Research
62 publications by the Orion partners, organised in 10 divisions. Choose a division to open its library; every document carries a short abstract and is free to download.
The library
Independent analysis by Nicolas Photiades and Dr. Ghassan Chammas, from monthly briefings written during Lebanon’s crisis to a scale for the Arab sovereigns below investment grade. Choose a division on the left, or start with one below.
- Sovereign risk 25 publications The Arab sovereigns rated below investment grade, read on a single scale: categories, scoring matrix, rankings and a recovery road map for each of sixteen countries.
- Stock exchanges review 1 publication Market-wide reviews of Arab stock exchanges: every listed company scored on audited fundamentals, independently of the sovereign rating, with its sector effect and Sharia qualification. One section per market.
- Banking crisis and depositors 9 publications The collapse of Lebanon’s banking model, capital controls, de-risking, insurance and the long dispute between banks and depositors.
- Capital markets and ratings 7 publications Credit ratings and the sovereign ceiling, corporate bonds, the Beirut Stock Exchange and the Capital Markets Authority.
- SMEs and alternative finance 5 publications How Lebanese companies can finance themselves after the banks: risk profiles, rural entrepreneurship, scoring and transparency.
- Islamic finance 1 publication Sharia-compliant financing vehicles and their use for industry and investment.
- Public policy and privatisation 9 publications Privatisation, sovereign wealth funds and the governance of water — the public decisions that shape private investment.
- Food, water and the social economy 3 publications Food insecurity, water priorities and the cost of living: the economy as households experience it.
- Marketing and strategy 2 publications Brand building, mental availability and digital marketing in the Middle East and North Africa.
- Investment Contextual Report 23 publications The complete monthly series, February 2022 to February 2024: twenty-three four-page briefings on Lebanon’s finance and investment climate.
Sovereign risk
The Arab sovereigns rated below investment grade, read on a single scale: categories, scoring matrix, rankings and a recovery road map for each of sixteen countries.
Economic Recovery Road Map series, September 2026
Sixteen Sovereigns, One Scale
The Arab countries below investment grade — categories, scoring matrix, rankings and the population behind the numbers — Nicolas Photiades
- PDF, 33 pp.
Sixteen Sovereigns, One Scale — compendium
Consolidated edition of the series
This consolidated edition assesses sixteen Arab sovereigns rated below investment grade or unrated on a single scale. It reads each through five pillars, including a social-resilience pillar weighted at 15 of 100, and sets twenty-one threshold indicators. Morocco and Jordan sit in Category 1; eight sovereigns in Category 2; Libya and Somalia in Category 3; Lebanon, Syria, Yemen and Sudan fall beyond the scale.
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- PDF, 113 pp.
Sixteen Sovereigns, One Scale — complete edition
All sub-regional compendia and country road maps in one volume
The complete edition of the series brings together the general report, four sub-regional compendia (Levant and Mesopotamia, Arabian Peninsula, Horn of Africa and Red Sea, North Africa) and sixteen country road maps. It places each sovereign in one of three categories, or beyond the scale, using a five-pillar weighted scoring matrix, and sets out a sequenced economic recovery road map to each country's next category.
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- PDF, 9 pp.
Categorisation of Arab sub-investment-grade sovereigns
General report: three categories and the states beyond the scale
The general report sets out the framework: three categories defined by a sovereign's relationship to its own financing, a tier beyond the scale where state, central bank and bank balance sheets fail together, and five pillars with indicative thresholds derived from agency methodologies and peer medians. It argues that social resilience, covering food security, poverty, employment and gender equality, must move first for any category change to last.
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- PDF, 5 pp.
Restructuring a post-default and disabled economy
Lebanon’s road map from systemic collapse to speculative-grade Category 2 — revised and expanded edition
Revised and expanded edition of Lebanon’s economic recovery road map. It defines the three speculative-grade sovereign categories with quantified threshold indicators across four pillars, calibrated on rating-agency methodologies and on BB, B and CCC peers, positions Lebanon against each threshold, and sets out a measured path from systemic collapse to Category 2.
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- PDF, 27 pp.
The Levant and Mesopotamia
Sub-regional compendium and country road maps
Levant and Mesopotamia span the whole scale. Jordan sits inside Category 1; Iraq is a Category 2 sovereign held up by oil, which supplies 91% of exports, and held down by governance; Lebanon and Syria are both off the scale, the former an intact administration with a destroyed balance sheet, the latter a destroyed state with a light one. Since February 2026 a regional war has struck all four.
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- PDF, 17 pp.
The Arabian Peninsula
Sub-regional compendium and country road maps
This compendium covers the peninsula's two sub-investment-grade sovereigns. Bahrain, with GDP per capita near USD 29,000 but public debt at 148% of GDP and interest absorbing about a third of revenue, is Category 2 by fiscal arithmetic, sustained by GCC support. Yemen, with income per head near USD 470, blocked oil exports and some 18 million people in IPC Phase 3 or worse, is off the scale in both halves.
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- PDF, 39 pp.
North Africa
Morocco, Algeria, Tunisia, Egypt, Libya, Mauritania
This compendium covers Morocco, Algeria, Tunisia, Egypt, Libya and Mauritania, the series' largest and strongest sub-region. Morocco holds an investment-grade rating (BBB– at S&P); five of the six sit in Category 1 or 2; only Libya, with two governments, falls to Category 3, and none is off the scale. Shared constraints are water, wheat and youth: cereal import dependence, recurrent drought and youth unemployment of 30–50%.
