Lebanon has all the components for a prosperous agricultural sector including human capacity, diversity of climate, fertile soil, water resources, and suitable ecological conditions. Yet, agriculture has been marginalized, underfunded, and untapped for its potential for the past 33 years in favor of other sectors resulting in a meagre 3% contribution to the GDP with less than 12% employed from the labor force because of import dependence, high production costs, and lack of protection of local produce. Furthermore, there has been a loss of 45% of agricultural land since 1970 and mismanagement of land, water, and soil resources

Lately, agriculture has been an inadvertent beneficiary of consecutive crises from the impact of Covid-19 on Lebanon to the collapse of the financial economy, currency devaluation, destruction of the grain silos in the Beirut Port explosion, and the escalating impoverishment of the population. Moreover, global factors related to climate change and the disruption of supplies have put agriculture into the spotlight as a lever for the improvement of Lebanon’s food security, alleviation of social problems, and creation of rural livelihoods.

These are clear signs that the sector is gaining importance in the imagination of the Lebanese. Some concrete examples: NGOs training farmers, young architects becoming farmers, hydroponics projects led by entrepreneurs, budding smart irrigation experiments by universities as well as initiatives from various embassies and the European Union to encourage the sector and export readiness.

Private sector enterprises and new entrepreneurs are also engaging in exploration and development of post-harvest facilities and new verticals in the agricultural economy, such as vegetables, fruit trees, seedless grapes, legumes, preserves, spirits, durum wheat products, Mediterranean herbs and spices, and other niche products.

Other opportunities lie in the adoption of cross-sectoral fertilization, organic farming, digitization, improved supply chain transparency, sustainable irrigation systems and in the upgrade of the protected greenhouse sector.

While rural areas do not account for a large share of overall GDP, up to 80 percent of the GDP of rural areas is derived from agricultural activities. Agriculture connects people with their land, their history, and their identity. Therefore, it is of paramount importance to support employment schemes in the agricultural sector to stem the escalating migration and brain drain from Lebanon.

The Food and Agriculture Organization (FAO) identified the agro-food sector as a source of growing employment in Lebanon, contributing an estimated 5 percent to GDP in 2021. The Agrofood sector employs 50,000 people, represents 18% of the manufacturing sector and makes up 25% of all national exports.

While the sector generates 2 billion US Dollars in annual revenues, it remains relatively untapped with a potential to grow exponentially. Innovation needs of the sector have not been met by the necessary political support that could have boosted the sector in the past three years. Political unrest and loss of public order and markets since 2019 further aggravated the situation resulting in export restrictions and hesitation to invest in this sector.

In addition, lack of access to finance has further hampered the sector’s expansion, disrupted the supply chain, and slowed the modernization of equipment whilst decreasing working capitalThis hindrance coupled with the absence of infrastructure and basic services like electricity and water as well as inadequate technical workforce development have all contributed to slowing down the progress of this promising sector.

Processing firms, that constitute more than 1200 businesses, face specific challenges, namely gaps in supply chain infrastructure, inadequate primary processing, lack of storage and distribution facilities, insufficient linkages between producers and the market, inability to forecast fixed and operational production costs, as well as labor and skills shortages - especially for semi-skilled and skilled practical workers.

In terms of employment potential, there is a rise in demand for workers with advanced entrepreneurial, technical and managerial abilities, a digitally savvy workforce with marketing and business expertise and workers knowledgeable of quality assurance procedures and equipment maintenance.

Given the country’s production knowledge, seven complex target products in the foodstuff communities are attainable. The sector has proven export potentials in areas such as meat and poultry products, beverages, spirits and wine, olive oil, dried fruits, nuts and heritage foods, artisanal chocolate, and dairy products

Lebanon is in its fourth year of a deep economic, political, and social crisis. According to the World Bank, the Lebanese crisis ranks among the “most severe crisis episodes globally since the mid-nineteenth century,” and is the product of decades of deliberate reckless fiscal and monetary policies, in addition to a crippling refugee crisis where the country has the highest refugees per capita in the world.

In fact, the economy remains in decline. Policy-making initiatives are introduced piecemeal and on an ad hoc basis. Crisis management decisions are inadequate, geared towards the short term, often skewed towards the protection of vested interests, and do little to support a comprehensive and equitable recovery plan. This dysfunctional situation continues to perturb the private sector while increasing socio-economic inequalities and frustrating the law-abiding business community and enterprising individuals.

