Lebanon’s economy reels from war
While truce holds, country now faces additional burdens
Weeks after Israel’s invasion of Lebanon, Hasan Raad went from a decent job and a comfortable life to unemployment and displacement.
The 28-year-old content creator had finished building his production studio in the capital, Beirut, and was saving to buy a secondhand Mustang convertible.
As war enveloped the country, he began using his savings to help friends and family and for donating to the displaced. He could not get into his studio for weeks, and his clients, including celebrities, furniture brands and restaurants, dried up.
Then, an Israeli airstrike hit his family’s apartment building south of Beirut, leaving them homeless.
“We came out of this war with nothing,” Raad said.
“We are starting from zero.”
Lebanon, still scarred by a 15-year civil war that ended in 1990, has trudged from one devastating crisis to another in recent years. A debilitating economic meltdown beginning in 2019, aggravated by the coronavirus pandemic, cratered the currency and evaporated investments. A blast at the Beirut port in 2020 killed more than 200 people and caused billions of dollars in damage.
Banking and tourism have been the major economic drivers of Lebanon’s economy before and after the civil war, but both have suffered in recent years.
Lebanese banks remain largely insolvent, have accumulated billions in losses.
The war between Israel and Hezbollah, the armed Lebanese group, escalated in September, worsening the already precarious situation.
Experts say the war, Hasan Raad stands Dec. 27 amid the rubble of his family’s apartment building in the Dahiya neighborhood of Beirut. LAURA BOUSHNAK/THE NEW YORK TIMES now suspended in a fragile truce, may have crippled any chance of a swift economic recovery.
After the Oct. 7, 2023, Hamas-led attack on Israel that ignited the war in the Gaza Strip, Hezbollah began targeting Israel with strikes in solidarity with Hamas, setting off back-and-forth attacks between the two.
Civilians on both sides were displaced.
Vowing to end a year of the cross-border attacks, Israel launched a ground invasion and intensified its bombardment with an aim to cripple Hezbollah’s forces and infrastructure.
More than 3,700 people have been killed, and nearly 16,000 others have been wounded since October 2023, according to the Lebanese Ministry of Public Health, which does not differentiate between combatants and civilians in its count. An estimated 1.3 million people were forced from their homes in Lebanon before a ceasefire deal was announced in late November.
Israel leveled hundreds of buildings. Shelling has prompted the burning of olive, banana and citrus farmlands.
Restaurants and other businesses have closed, leaving thousands without jobs.
The World Bank estimates that the war has cost $8.5 billion in damage.
To further complicate matters, a global financial crime watchdog placed Lebanon in October on its “gray list” over concerns about money laundering and terrorist financing. The move, economic experts say, could make it difficult for the Lebanese diaspora to send remittances home.
“One in three Lebanese was already in poverty” before the war, said Jean-? Christophe Carret, the World Bank’s country director for the Middle East department, which includes Lebanon. “Those numbers were bad.” The conflict, he said, made “them worse.”
Caring for the displaced and repairing the war’s damage will place an additional burden on Lebanon’s hollowed-out economy.
For the Lebanese, the latest crisis has meant dealing with another painful episode in their nation’s history.
Lebanon’s economy blossomed after the civil war because of remittances from overseas Lebanese and investment from Arab nations. Then, a monthlong war between Israel and Hezbollah in 2006 caused immense displacement and damage that was repaired with billions in aid and loans from Gulf States and Iran.
But endemic corruption, economic crises, the Beirut explosion and the collapse of the government reversed those gains. A caretaker government now runs Lebanon, and any economic overhauls, along with the international loans they could help generate, are on pause.
A return to war has put those changes even more out of reach.
The Independent Task Force for Lebanon, a group of Lebanese economists, warned in a report published in October that around 50,000 registered businesses — 60% of the country’s total — had been disrupted by the conflict, either by physical damage, employee displacement, supply chain interruptions or a lack of customers. The World Bank estimates Lebanon’s commerce sector has lost $1.7 billion over the past year.
When Khodor Issa, an operations manager at the Barzakh bookstore and cafe along the commercial Hamra Street in Beirut, returned to Lebanon four years ago after living in China and Colombia, he was hopeful that his country had turned a corner. But crises soon began multiplying, and the latest war, he said, has whittled away at whatever meager success he has built.
Less than a third of the usual participants come in when he holds events at the bookstore, Issa, 39, said.
To attract customers, he has begun doing more online marketing and offering discounts. To scrape by, he has reduced salaries for his staff members and pleaded with his landlord to delay rent payments.
