The Private Sector Sounds the Alarm: Immediate Actions Required
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The Private Sector Sounds the Alarm: Immediate Actions Required
An Urgent Roadmap for Lebanon’s Stability, Economic Continuity, and National Recovery (March 2026)
1. Introduction
For more than six years, the formal private sector has absorbed successive shocks: financial collapse, COVID-19, the Beirut Port explosion, the 2024 war, and now the current regional and local war. Despite this, it has sustained employment and essential services while at the same time the informal economy has been left to expand, compliant businesses have been overburdened, and policy responses have penalized formal actors.
Lebanon can no longer afford to manage crises. We are approaching systemic failure.
Our country is experiencing entirely predictable events resulting from the state’s complacency in fulfilling its core responsibilities - primarily the failure to enforce sovereignty over national territory and institutions.
This failure is impacting the economy and its cost is being paid daily by economic stakeholders and notably the private sector and the labor force.
Losses in economic output are estimated between $50 million and $80 million per day, equivalent to $2–3 million per hour and up to $2 billion per month.
Although alarming by themselves, these losses in reality come on top of the 2024 war which resulted in a GDP contraction of 6.6%–9.2% (~$14 billion) and the loss of 166,000 jobs, with 300,000–400,000 displaced. They also come on top of a nationwide economic, financial and banking collapse the catastrophic consequences of which have still not been adequately addressed.
The current escalation represents an extremely dangerous phase resulting as it does in the following estimations:
Additional GDP contraction of 10%–15%
$8–12 billion in overall losses
More than 1 million displaced people
200,000–350,000 additional jobs at risk
Unemployment potentially exceeding 45%
This is not a localized shock, it is a regional war which will have an impact on Lebanon’s ability to continue attracting its existing lifeline from remittances.
The private sector has repeatedly absorb these recurring shocks while still being expected to sustain operations, preserve employment, and lead recovery with little attention accorded by the public authorities to the most basic of its needs.
This equation is no longer viable.
The private sector represents the springboard of the economy. Private sector stakeholders are not observers. They are the primary shock absorbers and will be the leading agents of recovery. Yet they continue to be systematically and irresponsibly excluded from decision-making.
This must change!
Economic survival, stabilization, and recovery cannot be designed in isolation from those who sustain the economy and carry the burden of the compounded losses and the costs of an inflated, inefficient and unresponsive public sector. The private sector must therefore be formally integrated into national decision-making processes.
2. Severe disruption to the Economy
Severe disruption to the economy is now evident and expected to further degrade. We are witnessing a sharp decline in private sector activity, a serious contraction in trade, developing liquidity shortages which will become acute, and a widespread loss of confidence. These pressures are further compounded by rising inflation and a rapid erosion of purchasing power, collectively undermining economic stability and the ability of businesses to sustain operations and households to secure necessities.
This war may very well represent the irreversible death knell of the middle class. In summary, we are headed toward the systemic disruption of the economy as a whole.*
*Please refer to the annex for more economic data.
3. Sovereignty as an Economic Imperative
Since its inception in October 2021, the Lebanese Private Sector Network (LPSN) has consistently advocated for a clear national framework anchored in the trilogy of Sovereignty, Stability, and Prosperity. This is not a slogan - it is a necessary sequence. Prosperity cannot exist without stability, and stability cannot be achieved without sovereignty. The fact that Lebanon has been unwillingly drawn into the current war inspire of its national interests and the position of the state as well as the overwhelming majority of its citizens is a topical example of why sovereignty must be the linchpin of prosperity.
Sovereignty cannot be viewed as a subordinate good. It is indeed a matter of national economic and societal survival. LPSN therefore reiterates, with even greater urgency, that sovereignty is the first and most critical pillar of this tripod, and the foundation upon which all recovery efforts depend, failing which:
No investment will materialize and confidence will continue to collapse
Capital will continue to flee and financial inflows dry up
Supply chains will be further disrupted and costs will become uncontainable
Productive capacity will continue to deteriorate and businesses will continue to scale down or close.