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- PDF, 27 pp.
The Horn of Africa and the Red Sea
Sub-regional compendium and country road maps
This compendium covers Djibouti, Comoros, Somalia and Sudan, the Arab world's poorest sub-region, where no sovereign is rated and all have recently faced debt distress. Djibouti is a Category 2 rentier of geography with an unserviceable Chinese loan; Comoros is Category 2 because it owes almost nothing; Somalia is the Category 3 post-HIPC template; Sudan is off the scale amid civil war and famine.
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- PDF, 4 pp.
Post-default restructuring
Speculative-grade categories and the way out beyond the recovery plan
This issue considers post-default restructuring after the May 2022 elections and the hastily approved recovery plan. Placing Lebanon, in Selective Default since March 2020, at the bottom of the weakest speculative-grade category, it argues that recovery must first address electricity, food security, medication and hospitalisation, and depositors' money. It calls for exchange-rate unification, a renewable energy fund and central bank governance reform as the pound reached LBP38,000.
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Country road maps
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Lebanon
Lebanon, beyond the scale after its March 2020 default, targets speculative-grade Category 2. Constraints are triple balance-sheet insolvency, a USD 80–83 bn financial gap and fractured governance. The road map completes IMF prior actions, restructures sovereign debt with depositors given priority, enforces bank resolution with losses allocated to shareholders first, overhauls Electricité du Liban, unifies exchange rates and abolishes the exclusive import-agency regime.
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Syria
Syria targets a move from post-war collapse to a Category 3 sovereign with a balance sheet. Constraints are institutional capacity, statistics and banks rather than solvency, with output between half and one-fifth of 2010 levels. The road map ratifies a constitution, integrates security forces, rebuilds statistics, puts power generation first, defines the recognised external-debt perimeter and caps central-bank advances to the Treasury.
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Iraq
Iraq seeks to consolidate Category 2 and reach Category 1 as a diversified borrower. Constraints are oil supplying nine-tenths of exports and revenue, governance in the bottom decile and a state-dominated banking system. The road map legislates the IMF non-oil revenue package, freezes hiring and audits payroll, adopts an oil-price fiscal rule with a stabilisation fund, builds non-Hormuz export routes and prohibits central-bank financing.
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Jordan
Jordan moves from the lower edge of Category 1 to its upper tier. Constraints are public debt of about 91% of GDP, flat for five years, unemployment of 21.4% and growth barely above population growth. The road map lifts revenue to 27% of GDP through the income-tax base, ends NEPCO and water losses with cost-reflective tariffs, sets a 1–2% primary surplus and funds a national employment compact.
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Egypt
Egypt, a programme-anchored Category 2, targets Category 1. Its binding constraints are interest absorbing about 60% of revenue, gross financing needs above 40% of GDP and revenue of 15–16% of GDP. The road map raises revenue to 20% by ending exemptions and taxing state enterprises, keeps a 3–3.5% primary surplus, lengthens domestic debt maturity, completes divestment with proceeds to debt, and prohibits central-bank overdraft financing.
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Morocco
Morocco moves from the top of Category 1 to investment grade at all three agencies. Its constraints are social rather than fiscal: youth unemployment of 37%, female participation of 15% and drought-driven cereal dependence. The road map converts the protest agenda into a social-spending scorecard, legislates a fiscal rule, prioritises desalination, adds aerospace and green-hydrogen exports, ring-fences World Cup spending and completes inflation targeting.
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Algeria
Algeria moves from a reserve-rich, deficit-monetising Category 2 towards Category 1. Its constraints are a deficit near 12% of GDP financed by the central bank, a 77% parallel-market premium and hydrocarbons at about 90% of exports. The road map cuts the deficit to 5% by 2029 through energy-price indexation and a wage-bill cap, sunsets central-bank advances, unifies the exchange rate and seeks a sovereign rating.
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Tunisia
Tunisia moves from a self-financed Category 2 back to Category 1. Constraints are no market issuance since 2019, a stalled IMF facility and direct central-bank financing of the deficit. The road map cuts the deficit from 6% to 3% of GDP over three years via the wage bill and a broader tax base, phases central-bank financing to zero by 2028 and restores an external anchor.
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Libya
Libya moves from a fragmented Category 3 to a unified Category 2. Its constraints are two governments financed by one central bank, fuel subsidies of 20–24% of GDP and a wage bill of 28%. The road map first unifies the government, budget, payroll and Treasury account, then cuts subsidies below 5% through a universal oil cash dividend, caps the wage bill at 15% and adopts a fiscal rule.
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Mauritania
Mauritania moves from an unrated Category 2 to a rated Category 1. Its numbers already meet most thresholds; constraints are the absence of market access, governance in the 20s, state-bank non-performing loans and 80% informality. The road map legislates a fiscal rule and sovereign fund for gas revenue, moves up the extractive chain, targets a sovereign rating and first market issue by 2029, and builds a strategic cereal reserve.
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Sudan
Sudan targets a move from off the scale to Category 3 as a post-conflict sovereign. Constraints are civil war, a cumulative output loss of about 40%, external debt of USD 45 bn in arrears and famine. With a ceasefire and single transitional authority as precondition, the road map formalises gold exports, revives Gezira agriculture, lifts revenue towards 12% of GDP, ends monetisation and seeks HIPC completion.
