Lebanon’s hidden billions: Assets without returns

Despite being one of the most indebted countries in the world, Lebanon is not, strictly speaking, bankrupt. It is, rather, a country that is rich in assets but poor in the way it manages them. Alongside a massive public debt and a financial collapse widely described as one of the worst globally in modern history, Lebanon now finds itself at a critical turning point.

The country is entering negotiations with Israel that could potentially bring an end to a destructive phase of conflict, one that has compounded already severe economic losses and pushed public finances to the brink. Yet even if tensions ease, recovery will not come automatically. Stability may create opportunities, but rebuilding the state’s finances will require a deliberate internal effort.

In this context, the question of how Lebanon mobilises its own resources becomes central. Among the most overlooked and potentially transformative are state-owned assets. The country holds a vast portfolio of underutilised properties, with an estimated value running into tens of billions of dollars. Yet these assets remain largely outside the productive economy, reflecting deep structural failures in governance and depriving the treasury of a potentially vital source of revenue.

A legal framework, a fragmented reality

Under Decision 3339/1930, Lebanon’s state property is divided into two broad categories: public assets designated for collective use, and private state assets that can be invested under defined legal frameworks. The latter include fully state-owned lands, as well as “amiri” lands, where the state retains ownership but grants usage rights for development and investment.

They also encompass “mawat” lands, unused or neglected areas requiring state authorisation to become productive and commons, which are owned by the state or municipalities but allocated for local use. Public assets, by contrast, include beaches, rivers, ports and roads, which are non-transferable and intended for general use.

Yet while this classification provides a legal structure, it fails to capture the full scale of the state’s holdings. According to Fares Abi Khalil of the Justicia for Development and Human Rights Foundation, speaking to The Beiruter, Lebanon’s state-owned land may reach approximately 852 million square metres, with an estimated value of around $50bn, noting that “these figures reflect the scale of the country’s untapped potential, though they remain estimates in the absence of a comprehensive national inventory.”

These figures, however, remain indicative rather than definitive. The absence of such a registry means that even the state lacks a precise understanding of what it owns. As Abi Khalil further notes, this gap is not only a challenge but also an opportunity, one that could serve as the foundation for a systematic reform process aimed at documenting and activating these assets.

Beyond land: A broader sovereign portfolio

Economist Jassem Ajaka argues that the scope of state assets extends well beyond real estate. In remarks to The Beiruter, he frames Lebanon’s holdings as a broader sovereign portfolio encompassing infrastructure and major public enterprises, from the Port of Beirut to telecommunications companies, as well as Middle East Airlines and the state tobacco monopoly.

“Lebanon owns more than 60,000 land plots, spanning coastal areas, vast agricultural lands in the Bekaa Valley and the north, as well as thousands of residential units in Beirut and Mount Lebanon. In addition, the country holds significant offshore oil and gas reserves estimated at over $200bn (net to the state), alongside gold reserves that exceeded $48bn at their peak in late 2025,” he says.

“What is most troubling is that state-owned assets are not recorded in modern official land registries that would allow for effective assessment and analysis. Instead, there is a significant lack of proper inventory and valuation, with these assets already constrained by inefficient bureaucratic structures. These figures place Lebanon, in theory, among asset-rich countries."

Yet the paradox lies in the fact that this wealth is offset by a financial gap exceeding $70bn, reflecting a structural failure to convert assets into liquidity or effective revenue streams.

Minimal returns, structural losses

Despite the sheer scale of these assets, their contribution to public revenues remains strikingly limited. As Ajaka puts it, “income generated from state assets accounts for no more than 2% of total government revenues, even though their value is estimated between $25bn and $45bn, excluding gold”, a gap that underscores the scale of the missed opportunity.

That imbalance becomes even more visible along the coastline. “Around 30 million square metres are effectively under private control, often by politically connected actors,” Ajaka notes, “while occupancy fees are collected on just 800,000 square metres, and even then, based on outdated valuations that bear little resemblance to market prices.”

The pattern extends well beyond the shore. “More than 500,000 square metres of railway land have been appropriated, frequently turned into residential, commercial or industrial use with no return to the state,” he adds. “At the same time, at least 239 state-owned properties in Beirut remain vacant, even as public institutions continue to rent office space at significant cost.”