In this environment, uncertainty is systemic, risk is unmanageable, and economic actors are forced into short-term and limited survival behavior.
It is impossible for any reform agenda - fiscal, monetary, or structural - to succeed in the absence of sovereignty. Policies cannot be enforced, markets cannot function predictably, and institutions cannot regain credibility.
4. Priority Actions for Immediate Implementation
The following are immediate, actionable measures required to ensure economic continuity and prevent systemic collapse:
1. National Economic Continuity Taskforce
A National Economic Continuity Taskforce must be immediately established, bringing together the Government, Lebanese Armed Forces, Central Bank, infrastructure operators, and associations representing the private sector to ensure coordinated crisis management and operational continuity.
2. Beirut De-militarized Zone
Greater Beirut must be immediately designated as a fully demilitarized and protected zone to safeguard continuity of business operations and prevent disruptions to the country’s primary economic hub.
3. Protection of Critical Infrastructure
All critical infrastructure must be immediately secured and safeguarded to ensure uninterrupted access to essential services and prevent cascading disruptions across the economy. Where necessary alternatives must be secured.
4. Immediate Relief for the Formal Economy
Immediate measures must be taken to halt additional fiscal and administrative burdens, support SMEs and affected sectors, and protect employment to preserve the country’s remaining productive capacity.
5. Housing Lebanese Citizens First
With over one million Syrian nationals still in Lebanon - many residing illegally - while Lebanese families remain without shelter, the situation is no longer sustainable. Ongoing conflict has made parts of the country unsafe, undermining the basis for continued refuge. With the war in Syria having ended, return is both viable and necessary, helping free critical housing capacity for displaced Lebanese citizens who have no alternative
6. Exclusive State Authority Over Weaponry
The Government must implement a clear, time-bound plan to enforce exclusive state authority over all weapons and dismantle all armed organizations across Lebanon, ensuring unified authority and control over security and decision-making.
7. Reconstruction Under Governance
As opposed to previous experience, reconstruction efforts must be anchored in transparency, independent oversight, and full private sector participation to ensure accountability, efficiency, and alignment with long-term reform.
These asks require alignment between the:
State (policy authority)
Lebanese Security Apparatus (security authority)
Private sector (economic continuity authority)
5. Conclusion
Lebanon’s predicament is nearing irreversibility. The private sector can no longer sustain the country under current conditions and will not accept exclusion from decision-making. There will be no recovery without the private sector, and no stability without sovereignty. The choice is immediate and unavoidable: stabilization or collapse.
ANNEX: Brief Economic Review, March 2026
Private sector activity has dropped sharply, with a decline of 70% in commercial activity, 50% across industry, agriculture, and services, and 80% in hospitality and tourism. Trade had already contracted by 21% following the 2024 shock, weakening economic resilience. External inflows have now collapsed, with tourism near zero, trade severely disrupted, and remittances from the GCC (previously $5-8 billion annually) no longer flowing.
At the same time, informal capital flight has accelerated, while emergency imports are increasing outflows. Liquidity conditions have deteriorated severely, marked by an initial liquidity gap of $5-7 billion, alongside a $4-6 billion foreign exchange financing gap, compounded by cash dollar hoarding, reduced USD circulation, and the marginalization of the banking sector.
This is further exacerbated by households and companies withdrawing liquidity from banks to secure 2-3 months of cash flow, reflecting a systemic loss of confidence. At the monetary level, the Central Bank has lost its ability to stabilize markets, increasing the risks of exchange rate overshooting and potential price shocks for essential goods.
Inflation is accelerating rapidly, driven by adhoc internal taxation measures and 20% external shocks and energy costs, with oil projected at $130 per barrel, bringing total inflation to above 35%.
The result is a system defined by severe liquidity shortages, persistent inflation, fragmented economic activity, and rapidly eroding purchasing power in an environment of continuing war, major population displacement, curtailing of essential state services and internal security threats.