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Somalia
Somalia moves from a post-HIPC Category 3 to a revenue-bearing Category 2. Constraints are domestic revenue of 3–4% of GDP, contested federal politics with Puntland and Jubaland, and recurrent drought. The road map settles a federal compact, secures predictable AUSSOM financing, lifts revenue to 8% of GDP by 2030 through customs harmonisation, reintroduces the shilling with a dollar anchor and regulates mobile money as finance.
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Djibouti
Djibouti moves from a debt-distressed Category 2 to a sustainable Category 1. Constraints are external debt owed mainly to China Eximbank, with railway debt service suspended, thin reserves and weak governance. The road map formally restructures the railway and port loans, raises reserve cover to four months, ring-fences base rents in a stabilisation fund, lifts domestic revenue towards 16% of GDP and diversifies port clientele beyond Ethiopia.
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Comoros
Comoros moves from a Category 2 by absence of liabilities to a Category 2 by capacity, and towards Category 1. Its fiscal and external thresholds are met; constraints are domestic revenue of 11–12% of GDP, exports of 4% and single-digit government effectiveness. The road map lifts revenue to 15% through customs and VAT modernisation, launches a diaspora bond, develops spice processing, fisheries and geothermal power, and resolves the postal bank.
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Yemen
Yemen targets a move from a divided off-scale economy to a single Category 3 sovereign. Constraints are two central banks and currencies, oil exports blocked since 2022 and revenue of 5.6% of GDP. With a ceasefire as precondition, the road map pursues economic reunification under one central bank, resumes oil and LNG exports, lifts revenue to 12% of GDP and clears salary arrears through a donor trust.
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Bahrain
Bahrain, a GCC-guaranteed Category 2, targets Category 1 on its own balance sheet. Constraints are public debt of 148% of GDP rising towards 157%, interest absorbing a third of revenue and reserves under three months of imports. The road map legislates the revenue package, including 10% corporate income tax from 2027, sets a 4–5% primary surplus rule, formalises a standing GCC facility and directs Mumtalakat proceeds to debt reduction.
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Stock exchanges review
Market-wide reviews of Arab stock exchanges: every listed company scored on audited fundamentals, independently of the sovereign rating, with its sector effect and Sharia qualification. One section per market.
KSA – Saudi Arabia
1- PDF, 11 pp.
The Saudi Exchange under the ORION lens
FY2025 executive report: scoring, Sector Effect and Sharia qualification of 325 listed corporates on the Main Market and Nomu
ORION scored all 325 non-financial companies on the Saudi Exchange’s Main Market and Nomu on audited FY2025 fundamentals, independently of the sovereign rating. Strength is concentrated: 82% of market value sits in tier-A balance sheets, held by only 30% of companies. The Sector Effect changes the verdict for one company in three, and Sharia compliance depends heavily on which of seventeen methodologies is applied.
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Banking crisis and depositors
The collapse of Lebanon’s banking model, capital controls, de-risking, insurance and the long dispute between banks and depositors.
- PDF, 4 pp.
Decoding the IMF
Between the lines of the September 2026 mission to Beirut
A line-by-line reading of the IMF’s September 2026 statement on Lebanon. The paper translates diplomatic phrasing — “a measure of stability”, “the hierarchy of claims”, unimplemented fiscal measures — into financial reality, and argues that the statement sets legal and fiscal prerequisites for a programme rather than a recovery strategy, leaving reconstruction finance and the exchange-rate regime unaddressed.
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- PDF, 4 pp.
From financial mirage to forensics
How mismanagement, delay and Circular 331 cost Lebanese depositors their savings
Launched in 2014 as a $400 million central-bank-backed push into venture capital, Circular 331 served from the outset as engineered liquidity and a channel for insiders: BDL absorbed 75% of losses and banks faced no downside. Reading BDL’s 2026 statement on disclosure and dollar repayment as a belated reaction, the paper traces how mismanagement and regulatory delay cost depositors their savings.
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- PDF, 4 pp.
Banks versus depositors
The State Council enters the arena
This issue analyses the draft bank reorganisation law after the State Council annulled the May 2022 decision to write off US$60 billion of central bank foreign-currency obligations to banks. It examines the banks' claim that the state owes the central bank about US$16.3 billion, the split into qualified and non-qualified deposits, and the IMF stance, concluding that the bill ignores central bank governance and burdens depositors.
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- PDF, 4 pp.
The banks’ association and the depositors: the real deal
This second part on bank restructuring examines the banks' association's campaign against the draft reform law, including its strike after a court ruling against Fransabank. The report expects deadlock for at least two more years, citing a caretaker government, the presidential vacancy and no parliamentary consensus. It estimates losses at about US$75 billion, or 400% of GDP, deems full restitution of deposits unfeasible, and reviews depositor associations' divergent positions.
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- PDF, 4 pp.
Lebanese banks: the origins of the failure
This issue examines the origins of the banking collapse and competing restructuring proposals. It describes an overbanked sector of over 60 banks, heavily dollarised and mismatched, with government securities and central bank placements reaching 66.6% of assets by end-2017 against loans of 29.4%. The report contrasts the IMF's approach, prioritising debt restructuring and loss recognition, with the banks' association plan to preserve shareholder capital, identifying depositors as the principal victims.
