Lebanon's struggling economy is being further battered by fears of war between Israel and Hezbollah [de299d33]. The conflict has led to a significant drop in customers for businesses, with cafes experiencing an 80% decrease in footfall [de299d33]. Tourism, which accounts for 20% of Lebanon's GDP, has also been severely impacted, with many countries advising their citizens not to visit Lebanon and airlines cancelling flights [de299d33]. Lebanon's current reserves of food, fuel, and medicine are only enough for two to three months, causing concerns about food security [de299d33]. The government is working with private partners to increase shipments of basic commodities, but the banking system paralysis is creating obstacles [de299d33]. Insurance companies for the maritime shipping industry have started charging premiums or lifting war coverage, resulting in an inflation of consumer goods prices [de299d33]. Lebanon's financial woes began before the conflict, with the country already facing a severe financial crisis, a devalued currency, high poverty rates, and a ruined central bank [de299d33]. The implementation of reforms needed to rebuild the economy has been slow [de299d33]. Despite the challenges, some business owners, like Yara Adada, are determined to stay and help the economy, although they worry about the impact on their employees and other stores [de299d33].
The recent conflict between Israel and Palestine has had a significant impact on Lebanon's economy, causing a 25% decrease in economic activity [238b50db]. The spillover effects include disruptions in trade, tourism, and investment, as well as increased costs of imports and inflation [238b50db]. Lebanon, already facing a severe economic crisis, has been further burdened by the conflict [238b50db]. The country's fragile infrastructure has been damaged, and businesses have suffered due to the closure of borders and the decline in consumer spending [238b50db]. The conflict has also led to a decrease in foreign direct investment and a loss of confidence in the Lebanese economy [238b50db]. The article highlights the urgent need for international support and assistance to help Lebanon recover and rebuild its economy [238b50db].
Lebanon is facing an economic crisis with a 50% decline in GDP since 2019 and 80% of the population living in poverty [02346373]. A war with Israel would be catastrophic for the country [02346373]. In 2006, during the last war with Israel, Lebanon had a fully functioning economy, a functional banking system, and a government in place [02346373]. However, the situation is different now, with Lebanon being without a president for a year and a functioning government for almost two years [02346373]. The currency has lost more than 90% of its value since 2019 [02346373]. Lebanon relies heavily on remittances from the diaspora, which account for more than a third of GDP, but a full-blown war would make it difficult for the diaspora to continue sending remittances [02346373]. The financial crisis has led to a lack of investor confidence, a decline in foreign investment, and harm to the tourism sector and agriculture [02346373]. Public services, including hospitals and emergency response, have been severely affected by the crisis [02346373]. The health-care system is struggling, with doctors and nurses leaving the country [02346373]. The military is also facing challenges, with soldiers having to take on second jobs to make ends meet [02346373]. Lebanon has received foreign funding for its army, but the needs are still immense [02346373]. Economic and financial collapse are still possible even if war doesn't break out [02346373].
Lebanon's higher education sector is also facing significant challenges amidst the country's devastating economic crisis [390b54de]. The Lebanese pound has lost 98% of its value, and the unemployment rate among young people has reached almost 50% [390b54de]. Students are facing access and affordability issues, research is going unfunded, and there is a massive loss of wages in the sector [390b54de]. Academic and administrative staff have suffered substantial salary cuts, leading to brain drain and reduced teaching quality [390b54de]. Private universities have increased tuition fees, making it unaffordable for many students to continue their studies [390b54de]. Despite these challenges, Lebanese universities have shown resilience and continue to perform well in global rankings [390b54de]. Some universities have set up innovation centers and partnered with international enterprises to support entrepreneurial initiatives [390b54de]. The Lebanese Ministry of Education has launched a five-year plan to reform the higher education sector, but it has been criticized for its generic nature and lack of reference to the current crises [390b54de]. Other policy initiatives, such as HOPES-LEB, aim to address funding, student support, teaching practices, and capacity-building [390b54de]. Lebanese universities play a crucial role in the renewal of the country and deserve national and international support [390b54de].
Saudi Arabia has provided $10 million in financial support to Lebanon to fund urgent development projects amid the country's economic and political crisis [93a047ab]. The support comes through the King Salman Humanitarian Aid and Relief Centre and the Higher Relief Commission [93a047ab]. The Saudi ambassador in Beirut, Walid Bukhari, stated that 28 projects will be implemented in various Lebanese regions [93a047ab]. Lebanon has been suffering from an economic collapse for five years, with the majority of its population below the poverty line [93a047ab]. The economic crisis has led to inflation of over 170% and has severely affected sectors such as construction and infrastructure [93a047ab]. The International Monetary Fund (IMF) has reached an agreement with Lebanon for the implementation of economic policies that could unlock $3 billion, but the reforms have been delayed [93a047ab]. The European Union has also announced a one billion euro financial package for Lebanon [93a047ab]. The World Bank has approved a $34 million project to restore public financial management and granted $300 million for the Social Safety Net Project [93a047ab]. Saudi Arabia's support represents a gesture of regional solidarity and aims to promote stability and development in Lebanon [93a047ab].