The crisis has also had a devastating impact on the provision of public services at all levels

The Lebanese state - represented by its different ministries and departments - must assume the difficult task of elevating the country up to the standards of a functioning Nation-State by managing revival and growth through a solutions-based approach away from the prevailing “ruling regime logic”. This is best accomplished through capitalizing on the country’s comparative advantages to design and implement a comprehensive national strategy. The strategy would create an environment conducive to business that utilizes the concepts of product space and smart specialization within an updated and reformed regulatory and legal framework.

It is essential to protect the law-abiding private sector in its capacity as the main pillar of the Lebanese formal economy and its driving force whilst curtailing and forcefully opposing the growing unlawful, informal, parallel, and illegal economies.

Cultural and Creative Industries (CCIs) have become a significant part of the Lebanese economy. Lebanon’s creative industries encompass several sectors, namely:

Media in all its components: TV, cinema, radio, music production, and publishing.

Art and Design which include advertising, graphic design, architecture, jewelry, fashion, photography, creative writing, performing arts, visual arts and crafts, in addition to sports and cultural heritage.

Before the 2019 economic crisis, CCIs accounted for almost 5% of the country’s GDP, a market value of more than $2 billion, and 4.5% of national employment, with an average annual growth rate of over 8% and an estimated number of direct employees above 60,000. In 2020, 60% of freelance creative workers in Lebanon have had a 75% drop in their earnings. This drop combined with structural deficiencies, namely a high degree of informality and lack of access to the state’s safety nets and medical insurance, impair the livelihoods of creative workers. A mutual fund for the insurance of artists was passed by legislators in 2012 under Act No. 7535/2012, but it has not yet taken effect.

Skills gaps, the small size of the domestic market for crafts and CCI products, regulatory barriers on cultural and creative exports, and difficulties in accessing international markets pose another set of challenges to CCI entrepreneurs and MSMEs. In addition to the brain drain resulting from economic crises, regulation of intellectual property rights is outdated (existing law dates from 1999) and needs to align with international standards. Additionally, there is a marked absence of governmental support: the Ministry of Culture’s budget is 0.21% of the country’s budget (2020). The global norm is a minimum of 1% and there’s a lack of support for educational assets such as conservatoires, fine art faculties, and performing arts venues in the regions.

However, CCI has a seriously untapped economic potential, it contributes to the soft power of the nation, enhances its image and is a valuable contributor to the economy and job creation. CCIs Employ more people aged 15 to 29 than any other sector. With optimal planning, 20% of Lebanon’s working population can become employed in CCI.

In the Global Knowledge Index, Lebanon ranked eighth in the volume of cultural and creative exports. Lebanese cultural and creative exports have notably risen in the economic crisis when expressed as percentage of the (massively contracted) GDP, more than doubling from pre-crisis values of 0.33% and 0.37% of GDP in 2017 and 2019. Add to that the increasing international recognition of Lebanese designs (fashion, furniture, art, and digital design), particularly considering the growth of digital platforms in the region.

The growth of remote work and an expanding network that links international and diaspora clients to Lebanon as an outsourcing destination is generating new freelance and remote employment opportunities for Lebanon’s creatives and price-competitive designers.

For artisans, freelancers, and MSMEs in the labor-intensive creative industries, the depreciated currency has opened windows of competitive pricing of skilled labor and cultural products and services.

Specific CCI subsectors, such as publishing, jewelry, precious stones, and metals sectors, have demonstrated their significant potentials by achieving positive external balances

Owing to its geography, social makeup, weak institutions, and a general disregard for the preservation of the public good, Lebanon has unfortunately become a magnet for foreign intervention in its internal affairs. This has resulted in the country becoming a lightning rod for regional tensions and has been a site of proxy warfare conducted by external actors on its territory – much to the detriment of its population’s wellbeing.

The second half of the 20th century was characterized by the accelerating collapse of the Lebanese state leading to regionally sanctioned agreements concluded generally at the expense of sovereignty and the rule of law. Among the unusual consequences of these arrangements is the growth of paramilitary actors beheld to foreign powers. During the last few years, Lebanon has come the closest in its history to turning into a failed state. It has lost the elements that constituted its comparative advantage in the region and with them the support of many of its traditional friends and trading partners in the international community. The country is viewed as a chronic problem that needs management rather than as a partner and responsible member of the international community.

