Lebanon’s private sector demonstrates resilience through innovation and exports, but lasting recovery ultimately depends on security, stability, and economic reforms.
Lebanon’s private sector against the odds
From small businesses struggling to survive to major companies repositioning themselves both domestically and internationally while expanding into Gulf markets, Lebanon’s private sector has emerged as a story of resilience defined by determination, adaptability, and innovation in the face of economic collapse and institutional paralysis. Against this backdrop, amid alternating waves of imported and domestic inflation and mounting tax burdens, a glimmer of hope has appeared with the resumption of Lebanese exports to Saudi Arabia and the United Arab Emirates’ decision to lift its travel ban on Emirati citizens visiting Lebanon. What lies ahead for the sector, and what challenges does it continue to face?
There is broad consensus that security stability is the key to reviving Lebanon’s economy. Without it, there can be no economy, investment, production, or exports. Today, following the “Follow-up Agreement” aimed at achieving security stability with Israel, the Saudi market has reopened its doors to Lebanese exports. According to former Minister and President of the Economic Organizations, Mohammad Choucair, speaking to Nidaa Al Watan, “Saudi Arabia is the largest market for Lebanese exports. Throughout the five-year Saudi import ban on Lebanese goods, which began in 2021, that market continued to expand, while Lebanese industry also improved significantly.” Now, following the departure of the first export shipment to the Kingdom a week ago, it can be said that the export process has officially resumed.
At the same time, the Beirut and Mount Lebanon Chamber of Commerce, Industry and Agriculture, chaired by Choucair, is working on a strategy centered on participating in every international trade exhibition held in Saudi Arabia. He revealed that “simply having a Lebanese pavilion and raising the Lebanese flag is enough to introduce Saudi consumers to Lebanese products and newly developed product lines.” In Choucair’s view, “this is an extremely important step because it represents the most effective way of reintroducing Lebanese products into the Saudi market.” He expects total bilateral trade between Lebanon and Saudi Arabia, including both imports and exports, to reach $1.5 billion.
Following Saudi Arabia’s import ban, many Lebanese manufacturers expanded abroad to maintain access to the Saudi market by supplying it with Lebanese products from neighboring countries. Choucair explained that “factories that had previously relied on Saudi Arabia for exports established production facilities in neighboring countries such as Jordan and Oman after the import ban was imposed, while many others even relocated part of their manufacturing operations to Saudi Arabia itself.” The number of such factories exceeds 100. He further stressed that “the value of Lebanese exports to Saudi Arabia ranged between $450 million and $500 million, not merely $250 million, bearing in mind that these figures exclude exports of haute couture, diamonds, and gold.”
It is also important to note that Saudi Arabia’s decision to reopen its market to Lebanese products, following the installation of new scanning equipment and the tightening of inspection procedures, extends beyond increasing export volumes. It also carries significant symbolic value by restoring the confidence of other countries in importing Lebanese goods. Nevertheless, there remains a substantial imbalance between imports and exports. Lebanon’s annual imports stand between $19 billion and $20 billion, while exports amount to approximately $3.4 billion, reflecting a considerable trade deficit.
The return of Lebanese exports to Saudi Arabia will not occur as rapidly as it did in the past but will instead take place gradually. Food products, fruits, and vegetables are expected to recover first, given the absence of genuine alternatives for consumers seeking Lebanese agricultural produce.
Regarding the UAE’s decision to lift its travel ban on Emirati citizens visiting Lebanon ahead of the summer season, Choucair described it as “a well-timed decision, particularly since Lebanon welcomed a number of Emirati tourists last year, who visited destinations including Byblos and Beirut. We hope to see even larger numbers this summer.”
A confidence boost for industry and agriculture
For his part, Vice President of the Lebanese Food Industries Syndicate, Mounir Bsat, told Nidaa Al Watan that the reopening of the Saudi market represents “a significant vote of confidence and a strong morale boost for both the industrial and agricultural sectors, given the substantial volume of exports that previously flowed to this market, while also acknowledging the market’s continued growth during the absence of Lebanese products.” However, he emphasized that “regaining Lebanon’s previous market share will neither be easy nor swift. It will require considerable efforts from the private sector, supported by government assistance and facilitative measures.”
Challenges facing overland trade
The reopening of the Saudi market carries additional importance because it will also revive overland exports to the rest of the Gulf through Saudi territory. However, this route continues to face several obstacles. As explained by Vice President of the Association of Lebanese Industrialists, Ziad Bekdache, these include transit requirements stipulating that trucks must be no more than 20 years old, drivers must be either Lebanese or Saudi nationals, and there is still no clear mechanism for obtaining the required visas.
Efforts are currently underway to resolve these issues by seeking a temporary 2-year exemption for Lebanon from some of these conditions until the country’s transport fleet can be modernized, particularly since approximately 90% of Lebanese trucks are more than 20 years old.
Overland shipping nevertheless remains significantly less expensive than maritime transport, especially given the continued disruption of shipping through the Strait of Hormuz for most cargo. Bekdache noted that “the cost of shipping a container by sea has risen from $2,500 to $6,500, prompting exporters to suspend shipments to Kuwait and Qatar.”
These challenges form part of a broader crisis that Lebanon’s private sector has endured since 2019, amid successive economic shocks, security tensions, declining purchasing power, and persistent political instability.
Resilience... A relative concept
Bsat argues that “resilience is a relative concept. It ranges from maintaining minimum production levels and preserving employment despite significant revenue declines to operating on reduced working hours and downsizing the workforce.” These measures have affected most industrial enterprises, particularly those damaged by military attacks.
In addition, government-imposed fees, such as additional charges on gasoline and imported goods ranging between 1% and 3%, placed an extra burden on businesses. These measures were described as “catastrophic” in terms of their timing because of their adverse impact on the competitiveness of Lebanese products. However, the subsequent suspension of the decision helped mitigate its consequences.
According to Bsat, the future resilience of Lebanon’s private sector ultimately depends on security and political stability, the existence of a clear government strategy to support businesses, and efforts to reduce tax and operating costs. Otherwise, the risks point toward further economic contraction and continued job losses. For successful resistance against all obstacles is not only military, it is also economic, embodied by the determination of entrepreneurs and industrialists who continue to believe in their country and in their economy’s ability to recover and move forward once again.