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- PDF, 4 pp.
De-risking
Three types of de-risking and their consequences for Lebanon
This issue analyses whether de-risking threatens Lebanon's access to global finance as it shifts to a cash economy. It distinguishes de-banking, loss of correspondent banking relationships and withdrawal of money transfer operators, with AML/CFT compliance as the main driver. Noting remittances steady at US$5–7 billion a year and unverified implementation of Circular 154 on 3% correspondent deposits, it identifies losing transfer operators as the gravest risk.
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- PDF, 4 pp.
The Lebanese insurance sector
Characteristics of the sector and its exposure to the crisis
This issue examines insurance as a neglected pillar of Lebanon's financial system. With US$1.65 billion in premiums and penetration of 3.5% of GDP in 2019, first in the Arab world, the sector is fragmented across 51 companies, none listed. The report shows that pre-2022 policies compensated in 'Lollars' lost 87% of their value, notes that 62% of the population lacks adequate health cover, and calls for ratings and disclosure.
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- PDF, 4 pp.
Effects of the absence of banking services
A positive paradigm change
This issue examines the effects of absent banking services: a cash economy, a complete credit crunch and halted trade finance, with most of the 65 banks technically insolvent. Expecting banks to remain ineffective for five to ten years, it recommends independent audits, shareholder recapitalisation, new institutional investors and governance rules on politically exposed shareholders, alongside alternative vehicles: factoring, equity recapitalisation, hospitality, renewable energy and education funds.
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- PDF, 4 pp.
The capital control law
The recovery plan versus the IMF staff-level agreement
This issue assesses the draft Capital Control Law and the April 2022 recovery plan. It argues the law comes too late, effectively amnesties banks and grants an unaccountable committee arbitrary powers, noting that capital controls rank last among IMF priorities. It reviews the plan's US$60 billion write-off of central bank liabilities, a bail-in of deposits above US$100,000, a VAT rise from 11% to 15%, and an external central bank audit.
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Capital markets and ratings
Credit ratings and the sovereign ceiling, corporate bonds, the Beirut Stock Exchange and the Capital Markets Authority.
- PDF, 7 pp.
Breaking the bank-centric hegemony
Why Lebanon’s recovery depends on debt capital markets and systemic financial reform
Behind the parliamentary debate over the Bank Resolution and Financial Gap laws lies a strategy of delay that protects bank shareholders at depositors’ expense. The paper sets out the inverted pyramid of loss allocation, contrasts it with the IMF hierarchy of claims, and proposes a blueprint for rebuilding Lebanon’s financial system around independent intermediaries, domestic credit rating agencies and a liquid debt capital market.
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- PDF, 4 pp.
The Capital Markets Authority: a failure so far
Role, recent history and services to SMEs
This issue assesses the Capital Markets Authority amid the planned suspension of its operations in January 2024. It highlights governance flaws: the central bank governor chairs both the authority and the banking control commission, the board is politicised, and the sanctions committee and capital markets tribunal were never established. Citing the Optimum brokerage case, it argues an effective authority is essential for SME funding, disclosure and investor protection.
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- PDF, 4 pp.
Corporate bonds in the Lebanese market
A restructuring pillar
This issue presents a domestic corporate bond market as a pillar of financial restructuring. Although bond legislation dates from 1933, post-war issuance was dominated by banks; only seven banks issued Eurobonds and only two cement companies, Holcim and Sibline, issued corporate bonds. The report blames bank concentration, overdraft dependence at effective rates of 21% in 2019 and government crowding-out, and recommends independent intermediaries and rating agencies.
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- PDF, 4 pp.
The sovereign rating ceiling
Lebanon’s selective default and a customised rating methodology
This issue examines the limits of bank ratings in a sovereign Selective Default environment. It argues that insolvency has rendered standard methodologies meaningless, that international agencies were slow to downgrade, and that concentration-driven systemic risk was never captured. Noting banks' non-compliance with capital requirements and the 3% correspondent liquidity reserve, the report proposes a customised methodology weighting qualitative factors at 60%, stronger transparency, and compulsory ratings in any restructured sector.
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- PDF, 4 pp.
What ratings are
Definition, importance and the rating process
This issue argues that regulated domestic corporate ratings are long overdue in Lebanon. Regulators never licensed local providers, and international agencies were costly and uninterested in family-owned firms. The report links this gap to SMEs being implicitly capped at the sovereign's Selective Default rating, information asymmetry, de-risking, the absence of a bond market and blanket bank collateral requirements, outlines corporate rating methodology, and calls for regulated local agencies.
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- PDF, 4 pp.
Capital markets and the CMA
This issue argues that equity investment in Lebanon remains viable despite the crisis. It describes the Capital Markets Authority's mandate and the shallowness of the Beirut Stock Exchange, with only ten listed stocks. The report contends that depositors turning into investors, devaluation favouring export sectors and the Electronic Trading Platform's suitability for small IPOs together create conditions for domestic listings, and presents OFS transaction advisory as preparation for equity funding.
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- PDF, 4 pp.
The crowding-out effect
The Beirut Stock Exchange, SME financial inclusion and a national scoring scale
This issue traces the crowding-out of Lebanese SMEs by decades of bank lending to the state. In 2019 banks held US$190 billion in deposits, of which US$130 billion was owed by government against US$40 billion in private loans. Contrasting today's ten listed securities with the Beirut Stock Exchange's earlier depth, it argues the Electronic Trading Platform can open equity and corporate debt to family-owned SMEs while imposing governance.