In this regard, espousing positive neutrality constitutes a clear and perhaps exclusive path toward reconciling Lebanon’s foreign positioning with its core national interests by breaking the alignment of local actors with foreign powers. The Network has taken a clear stance on Lebanon’s neutrality which it has defined as being a National Imperative.

Due to its sovereign deficit, porosity of its borders, and shortsightedness of its leaders, the country is in the throes of a devasting refugee crisis as it hosts the highest number of refugees per capita on the planet with almost 40% of the country’s residents being refugees-mainly Syrians and Palestinians. Appropriate solutions in line with the Lebanese Constitution need to be negotiated with the international community by an assertive government of patriots. This objective of the return and third country repatriation of refugees present on Lebanese territory has the full support of the Lebanese people including the business community and private sector at large.

Lebanon’s extensive diaspora is key to achieving most of the country’s self-evident policy objectives. They play a critical role in support of Lebanon’s call for neutrality, enhanced security, promotion of bilateral and multilateral trade, channeling of investments, and establishment of the home country as a center for tourism, culture, and as a hub for business. Through the vast diaspora’s influence on the political process and their vote in their countries of residence, this important resource and effective lobby group can be solicited and engaged as agents for public diplomacy in support of Lebanon’s national interests.

Lebanon’s forestry sector is rarely included in economic discussions. However, the sector has a long history of sustainable job creation and, if formalized and developed properly, has a huge potential in creating jobs and developing local economies, especially in rural areas.

Overall, 25% of Lebanon’s surface area is covered by either dense forests or other wooded lands. Although highly dominated by unstructured business activities, today the sector provides job opportunities for hundreds of thousands of families, including among others more than 25,000 individuals working yearly in seasonal reforestation work; around 50,000 individuals in forest management, pruning and harvesting activities; more than 6,500 beekeepers; 30 registered tour operators and hundreds of local rural tourism guides; around 100 pine processing facilities; thousands of herb and medicinal plant collectors; hundreds of charcoal producers; in addition to the recent development of composting, briquette and pellet production as well as essential oil extraction that is engaging a large number of youth.

Lebanon’s forests sequester carbon yearly for an estimated value of $14 million and reduce air pollution and health bills by around $2 million. Rural tourism calculated in 4 forest nature reserves only amounted in 2020 to $15 million and is experiencing a positive trend since then. Forest honey production is generating yearly revenues of around $25 million and pine nut production is estimated at around $1-2 million/year.

The sector is however facing serious setbacks starting from the lack of data and absence of business registration and reporting, leading to a major underestimation of the sector’s actual and potential contribution to the local economy. Technical skills and formal education in the sector are also still lacking which affects the sector’s ability to develop. Most of the current activities happening in Lebanon’s forests are illegal, including overharvesting, illegal logging, unregulated grazing, and illegal quarrying activities, in addition to the unmanaged forest fires, all of which are leading to loss of resources on different levels, some of which is irreversible. Administrative challenges are also hindering the sector’s development, such as the lack of a final survey for more than 40% of Lebanon’s lands, and the division of authority between several ministries that delays and complicates the decision-making process.

Yet, there have been serious efforts to move the forestry sector forward. Current forestry actors are working hard on developing national guidelines and improving the technical know-how, engaging youth in the sector, highlighting the positive role of women, and mobilizing communities to understand the value of this precious resource. Innovative start-ups have been developed by youth and have shown several success stories that are promising for future economic development in the sector.

Healthcare in Lebanon contributed around 8.8% of the GDP - 54% of which was by the private health sector. Lebanon has 150 private and public hospitals, 5000 registered physicians, 4000 private pharmacies, and 12 pharmaceutical manufacturing sites with local production contributing 8% of the 770 million US$ market size dominated by imports.

Prior to the economic crisis of 2019, the healthcare system was already overwhelmed by a lack of a centralized reimbursement system as well as stark disparities between public and private healthcare facilities.

The ongoing crisis further exhausted an increasingly fragile system leading to a shortage of pharmaceuticals and medical supplies, contraction of pharmacies by 15%, massive brain drain of the healthcare workforce (1000 doctors and 2000 nurses) and the population’s sharply reduced ability to pay for escalating health costs and medications.

On the upside, reliance on primary health care by refugees and Lebanese citizens shot up from 20,000 visits pre-crisis to 200,000 in 2022. In line with a 35% increase in demand for locally produced pharmaceuticals.

