Exiting Trade Deficits: Does Lebanon Have What it Takes?        

In the popular imagination, Lebanon is a country that has no resources, and the Lebanese state is a state that lacks ‘fundamentals’. Hence, Lebanon cannot be self-sufficient, and must rely on the outside world. However, the facts say otherwise, and the real story of Lebanon is completely different. Lebanon has the potential to be an industrial nation, and despite the fact that it has never been like that since its modern establishment in 1920, the Lebanese economy has every capability to transform to a real productive economy instead of rentier one, and to rely on local manufacturing instead of external sources like remittances and foreign aid. So how can Lebanon reverse its chronic (goods) trade deficits? How can its economy transform to an export-oriented economy? What resources does Lebanon have? What real assets does the Lebanese state possess? Can the Lebanese state emerge from financial bankruptcy without relying on external support, or the backup from International financial institutions? This note tries to show the way forward. It is worth mentioning that we are going to exclude any discussions of oil and natural gas reserves which Lebanon potentially own in the Mediterranean basin, as these reserves have not yet been proven.

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