Lebanon's economy—not battlefield—may have the final word

Implementing UN Security Council Resolution 1701 would, of course, help, but leaked documents from US President-elect Donald Trump's team suggest the situation in Lebanon has outpaced the Resolution. 

Immediate and serious financial support will be essential to salvage what remains of Lebanon and revive its economy, but this will not happen until there is political stability, which—in the first instance—means electing a president and forming a government. This cannot happen soon enough.

Once formed, the new administration must not be hindered by the kind of protests seen in the aftermath of the 2006 war, with so-called "battlefield camps" in central Beirut. A bailout from the International Monetary Fund will only be forthcoming under stringent conditions. The government must be allowed to work towards these.

Signs of foreboding

The spectre of civil war has long dangled over Lebanon, no more so than today. Most of the country's Shiites have been displaced. With Hezbollah decimated and with their communities and livelihoods bombed, this sizeable population feels vulnerable. 

At the time of writing, more than 3,500 people had been killed by the Israeli military in Lebanon during this most recent conflict, and while some economic losses may be recoverable over time, lives cannot. In addition, almost 15,000 have been injured—some terribly. Many will bear permanent disabilities and burns. Beyond injuries, more than a million have been forced from their homes and villages. 

Many will never be able to return, with 40 villages having already been wiped off southern Lebanon's map. The World Bank recently estimated that 100,000 homes had been destroyed in whole or in part. The repair bill will cost around $8.5bn, roughly half Lebanon's (currently depleted) gross domestic product (GDP).

The social, demographic, and economic imbalances resulting from their integration into host communities will have far-reaching consequences. The national economy will need to be rebuilt. The World Bank assessed damage across seven major sectors and projected a 6.6% decline in GDP, adding to the 34% contraction since 2019.

Livelihoods have been destroyed in more than 40 towns and cities in southern Lebanon and Beirut's southern suburbs, with thousands of commercial units damaged. Around 280,000 people are thought to have lost their jobs. The agricultural sector has suffered extensive damage. Large areas of farmland and olive groves have been burned, although no comprehensive assessment of the losses in the Bekaa and Baalbek regions has yet been conducted.

Household battlefields

The 2006 war lasted a month, with around 1,100 Lebanese killed. Israel's destruction of property was devastating but limited. If the current fighting continues for another two months at a similar rate, around 200,000 homes will have been destroyed, equivalent to the damage wrought by the earthquake in Turkey and Syria in early 2023. 

Economic losses will top $17bn—equivalent to Lebanon's entire GDP. By contrast, Israel's GDP is $528bn, with foreign currency reserves of $216bn. Lebanon's bankrupt state will struggle to provide relief for all the displaced, let alone feed them in shelters. 

This financial and social suffocation, compounded by Lebanon's grey-listing by the Financial Action Task Force (FATF), is likely to spark internal conflict and living crises once a ceasefire is reached or earlier if a resolution is not forthcoming. This offers the unedifying prospect of "battlefields" within households.

The worst may be yet to come.