Today, over 80% of the population has neither healthcare coverage nor access to quality healthcare. All public services, including the National Social Security Fund (NSSF), have not readjusted their real tariffs since the Lebanese pound’s devaluation. The lack of NSSF and government co-payment coverage, combined with the rising costs of hospitalization, have led to significant out-of-pocket expenses for hospital services, endangering access to care for the underprivileged and the uninsured Lebanese population.

Absence of financing schemes for primary health care and lack of incentives for local pharmaceutical manufacturers have forced Lebanese companies to exit the local market only to be replaced by illegal parallel trade and counterfeit medications (often smuggled) representing a big threat to public health.

Lebanon's hospitality and tourism sector significantly impacts job creation, foreign currency earnings, and economic growth. In 2018, it contributed $10 billion or 19.1% of the GDP, the Middle East’s 2nd highest ratio. It also created 144,000 direct jobs, constituting 36% of total employment. The hospitality industry experienced rapid growth, averaging 10% annual growth from 2014 to 2019.

Since 2019, the sector has encountered various challenges, including the pandemic, political instability, power cuts, pollution, rising costs, inadequate planning, insufficient infrastructure, Syrian refugee impact on security, GCC embargo and Beirut Port explosion damage, to mention a few. Crisis-driven tourism disruptions and inconsistent public policies affected promising niche tourism sectors like religious, rural, wellness, aesthetic, environmental, and adventure tourism, leaving operators relying heavily on short seasonal business from well-off leisure and business travelers, middle class travelers from nearby Arab countries as well as visitors from the Lebanese diaspora.

To boost Lebanon’s tourism sector, it is crucial to implement support measures with both short-term and long-term impacts. Public-private collaboration can boost the hospitality sector, generating over 100,000 potential jobs in three years

The development of industrial production in Lebanon offers significant potential for job growth and has the ability to address the long-standing trade imbalance.

With a cumulative labor force of 195,000 Lebanese full-time employees, the manufacturing industry has played a pivotal role in shaping the real economy despite major challenges and lack of state support. Lebanon’s industrial energy cost is the highest in the world, the country’s infrastructure is decaying, and industries have a near zero access to finance. Lebanon’s workforce needs urgent development and training.

Cumbersome customs requirements, red tape, and insufficient legal protection curtail business activities and threaten the survival of manufacturing facilities.

Perhaps the most serious challenge to the sector has been the rise in informality, unfair product and labor competition, and disparity in duty and tax collection thereby penalizing law-abiding progressive manufacturers. There is also a shortage of meaningful and accurate data to help industrialists and policymakers diagnose and address challenges on all levels.

And yet, Lebanese industrialists have adapted, maintained production levels, invested in innovation, research, development, and technology, developed new products, and created sustainable jobs in an increasingly digitized world economy. Against all odds, Lebanese industry has developed a range of local products (in substitution for imports) and has even increased export volumes.

Industrialists in Lebanon possess untapped exporting potential worth billions of dollars in various sectors, including Agrofood, pharmaceuticals, jewelry, clothing, furniture, leather, and electrical and industrial equipment.

Lebanon faces significant challenges in advancing its knowledge economy, trailing behind in various key areas. The nation ranks 139th in terms of its enabling environment, 161st in broadband speed, 105th in talent retention, and 92nd in innovation. Despite these current setbacks, it's crucial to note that, on the eve of the crisis in 2019, Lebanon secured the 10th position globally for the ease of finding skilled employees, 23rd for digital skills, 24th for the skill set of graduates, and 4th for the quality of Math and Science education.

The development of a thriving Knowledge Economy in Lebanon holds paramount significance for the nation's socio-economic growth. It builds upon a history of educational excellence, a highly skilled workforce, and notable achievements in research and development. This document presents medium-term policy recommendations that are pragmatic, attainable, and quantifiable, even amidst the recurrent crises and financial challenges confronting the nation.

These recommendations span multiple domains, including education and research, investment incentives, entrepreneurship, e-Government, infrastructure, and evaluation. By centering efforts on these fundamental aspects, Lebanon can navigate through the crises and cultivate an environment that nourishes innovation, research, and knowledge.

The real estate sector in Lebanon accounted for 14-20 % of GDP on average between 2004 and 2016. The founding of the Lebanese Company for Development and Reconstruction of Beirut Central District (Solidere) in 1994 was integral to the post conflict trajectory of Lebanon as a service-driven economy. This contributed to the GDP, positively affected the tourism sector, and attracted significant domestic and foreign investments (Diaspora and GCC) as well as state and quasi state support.