Taken together, this reflects a “hidden loss”, revenue that should exist but is neither collected nor recorded, despite its direct impact on fiscal stability. World Bank estimates suggest that correcting these distortions, particularly by aligning occupancy fees with market values, could generate more than $1bn annually.

Renting what it already owns

A report by Gherbal Initiative highlights another dimension of the problem: the Lebanese state rents property on a large scale, despite its extensive ownership.

The study analysed 1,315 lease contracts across 67 public entities, revealing that government institutions pay substantial sums annually to occupy buildings. The most expensive contract is held by the Ministry of Foreign Affairs for the ESCWA headquarters in Beirut, leased from Solidere at a cost of $9.17m per year. Notably, the contract does not specify the property’s size or the price per square metre, an omission that raises serious transparency concerns.

The education sector alone accounts for 42% of all lease agreements, reflecting the heavy reliance on rented facilities for schools and university branches. Rental activity is concentrated in Beirut and Mount Lebanon, where property costs are highest.

Beyond the numbers, the report points to a complex network of relationships involving religious institutions, associations, political actors and private companies. Some contracts extend over decades, with total values exceeding $20m, further underscoring systemic inefficiencies in how public funds are allocated.

Governance failures at the core

For Ajaka, the gap between potential and reality is rooted in governance failures.

Corruption, political patronage and clientelism have transformed state assets into instruments of influence rather than sources of public revenue.

“In a functioning economy, assets such as ports or monopolistic telecommunications companies would be expected to generate returns exceeding 15%. In Lebanon, however, many state-owned enterprises struggle simply to cover operating costs. More critically, widespread customs evasion has eroded revenues, with imports once reaching around $20bn annually, compared to only a few hundred million dollars in returns,” he adds.

“The result is a system in which economic logic is routinely subordinated to political considerations, weakening the state’s ability to manage its own resources effectively.”

A legal framework without enforcement

Against this backdrop of governance failure, Abi Khalil points to a different, but equally critical, gap: not in the laws themselves, but in their enforcement.

“Legal provisions protecting public property are clear,” he notes, “but implementation is undermined by administrative weaknesses and institutional fragmentation,” a reality that continues to limit the state’s ability to reclaim and properly manage its assets.

He adds that recovering encroached properties is not only legally feasible but economically necessary, stressing that doing so would require “stronger institutions, updated records and more effective oversight mechanisms”, conditions that, for now, remain largely absent.

Sell or invest?

As Lebanon re-engages with the International Monetary Fund, the debate over state assets has become more urgent. Should the government sell these assets to generate immediate liquidity, or invest them to secure long-term returns?

Abi Khalil supports the latter approach, warning that asset sales under current conditions would result in significant losses. Properly managed investment, by contrast, could provide a sustainable source of revenue and strengthen public finances.

Ajaka goes further, advocating for the creation of a sovereign wealth fund to manage state assets independently of political interference, under internationally recognised governance standards.

From dormant assets to financial leverage

In light of these challenges, both domestic and international recommendations, particularly from the World Bank, converge on the need for a comprehensive reform strategy. This would involve moving away from fragmented management towards a unified institutional framework capable of transforming state assets into productive financial tools.

Such a strategy would begin with the creation of a centralised digital registry, followed by the revaluation of assets, the updating of occupancy fees, the strengthening of oversight and the recovery of encroached properties. It would also include expanding partnerships with the private sector through PPP models and management contracts that preserve public ownership while improving efficiency.

A critical economic moment

At a time when Lebanon stands at the threshold of a potential transition, from conflict towards de-escalation or even peace with Israel, the country faces a dual test. Political stability may open new opportunities, but economic recovery will hinge on internal reform.

State assets represent one of the few resources Lebanon already possesses. They require no external financing, only political will, institutional discipline and effective management.

As the economic toll of war comes into sharper focus, the ability to mobilise these assets will help determine the trajectory ahead, whether they are finally transformed into a pillar of recovery, or remain dormant as the country once again looks outward to offset the cost of conflict.