Lebanon is typically known as a middle-income country known for its well-educated and cosmopolitan population, but it’s now characterized as a rapidly failing state that necessitates emergency economic support and swift political reform. By supporting the petition of European allies to rebuild the Port of Beirut, which exploded in August 2020, economic activity in Lebanon can quickly resume while providing the West greater influence over the Eastern Mediterranean.
The port is considered the gateway to the Middle East and ranks among the 10 most important ports in the Mediterranean. The country leading its reconstruction will control it and be the main beneficiary of its activities for the years to come.
For nearly 18 months, Lebanon has been suffering from a harsh combination of an ongoing economic and financial crisis, failing to address the repercussions of the COVID-19 pandemic, and recovering from the human tragedy involved with the explosion.
The lira has lost more than 90 percent of its value, more than 120,000 tons of food was lost to the Beirut explosion, and approximately 75 percent of Lebanese live in poverty. Daily life for the common Lebanese citizen, includes unstable access to life saving medicines, waiting in fuel lines that wrap around the city, and spending hours in darkness during frequent blackouts. The World Bank has called it one of the worst financial crises in centuries.
The port has partially resumed its activities by receiving critical imports, however, rebuilding and modernizing the port would substantially stimulate much-needed trade and economic growth. French container shipping company group CMA-CGM is pursuing a plan to reconstruct damaged docks and warehouses while increasing the digitalization of port activities. Shortly after, German companies presented a separate plan to additionally focus on longer term real-estate development. The companies have expressed willingness to work collaboratively on the initiative, however, the plan can only move forward if Lebanon is able to resolve political deadlock hindering the government’s decisions.
Both countries have stipulated that political reforms to the government cabinet and economic adjustments such as a central bank audit and an overhaul of the wasteful power sector must occur before the project begins. The project is projected to cost $5 billion to $15 billion, and said it could create as many as 50,000 jobs.
During French President Emmanuel Macron’s second visit to Beirut, CMA-CGM’s head, the Lebanese-born Rodolphe Saade, was a part of his delegation. The company provided the Lebanese government a three-phase project to rebuild, expand and modernise the port.
This public-private partnership will encourage sustainable, long term growth in the country by building infrastructure while minimizing potential for corruption that often taints aid programs. Since the explosion, rebuilding the port became a geopolitical competition with the Russians, the Chinese, the Turks, the French and the Germans expressing their interest in the project. Germany and France must stop internally competing for rights over the project and instead focus on their shared outcome of deterring Russian and Chinese influence in the region.
Importantly, revitalizing the port is also a symbolically powerful project in a country that is in a crisis of hope. Witnessing physical progress in the city can potentially renew spirits and spur optimism in a dark and devastating period in the country’s history.
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