Unfair competition between established legally registered real estate developers and new illegal entities backed by powerful oligarchs, political figures associated with bankers, and those involved in questionable financial activities - including alleged money launderers - created an imbalance that not only disrupted the market equilibrium, but also raised concerns regarding governance legality, and the ethical foundation of the business landscape. Moreover, it deprived the government of vital financial flow by bypassing customs and taxes. This imbalance led to market distortions affecting quality, price, and availability of real estate options.

Moreover, use of technically obsolete and noise-polluting construction machinery, insufficient safety measures on project sites, corner cutting in many post-conflict developments, and reliance on informal labor involving non-Lebanese workers boosted profit margins further at the expense of public and employee safety.

Accordingly, the correlation between real estate and sustainable employment has been very weak. The share of the blue-collar Lebanese workforce in this sector never exceeded 0.4% favoring foreign and informal labor whose earnings were mostly channeled to their home countries.

Cautionary voices warned at the time that while the subsidy strategy for real estate was propping up the economy, it carried a high risk of bringing about a rentier economic structure while discouraging investments in productive sectors.

Real estate investments also fell short of contributing to the achievement of sustainable development goals due to the cyclical overproduction of housing units in periods such as the early 2010s, and failure to develop green urban spaces, efficient public transportation, and other urban infrastructures.

The lack of urban planning and zoning guidance specifically to cater to the needs of the middle class and first time home buyers created an affordability prices, social and environmental degradation.

While the real estate market attracted regional and expatriate buyers up until the 2010s, much of the appeal to Arab buyers has declined in the past 15 years. Competing with other property destinations around the Mediterranean was further hindered due to the country’s political, social, and economic instability.

Notwithstanding, new real estate development and property management opportunities exist if there are measures to prevent the use of development as a money laundering conduit.

These opportunities are as follows:

• Refurbishment and reconstruction of unsafe and dilapidated apartment buildings in Lebanon including those resulting from the August 2020 port explosion.
• Redesigning of urban infrastructures with the aim of energy preservation in pursuit of climate targets.
• Upkeep projects in collaboration with the Ministry of Culture and the Department of Antiques to ensure heritage preservation and cultural integrity in cities and towns.
• The creation of much needed urban green spaces in alignment with UN Habitat targets.

Lebanon is paying astronomical costs in terms of environmental damage and public health due to its absence of a comprehensive and practical solid waste management plan. In 2020, the Borj Hammoud/Jdeideh landfill reached capacity and ceased receiving waste. As a result, garbage piled up on the streets of Beirut and the neighboring regions, reminiscent of the trash crisis of 2015.

With 5.6 million residents, Lebanon generates 2,040,000 tons of municipal solid waste (MSW) annually, out of which ~52.5% is composed of organic materials, 27% of paper/cardboard and plastics and 9% of glass and metal.

The generation of MSW per person is thought to vary from around 0.8 kg/p/d in rural regions to approximately 1.2 kg/p/d in urban areas, with a weighted national average estimated at approximately 1.05 kg/p/d. The country as a whole is expected to witness an annual increase in solid waste production of 1.65% due to the presence of 2m refugees living in the country.

Public or private haulers collect almost all the MSW generated in Lebanon. Methods used to manage the waste vary depending on the location: 8% is recycled, 15% is composted, 51% is landfilled, and 26% is disposed of in open dumps

Relying solely on landfills without a complete solid waste management strategy is quite expensive. According to the Garbage Management Coalition, each ton of solid garbage managed in Lebanon costs $154.5 USD. In contrast, the amounts spent by Syria, Jordan, and Algeria are $22.8, $21.55, and $7.22 respectively. While Jordan and Tunisia spend between $48 and $54 million annually on solid waste management, Lebanon spends over $420 million annually in comparison

Implementing better waste management techniques like composting and recycling could result in annual savings of almost $100 million. Currently, landfills and open dumps receive around 80% of solid waste while experts estimate that only 10–12% cannot be recycled or composted.

In 2017, Human Rights Watch looked at the health issues brought on by an increase in open solid waste burning because of inadequate waste management practices. People who lived in the locations where garbage was burnt in open dump sites reported health issues such as asthma, chronic obstructive pulmonary disease, coughing, sore throats, and skin disorders. Open garbage burning produces air pollution that can expose humans to carcinogenic substances and has been related to heart disease and emphysema.