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This conceptual paper contrasts a functional socio-economic pyramid, with merit-based public administration at the apex and a broad productive base of professionals, SMEs and skilled labour, with what it describes as Lebanon's inverted structure. The paper argues that nearly a century of exclusive agency arrangements, political collusion and captured banking produced a top-heavy model in which rent-seeking import cartels dominate, a compliant intermediary tier depends on monopoly distribution, and productive talent is pushed into emigration.
The paper then turns to remedies, splitting them between civil society and the state, and addresses a political obstacle it regards as decisive: the sectarian framing of economic reform. It argues that fears over losing community assets, opening markets and losing public-sector jobs are used to protect the existing structure, and offers a counter-narrative that presents competition, corporatisation and deposit recovery as cross-community consumer protection.
For policymakers and development partners, the paper's value lies in connecting competition enforcement, state-enterprise reform and credit allocation into one reform sequence.
Key findings
- The paper contrasts open competition under anti-trust law with a market it describes as blocked by more than 3,300 exclusive agency monopolies and cartels.
- It calls for strategic litigation under Competition Law 281/2022, which abolished the statutory protection of exclusive commercial representation under Decree-Law 34/67, including defence of parallel importers.
- It recommends appointing an independent National Competition Authority board with powers to audit market dominance, review mergers and fine cartel price-fixing up to 10% of turnover.
- State utilities in telecom, electricity, ports and water would become joint-stock companies audited under international standards, with shares placed in a National Stability & Deposit Recovery Fund rather than sold in fire-sales.
- Commercial banks would be restructured so that trade finance and corporate credit serve local producers, industrial SMEs and non-agent importers.
- Administrative and fiscal decentralisation, with municipal partnerships delivering power, water and waste services, is presented as a way to defuse fears of centralised sectarian dominance.
Summary of the paper; the full analysis is in the PDF.