Lebanon is facing one of the worst economic and financial crises in modern history, causing unprecedented poverty rates and a massive brain drain. The Ministry of Economy and Trade (MoET), with the support of the United Nations Economic and Social Commission for Western Asia (ESCWA), has thus embarked on a project for the development of an operational plan to reboot the Lebanese economy, launched today at the UN House during an event attended by several ministers and high-level dignitaries from Beirut-based embassies, UN agencies and other international and local organizations.
While fundamental reforms are crucial for reviving the country’s economy, the plan will seek to identify specific short-term actions in core sectors to initiate recovery by rapidly generating employment opportunities and additional income. In this regard, three key sectors were prioritized by the Ministry, namely agribusiness, tourism and the digital economy, as they show growth potential in the current dire circumstances.
“None of the economic recovery scenarios is easy, we have to choose the least painful,” Lebanese Minister of Economy and Trade Amin Salam said. “Amid this challenging situation, we are looking to light a candle of hope. The plan presented today is subject to development, improvement, and feedback, but most importantly, it is feasible,” he stressed.
The country’s GDP shrunk by 25% in 2020, and 16.2% in 2021. However, ESCWA projects positive growth in 2022, on which the plan will capitalize to boost productivity and competitiveness; improve the business environment to attract new capital; and increase youth employment. The plan will link these three objectives to short- and medium-term actions, consolidated from previous national and sectoral development plans developed by the Lebanese Government and advocated by international organizations.
In her remarks, ESCWA Executive Secretary Rola Dashti said that ESCWA would support the Ministry in conducting analysis, developing key performance indicators (KPIs), engaging with stakeholders and communicating strategically about the plan. “Although fundamental reforms are crucial, the Lebanese people do not have the luxury to wait for longer-term results; they need quick wins,” she added.
Like all other sectors of the Lebanese economy, the three targeted ones face serious challenges, including low productivity and competitiveness, and ineffective value chains for agribusiness; weak investments in hospitality infrastructure for tourism; and weak virtual and physical infrastructure for the digital economy. To respond to them, the plan will envisage initiatives and regulatory reforms to enhance the country’s competitiveness and international confidence.
For his part, Director General of MoET Mohamad Bou Haidar said that several plans and strategies have been put in place over the years, and, although most of these plans were evidence-based and presented a holistic approach to recovery, they missed an integral part to the success of any strategy which is implementation. He called to leverage previous plans and lessons learnt to design a robust plan and ensure a right path towards the achievement of objectives.
Through this collaborative project, ESCWA will support the Ministry in assessing the impact of the recommended policies on the economy. ESCWA will also include identifying KPIs, aligning budgets with operationalized plans, and adopting a monitoring and evaluation framework. The outcome would ultimately be to build a productive, innovative, competitive and enabling economy that supports recovery from the current crisis by 2025 through targeted reforms in the three sectors.