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The September 2023 issue addressed privatisation in Lebanon, which the authors described as long overdue. Whereas many emerging and even socialist economies had privatised by the late 1990s to improve services, reduce the state's burden and retire debt, Lebanon's political establishment had treated public enterprises as instruments of patronage, staffing them through political appointments and leaving them overstaffed, loss-making and without clear development policies.
The issue argued that post-2019 proposals, whether transferring state assets to banks or creating a sovereign fund to repay depositors, had been poorly structured and aimed at the wrong purpose. It instead called for a long-term programme preceded by deregulation, de-monopolisation and independent sector regulators, managed by an autonomous privatisation commission responsible for valuation, advisor selection, bidding and the terms of each transaction.
For investors, donors and the IMF, the authors saw an officially announced privatisation programme as a strong signal of reform, while acknowledging that the country's Selective Default rating at the time made execution difficult.
Key findings
- Publicly held assets were estimated at roughly $12 billion conservatively and up to $22 billion optimistically.
- Electricity subsidies of up to $2 billion a year over three decades were linked to around $40 billion of public debt from that sector alone.
- Indicative valuations included $1.4–1.7 billion for the state tobacco monopoly, $2.18–4.28 billion for telecom assets and $7.12–14.38 billion for public real estate.
- A Beirut airport concession was estimated to yield $400 million upfront and $20 million annually, with concessions also recommended for ports, electricity and water.
- The issue identified the need for eight independent regulatory authorities and reviewed methods ranging from auctions and IPOs to BOT concessions and liquidation.
Archive: written in Sep 2023; figures and assessments reflect conditions at the time of writing.Summary of the paper; the full analysis is in the PDF.