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SMEs and alternative finance
How Lebanese companies can finance themselves after the banks: risk profiles, rural entrepreneurship, scoring and transparency.
- PDF, 4 pp.
The invisible private sector
Why Lebanese corporates remain opaque, captured and excluded from global markets
Outside a handful of listed banks, Lebanese companies are absent from international financial data platforms. The paper explains why: multiple sets of accounts, family control averse to outside equity, and a banking model that captured corporates as deposit clients instead of financing them through capital. It argues that transparency is the precondition for Lebanese firms to re-enter global credit and investment markets.
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- PDF, 3 pp.
Four thousand companies nobody can see
Why Lebanon’s private sector will not exit the credit crisis until it agrees to be measured
This paper argues that Lebanon's credit crisis is, at root, a disclosure crisis: Lebanese private companies are invisible to foreign lenders because their audited accounts never leave the building. Contrasting Lebanon with European public filing regimes, it rejects firm size as an excuse and proposes three steps: independent scoring of association members, distribution of scores through lenders' existing channels, and evidence-based sector reports.
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- PDF, 4 pp.
Profiling Lebanese SMEs
Constant risk characteristics
This issue profiles Lebanese SMEs through OFS's transaction advisory programme. It identifies recurring weaknesses: family governance, multi-generational succession disputes, overdraft-driven over-indebtedness, single-activity focus and assets long tied up as bank collateral. Arguing that multiple exchange rates make audited accounts unreliable, it shows how the advisory process, spanning investment foundations, risk factors and value creation, lets firms rebuild financial statements and prepare for equity or debt transactions.
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- PDF, 4 pp.
The need for rural entrepreneurship
This issue makes the case for rural entrepreneurship to curb migration and regional inequality. Citing a 2017 OFS study showing rural median monthly salaries of LBP2.28 million against LBP2.82 million in cities, it identifies scarce funding (55% of Kafalat's portfolio sits in Beirut and Mount Lebanon), red tape, weak infrastructure and lost skills as obstacles. It recommends tax-advantaged industrial parks, energy incentives using underused rural grids and national marketing.
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- PDF, 4 pp.
SMEs’ financial flexibility: solutions for a new economy
Banks–SMEs dynamics and alternative financing
This issue examines how Lebanese SMEs can secure funding after the banking collapse. It argues the damage is structural: 64 near-identical banks placed deposits with the state, disregarded concentration risk and left SMEs burdened by overdrafts costing up to 15%. With deposits down from US$187 billion to about US$103 billion, it surveys family-office investors, private funds and the Oxygen trade-finance fund, and proposes recapitalisation, trade-finance, education, energy and hospitality funds.
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Islamic finance
Sharia-compliant financing vehicles and their use for industry and investment.
- PDF, 4 pp.
Islamic financing vehicles
Basic principles and an industrial fund
This issue explores Islamic finance as a funding channel for Lebanese SMEs. It sets out profit-and-loss sharing and the prohibitions on interest, uncertainty and gambling, and describes trade instruments (Murabaha, Ijara, Istisnaa, Salam) and equity instruments (Mudaraba, Musharaka). It notes that Lebanon's four Islamic banks focus on Murabaha, constrained by central bank rules and the lack of a bond market, and argues equity structures could mobilise household cash.
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Public policy and privatisation
Privatisation, sovereign wealth funds and the governance of water — the public decisions that shape private investment.
- PDF, 8 pp.
The fiscal predators of Beirut
How asymmetric debt settlement and predatory extraction are suffocating Lebanon’s future
After the 2019 collapse, large borrowers repaid dollar debts in devalued pounds, draining the banks while depositors lost their savings. The paper traces how that asymmetric settlement, opaque public finance and a new wave of regressive taxes form a single loop of extraction that suppresses productive capital, and links the way out to privatisation, deposit recovery and a rigorous categorisation of the economy.
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- PDF, 7 pp.
The Lebanese inverted pyramid
The normal versus the distorted socio-economic model
In a functional economy, merit-based public servants govern a broad productive base of entrepreneurs, professionals, workers and SMEs. The paper contrasts this model with Lebanon’s inverted structure, in which exclusive-agency cartels and allied political elites dominate, a compliant intermediary layer serves them, and the productive middle and base are compressed, impoverished or driven to emigrate.
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- PDF, 6 pp.
Lebanese privatisation
Redeeming the sovereign debt and rebuilding the capital ecosystem
Lebanon’s recovery requires two tracks: a state monopoly on arms and an economic transformation away from its oligopolistic model. The paper places privatisation at the centre of the second track — not a fire sale, but a way to repay depositors, corporatise state assets under independent management, deepen capital markets and rebuild infrastructure — and rejects the argument that assets must be kept “for our children”.
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- PDF, 14 pp.
National water governance and the privatisation paradox in Lebanon
A strategic analysis, 2005–2026
This paper traces the evolution of Lebanese water governance from Law 221/2000 to the 2020 Water Code and the National Water Sector Strategy 2024–2035. It argues that formal privatisation never materialised; instead, the 2019 collapse of the tariff model and the electricity grid produced a costly informal privatisation through water trucking, bottled water and unlicensed wells, with severe social and groundwater consequences.
