Lebanon End of Year 2023 Report: Security and Economic Overview

Economic Overview

Lebanon's economy in 2023 continued to grapple with severe challenges, marking a regression back into recession. The World Bank identified macroeconomic imbalances, including a substantial current account deficit of 12.8% of GDP. The economic decline's pace may have slowed compared to 2022, but the situation remains dire with no clear path to stabilization. The crisis has significantly impacted public services, with schools struggling to operate amid teacher resignations and strikes, exacerbated by electricity and internet cuts as well as inflation. The healthcare sector is also crumbling, with a migration of medical professionals and a shortage in medicines and supplies. The National Social Security Fund (NSSF) is nearing bankruptcy, further straining Lebanon's social protection system, which suffers from large coverage gaps and chronic underfunding​​​​​​.

Security Environment

The economic crisis has had a profound impact on Lebanon's security environment. The Lebanese army and the Internal Security Forces have faced considerable challenges due to the depreciation of the local currency, leading to diminished purchasing power and morale. As a result, there have been desertions and an inability of security personnel to reach duty stations, thus reducing their effectiveness in maintaining security. This situation has led to an increase in various forms of crime, including thefts and smuggling, as economic pressures drive more people to desperation​​.

Impact of Regional Tensions

Lebanon also faced ongoing insecurity amid regional tensions and weakened international cooperation. The President of the Council of Ministers, Mohammad Najib Azmi Mikati, at the UN General Assembly, emphasized the need for filling the presidential vacancy and implementing reforms for economic recovery and political stability. He also highlighted the impact of Israel’s occupation of southern Lebanon and violations of Lebanese sovereignty, stressing the importance of cooperation with the UN Interim Force in Lebanon (UNIFIL) for peace and security in the region​​.

Environmental and Socio-Economic Impacts

The recent conflict in the region has had a considerable impact on Lebanon's socio-economic and environmental landscape. For example, nationwide restaurant activity saw a significant reduction, affecting livelihoods. Agriculture in conflict-affected zones suffered major losses due to damage to lands and contamination, impacting critical sources of livelihood in Southern Lebanese border areas. The conflict has also caused extensive environmental harm and posed ongoing risks to human health and safety​​.

Lebanon's 2023 has been marked by continued economic hardship and security challenges. The interplay between the economic crisis and security has created a complex scenario, necessitating multifaceted efforts for recovery and stability. The country's future hinges on addressing these economic and security challenges while navigating regional tensions and their socio-economic impac

Lebanon's year-end report for 2023 paints a picture of a nation grappling with profound economic and security challenges. The country, once known for its vibrant culture and diverse economy, has faced a significant recession, impacting all aspects of life. This report delves into the economic downturn characterized by currency devaluation and public service crises, along with a detailed analysis of the security environment strained by regional tensions and internal challenges. The focus is on understanding how these multifaceted issues interplay and affect the Lebanese population and the state's future trajectory.

As of the end of 2023, Lebanon continues to navigate a complex landscape of economic and security challenges. The economic situation remains in a state of recession, exacerbated by macroeconomic imbalances and a substantial current account deficit. This economic downturn is significantly impacting public services, with the healthcare and education sectors facing particular struggles due to resource shortages and migration of professionals​​​​.

Security concerns are prevalent, with ongoing insecurity amid regional tensions and weakened international cooperation. The country’s political instability, exemplified by the prolonged presidential vacancy, further complicates efforts towards economic recovery and institutional stability. Additionally, Lebanon continues to face challenges regarding the implementation of necessary reforms, with resistance from political elites who have vested interests in maintaining the status quo​​​​.

The Lebanese army and internal security forces are under strain due to the economic crisis. Real wages for soldiers have drastically fallen, leading to desertions and reduced capability to meet security needs. This situation is compounded by the large coverage gaps in Lebanon’s social protection system, which has been unable to adequately support the population amid the crisis​​.

The country is also dealing with the ramifications of regional conflicts, which have had socio-economic and environmental impacts. The ongoing war in Ukraine, for example, has led to increased food and energy prices, exacerbating the existing economic crisis and widening the gap between different income groups​​​​.

Lebanon’s future remains uncertain, with the need for urgent government formation and implementation of reforms to address the root causes of the economic meltdown. The international community continues to stress the importance of these reforms as a precondition for assistance​​.