce up to 700 MW of electricity and even allow for water exports to neighboring markets.

Rare Earth Elements and Other Minerals: Developing the extraction of rare earth elements, marble, salt, and gypsum could also boost economic growth. However, feasibility studies are necessary to assess their commercial viability.

A Political and Institutional Challenge

While Lebanon’s natural resources present a clear economic opportunity, two key conditions must be met for their successful exploitation: a lasting ceasefire with Israel and an independent judiciary. Without political stability and a serious crackdown on corruption, Lebanon will continue to be viewed as a high-risk environment for investors.

Can Lebanon overcome these challenges and capitalize on its natural wealth? The answer lies in the government’s ability to create an environment conductive to business and investment. Is the new administration ready to meet the challenge?