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- PDF, 43 pp.
Water privatisation in Lebanon
A broad view of the socio-political ecosystem around a long-due initiative
This paper revisits the case for privatising Lebanese state-owned enterprises in light of the post-2019 financial collapse, sovereign default and the 2024 conflict. It argues that privatisation under crisis conditions risks fire sales, private monopolies and elite capture, and sets out prerequisites: independent regulators, banking resolution, debt restructuring, governance reform and social protection, followed by selective, case-by-case transactions.
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- PDF, 4 pp.
Privatisation in Lebanon: long overdue
A political tool, socio-economic effects and the privatisation commission
This issue argues that privatisation in Lebanon is long overdue, blocked by a political class that treats public institutions as clientelist fiefdoms. Citing EDL subsidies of up to US$2 billion a year and US$40 billion of related debt, it values publicly held assets at US$12–22 billion, including MEA (US$600–740 million) and the central bank's stake in Casino du Liban. It recommends prior deregulation, eight independent regulators and an IMF-backed programme.
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- PDF, 4 pp.
Privatisation: a forgotten dysfunction
This issue examines exclusive agency arrangements as a neglected economic dysfunction. Tracing them to Ottoman-era supply privileges perpetuated under the French mandate, the report argues that exclusive agents, banks and politicians form a triangle restricting competition, illustrated by banks refusing to finance Chinese car imports. This cartel-like structure blocks new entrants, makes antitrust enforcement impossible, and turned the banking sector into a retail lending hub.
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- PDF, 4 pp.
Sovereign wealth funds
Characteristics, classes and the Santiago Principles
This issue asks whether a Lebanese sovereign wealth fund would be a burden or a solution. Reviewing the five SWF types and the Santiago Principles, it argues that ownership is the decisive problem: government is divided along confessional lines, the central bank faces a US$60–70 billion loss gap and conflicts of interest, and the finance ministry risks political capture. It proposes structured privatisation of state assets instead.
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- PDF, 16 pp.
A strategy on Lebanese water
This paper presents water as an under-exploited strategic sector for Lebanon, citing favourable rainfall, potential water exports and hydroelectric generation. Given the state's lack of funding capacity, it recommends long-term concessions of 25 to 40 years managed by experienced multinational operators, with assets remaining in public ownership, revenue risk borne by the concessionaire, and robust, internationally vetted concession agreements preferred over short-term BOT schemes.
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Food, water and the social economy
Food insecurity, water priorities and the cost of living: the economy as households experience it.
- PDF, 4 pp.
Food shortage
Half the population threatened by food insecurity
This issue examines food insecurity in Lebanon. By December 2021, 53% of residents needed social assistance, while food imports of about US$4 billion a year cover 55% of supply. The Survival Minimum Expenditure Basket rose from LBP1.01 million in October 2019 to LBP7.4 million in June 2022, and average salaries now cover only 24% of it. It attributes this to poverty, inflation, subsidy removal, weak local production and dual pricing.
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- PDF, 4 pp.
Water: five main priorities
Storage, supply, losses and the public–private question
This issue examines the mismanagement of Lebanon's abundant water resources. The report identifies fragmented governance, a network designed for two million inhabitants, unmetered lump-sum tariffs, contamination and rationing, with agriculture accounting for 60% of demand. It sets five priorities: retaining rain and snowmelt, continuous supply, wastewater recycling for irrigation, hydroelectric dams and export of surplus water, estimating potential state revenue of US$2–3 billion a year through public-private partnerships involving municipalities.
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- PDF, 2 pp.
Effects of price volatility on the cost of living in Lebanon
Field study across retail, health, fuel, education and services
This paper reports a 2022 field survey across Beirut, Mount Lebanon, Zahlé and Tripoli measuring how exchange-rate uncertainty shaped pricing in retail, health, education and professional services relative to 2019–2020. It identifies a ratchet effect, whereby retailers price at anticipated future exchange rates and never adjust downwards, and estimates inflation above 850% for earners paid in Lebanese pounds against roughly 21% for those paid in US dollars.
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Marketing and strategy
Brand building, mental availability and digital marketing in the Middle East and North Africa.
- PDF, 19 pp.
Brand equity in the data age
Mental availability, distinctive assets and the empirical case for long-term marketing investment
This paper synthesises Ehrenberg-Bass Institute research and IPA Effectiveness Databank evidence to examine what drives brand growth. It argues that growth stems chiefly from penetration rather than loyalty, built through mental availability, mass reach and distinctive brand assets over a 6–36 month horizon. It integrates the 60/40 principle and Double Jeopardy Law, and positions Media Mix Modelling as the link between brand investment and long-run financial returns.
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- PDF, 21 pp.
Digital marketing in the Middle East and North Africa
Cultural dimensions, platform dynamics and the adaptation of analytical frameworks
This paper argues that Western marketing models, built on individualist, low-context and rational-actor assumptions, systematically misfit Arab consumer behaviour. Drawing on Hofstede's cultural dimensions, Hall's high-context communication framework and an analysis of MENA platform dynamics, it constructs an adapted strategic framework, specifies modifications to attribution modelling, Media Mix Modelling and customer lifetime value analysis, and treats the GCC, Levant and North Africa as distinct markets.
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Investment Contextual Report
The complete monthly series, February 2022 to February 2024: twenty-three four-page briefings on Lebanon’s finance and investment climate.