“There’s so much uncertainty, and it’s confusing,” he said. “We are in survival mode.”
The 28-year-old content creator had finished building his production studio in the capital, Beirut, and was saving to buy a secondhand Mustang convertible.
As war enveloped the country, he began using his savings to help friends and family and for donating to the displaced. He could not get into his studio for weeks, and his clients, including celebrities, furniture brands and restaurants, dried up.
Then, an Israeli airstrike hit his family’s apartment building south of Beirut, leaving them homeless.
“We came out of this war with nothing,” Raad said.
“We are starting from zero.”
Lebanon, still scarred by a 15-year civil war that ended in 1990, has trudged from one devastating crisis to another in recent years. A debilitating economic meltdown beginning in 2019, aggravated by the coronavirus pandemic, cratered the currency and evaporated investments. A blast at the Beirut port in 2020 killed more than 200 people and caused billions of dollars in damage.
Banking and tourism have been the major economic drivers of Lebanon’s economy before and after the civil war, but both have suffered in recent years.
Lebanese banks remain largely insolvent, have accumulated billions in losses.
The war between Israel and Hezbollah, the armed Lebanese group, escalated in September, worsening the already precarious situation.
Experts say the war, Hasan Raad stands Dec. 27 amid the rubble of his family’s apartment building in the Dahiya neighborhood of Beirut. LAURA BOUSHNAK/THE NEW YORK TIMES now suspended in a fragile truce, may have crippled any chance of a swift economic recovery.
After the Oct. 7, 2023, Hamas-led attack on Israel that ignited the war in the Gaza Strip, Hezbollah began targeting Israel with strikes in solidarity with Hamas, setting off back-and-forth attacks between the two.
Civilians on both sides were displaced.
Vowing to end a year of the cross-border attacks, Israel launched a ground invasion and intensified its bombardment with an aim to cripple Hezbollah’s forces and infrastructure.
More than 3,700 people have been killed, and nearly 16,000 others have been wounded since October 2023, according to the Lebanese Ministry of Public Health, which does not differentiate between combatants and civilians in its count. An estimated 1.3 million people were forced from their homes in Lebanon before a ceasefire deal was announced in late November.
Israel leveled hundreds of buildings. Shelling has prompted the burning of olive, banana and citrus farmlands.
Restaurants and other businesses have closed, leaving thousands without jobs.
The World Bank estimates that the war has cost $8.5 billion in damage.
To further complicate matters, a global financial crime watchdog placed Lebanon in October on its “gray list” over concerns about money laundering and terrorist financing. The move, economic experts say, could make it difficult for the Lebanese diaspora to send remittances home.
“One in three Lebanese was already in poverty” before the war, said Jean-? Christophe Carret, the World Bank’s country director for the Middle East department, which includes Lebanon. “Those numbers were bad.” The conflict, he said, made “them worse.”
Caring for the displaced and repairing the war’s damage will place an additional burden on Lebanon’s hollowed-out economy.
For the Lebanese, the latest crisis has meant dealing with another painful episode in their nation’s history.
Lebanon’s economy blossomed after the civil war because of remittances from overseas Lebanese and investment from Arab nations. Then, a monthlong war between Israel and Hezbollah in 2006 caused immense displacement and damage that was repaired with billions in aid and loans from Gulf States and Iran.
But endemic corruption, economic crises, the Beirut explosion and the collapse of the government reversed those gains. A caretaker government now runs Lebanon, and any economic overhauls, along with the international loans they could help generate, are on pause.
A return to war has put those changes even more out of reach.
The Independent Task Force for Lebanon, a group of Lebanese economists, warned in a report published in October that around 50,000 registered businesses — 60% of the country’s total — had been disrupted by the conflict, either by physical damage, employee displacement, supply chain interruptions or a lack of customers. The World Bank estimates Lebanon’s commerce sector has lost $1.7 billion over the past year.
When Khodor Issa, an operations manager at the Barzakh bookstore and cafe along the commercial Hamra Street in Beirut, returned to Lebanon four years ago after living in China and Colombia, he was hopeful that his country had turned a corner. But crises soon began multiplying, and the latest war, he said, has whittled away at whatever meager success he has built.
Less than a third of the usual participants come in when he holds events at the bookstore, Issa, 39, said.
To attract customers, he has begun doing more online marketing and offering discounts. To scrape by, he has reduced salaries for his staff members and pleaded with his landlord to delay rent payments.
“There’s so much uncertainty, and it’s confusing,” he said. “We are in survival mode.”
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