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The paper argues that conventional debt restructuring and piecemeal bailouts will not resolve Lebanon's collapse, and that recovery requires two tracks: full state control over arms and security, and an economic transformation away from the legacy oligopolistic model. Within that transformation, it places privatisation at the centre, not as a sale of national property but as the mechanism for reimbursing depositors, deepening capital markets and financing infrastructure.
A central claim is that lost deposits constitute a sovereign liability. Because bank deposits were channelled into central bank certificates and government debt to fund deficits and state enterprises, the paper contends that blanket bail-ins reward state mismanagement, and that state commercial assets should be used to make depositors whole. It rejects the argument that assets must be preserved for future generations, noting that the assets are depreciating under state management and that depositors are the parents of those generations.
For investors and rating agencies, the paper links an enforceable asset-backed repayment plan, combined with political and security stability, to the conditions under which Lebanon's sovereign outlook could move out of default territory.
Key findings
- The paper proposes an autonomous National Stability Fund to corporatise utilities and state enterprises into joint-stock companies with professional boards and international audit.
- Rather than selling assets at crisis valuations, the Fund would securitise future revenues and dividends and issue yield-bearing recovery certificates, equity tranches and asset-backed bonds to depositors.
- IPO tranches of corporatised telecom, power and transport entities are presented as the route to reviving the Beirut Stock Exchange and attracting non-bank and diaspora capital.
- Greenfield PPP, concession and BOO/BOT projects are identified in utility-scale solar, terminal concessions at the ports of Beirut and Tripoli, telecom unbundling and 5G spectrum auctions, airport operations and water distribution.
- The paper argues that corporatisation would shift public employment from political affiliation to merit and generate satellite firms able to absorb retrenched public-sector workers.
- Independent regulators in telecommunications, energy, aviation and competition are cited as preconditions for equal market access and investor protection.
Summary of the paper; the full analysis is in the PDF.