- PDF, 4 pp.
Banks versus depositors
The State Council enters the arena
This issue analyses the draft bank reorganisation law after the State Council annulled the May 2022 decision to write off US$60 billion of central bank foreign-currency obligations to banks. It examines the banks' claim that the state owes the central bank about US$16.3 billion, the split into qualified and non-qualified deposits, and the IMF stance, concluding that the bill ignores central bank governance and burdens depositors.
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- PDF, 4 pp.
The Capital Markets Authority: a failure so far
Role, recent history and services to SMEs
This issue assesses the Capital Markets Authority amid the planned suspension of its operations in January 2024. It highlights governance flaws: the central bank governor chairs both the authority and the banking control commission, the board is politicised, and the sanctions committee and capital markets tribunal were never established. Citing the Optimum brokerage case, it argues an effective authority is essential for SME funding, disclosure and investor protection.
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The banks’ association and the depositors: the real deal
This second part on bank restructuring examines the banks' association's campaign against the draft reform law, including its strike after a court ruling against Fransabank. The report expects deadlock for at least two more years, citing a caretaker government, the presidential vacancy and no parliamentary consensus. It estimates losses at about US$75 billion, or 400% of GDP, deems full restitution of deposits unfeasible, and reviews depositor associations' divergent positions.
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Lebanese banks: the origins of the failure
This issue examines the origins of the banking collapse and competing restructuring proposals. It describes an overbanked sector of over 60 banks, heavily dollarised and mismatched, with government securities and central bank placements reaching 66.6% of assets by end-2017 against loans of 29.4%. The report contrasts the IMF's approach, prioritising debt restructuring and loss recognition, with the banks' association plan to preserve shareholder capital, identifying depositors as the principal victims.
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- PDF, 4 pp.
Corporate bonds in the Lebanese market
A restructuring pillar
This issue presents a domestic corporate bond market as a pillar of financial restructuring. Although bond legislation dates from 1933, post-war issuance was dominated by banks; only seven banks issued Eurobonds and only two cement companies, Holcim and Sibline, issued corporate bonds. The report blames bank concentration, overdraft dependence at effective rates of 21% in 2019 and government crowding-out, and recommends independent intermediaries and rating agencies.
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- PDF, 4 pp.
Privatisation in Lebanon: long overdue
A political tool, socio-economic effects and the privatisation commission
This issue argues that privatisation in Lebanon is long overdue, blocked by a political class that treats public institutions as clientelist fiefdoms. Citing EDL subsidies of up to US$2 billion a year and US$40 billion of related debt, it values publicly held assets at US$12–22 billion, including MEA (US$600–740 million) and the central bank's stake in Casino du Liban. It recommends prior deregulation, eight independent regulators and an IMF-backed programme.
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Privatisation: a forgotten dysfunction
This issue examines exclusive agency arrangements as a neglected economic dysfunction. Tracing them to Ottoman-era supply privileges perpetuated under the French mandate, the report argues that exclusive agents, banks and politicians form a triangle restricting competition, illustrated by banks refusing to finance Chinese car imports. This cartel-like structure blocks new entrants, makes antitrust enforcement impossible, and turned the banking sector into a retail lending hub.
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The sovereign rating ceiling
Lebanon’s selective default and a customised rating methodology
This issue examines the limits of bank ratings in a sovereign Selective Default environment. It argues that insolvency has rendered standard methodologies meaningless, that international agencies were slow to downgrade, and that concentration-driven systemic risk was never captured. Noting banks' non-compliance with capital requirements and the 3% correspondent liquidity reserve, the report proposes a customised methodology weighting qualitative factors at 60%, stronger transparency, and compulsory ratings in any restructured sector.
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What ratings are
Definition, importance and the rating process
This issue argues that regulated domestic corporate ratings are long overdue in Lebanon. Regulators never licensed local providers, and international agencies were costly and uninterested in family-owned firms. The report links this gap to SMEs being implicitly capped at the sovereign's Selective Default rating, information asymmetry, de-risking, the absence of a bond market and blanket bank collateral requirements, outlines corporate rating methodology, and calls for regulated local agencies.
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Capital markets and the CMA
This issue argues that equity investment in Lebanon remains viable despite the crisis. It describes the Capital Markets Authority's mandate and the shallowness of the Beirut Stock Exchange, with only ten listed stocks. The report contends that depositors turning into investors, devaluation favouring export sectors and the Electronic Trading Platform's suitability for small IPOs together create conditions for domestic listings, and presents OFS transaction advisory as preparation for equity funding.
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Food shortage
Half the population threatened by food insecurity
This issue examines food insecurity in Lebanon. By December 2021, 53% of residents needed social assistance, while food imports of about US$4 billion a year cover 55% of supply. The Survival Minimum Expenditure Basket rose from LBP1.01 million in October 2019 to LBP7.4 million in June 2022, and average salaries now cover only 24% of it. It attributes this to poverty, inflation, subsidy removal, weak local production and dual pricing.
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Profiling Lebanese SMEs
Constant risk characteristics
This issue profiles Lebanese SMEs through OFS's transaction advisory programme. It identifies recurring weaknesses: family governance, multi-generational succession disputes, overdraft-driven over-indebtedness, single-activity focus and assets long tied up as bank collateral. Arguing that multiple exchange rates make audited accounts unreliable, it shows how the advisory process, spanning investment foundations, risk factors and value creation, lets firms rebuild financial statements and prepare for equity or debt transactions.
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Islamic financing vehicles
Basic principles and an industrial fund
This issue explores Islamic finance as a funding channel for Lebanese SMEs. It sets out profit-and-loss sharing and the prohibitions on interest, uncertainty and gambling, and describes trade instruments (Murabaha, Ijara, Istisnaa, Salam) and equity instruments (Mudaraba, Musharaka). It notes that Lebanon's four Islamic banks focus on Murabaha, constrained by central bank rules and the lack of a bond market, and argues equity structures could mobilise household cash.
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Water: five main priorities
Storage, supply, losses and the public–private question
This issue examines the mismanagement of Lebanon's abundant water resources. The report identifies fragmented governance, a network designed for two million inhabitants, unmetered lump-sum tariffs, contamination and rationing, with agriculture accounting for 60% of demand. It sets five priorities: retaining rain and snowmelt, continuous supply, wastewater recycling for irrigation, hydroelectric dams and export of surplus water, estimating potential state revenue of US$2–3 billion a year through public-private partnerships involving municipalities.
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The need for rural entrepreneurship
This issue makes the case for rural entrepreneurship to curb migration and regional inequality. Citing a 2017 OFS study showing rural median monthly salaries of LBP2.28 million against LBP2.82 million in cities, it identifies scarce funding (55% of Kafalat's portfolio sits in Beirut and Mount Lebanon), red tape, weak infrastructure and lost skills as obstacles. It recommends tax-advantaged industrial parks, energy incentives using underused rural grids and national marketing.
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- PDF, 4 pp.
De-risking
Three types of de-risking and their consequences for Lebanon
This issue analyses whether de-risking threatens Lebanon's access to global finance as it shifts to a cash economy. It distinguishes de-banking, loss of correspondent banking relationships and withdrawal of money transfer operators, with AML/CFT compliance as the main driver. Noting remittances steady at US$5–7 billion a year and unverified implementation of Circular 154 on 3% correspondent deposits, it identifies losing transfer operators as the gravest risk.
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The Lebanese insurance sector
Characteristics of the sector and its exposure to the crisis
This issue examines insurance as a neglected pillar of Lebanon's financial system. With US$1.65 billion in premiums and penetration of 3.5% of GDP in 2019, first in the Arab world, the sector is fragmented across 51 companies, none listed. The report shows that pre-2022 policies compensated in 'Lollars' lost 87% of their value, notes that 62% of the population lacks adequate health cover, and calls for ratings and disclosure.
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- PDF, 4 pp.
Sovereign wealth funds
Characteristics, classes and the Santiago Principles
This issue asks whether a Lebanese sovereign wealth fund would be a burden or a solution. Reviewing the five SWF types and the Santiago Principles, it argues that ownership is the decisive problem: government is divided along confessional lines, the central bank faces a US$60–70 billion loss gap and conflicts of interest, and the finance ministry risks political capture. It proposes structured privatisation of state assets instead.
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Effects of the absence of banking services
A positive paradigm change
This issue examines the effects of absent banking services: a cash economy, a complete credit crunch and halted trade finance, with most of the 65 banks technically insolvent. Expecting banks to remain ineffective for five to ten years, it recommends independent audits, shareholder recapitalisation, new institutional investors and governance rules on politically exposed shareholders, alongside alternative vehicles: factoring, equity recapitalisation, hospitality, renewable energy and education funds.
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Post-default restructuring
Speculative-grade categories and the way out beyond the recovery plan
This issue considers post-default restructuring after the May 2022 elections and the hastily approved recovery plan. Placing Lebanon, in Selective Default since March 2020, at the bottom of the weakest speculative-grade category, it argues that recovery must first address electricity, food security, medication and hospitalisation, and depositors' money. It calls for exchange-rate unification, a renewable energy fund and central bank governance reform as the pound reached LBP38,000.
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The capital control law
The recovery plan versus the IMF staff-level agreement
This issue assesses the draft Capital Control Law and the April 2022 recovery plan. It argues the law comes too late, effectively amnesties banks and grants an unaccountable committee arbitrary powers, noting that capital controls rank last among IMF priorities. It reviews the plan's US$60 billion write-off of central bank liabilities, a bail-in of deposits above US$100,000, a VAT rise from 11% to 15%, and an external central bank audit.
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The crowding-out effect
The Beirut Stock Exchange, SME financial inclusion and a national scoring scale
This issue traces the crowding-out of Lebanese SMEs by decades of bank lending to the state. In 2019 banks held US$190 billion in deposits, of which US$130 billion was owed by government against US$40 billion in private loans. Contrasting today's ten listed securities with the Beirut Stock Exchange's earlier depth, it argues the Electronic Trading Platform can open equity and corporate debt to family-owned SMEs while imposing governance.
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SMEs’ financial flexibility: solutions for a new economy
Banks–SMEs dynamics and alternative financing
This issue examines how Lebanese SMEs can secure funding after the banking collapse. It argues the damage is structural: 64 near-identical banks placed deposits with the state, disregarded concentration risk and left SMEs burdened by overdrafts costing up to 15%. With deposits down from US$187 billion to about US$103 billion, it surveys family-office investors, private funds and the Oxygen trade-finance fund, and proposes recapitalisation, trade-finance, education, energy and hospitality funds.
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