Hezbollah-Israel Conflict Threatens Lebanon’s Fragile Economy, Report Says

Smoke rises following an Israeli air strike on Khiam in southern Lebanon on October 29, 2024. (AFP)
Smoke rises following an Israeli air strike on Khiam in southern Lebanon on October 29, 2024. (AFP)
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Hezbollah-Israel Conflict Threatens Lebanon’s Fragile Economy, Report Says

Smoke rises following an Israeli air strike on Khiam in southern Lebanon on October 29, 2024. (AFP)
Smoke rises following an Israeli air strike on Khiam in southern Lebanon on October 29, 2024. (AFP)

Analysis from a humanitarian group working in Lebanon forecasts two scenarios in its report on the Hezbollah-Israel conflict, both predicting a severe economic contraction in Lebanon by early 2025.

Mercy Corps’ Lebanon Crisis Analysis Team says Israel’s continued strikes on suspected Hezbollah targets in Lebanon, without blocking key infrastructure, will still bring severe economic and humanitarian risks.

Lebanon’s economy could contract by 12.81%, or $2.305 billion by January 2025, with impacts hitting agriculture, manufacturing, and services hard in the South and Bekaa Valley.

Agriculture in South Lebanon, which drives 80% of its economy, may come to a halt, while factories face shutdowns, the report says. “The Bekaa Valley, responsible for 2% of national GDP, will see similar disruptions, with 70% of farmland under threat and many Syrian laborers fleeing,” it adds.

The service sector, particularly tourism, stands to lose $1.256 billion, potentially crippling a vital part of the economy.

If Israel imposes a stricter blockade and expands bombings to key infrastructure, Lebanon’s economic loss could rise to 21.9% of GDP, or $3.938 billion, according to the report.

Over 1.5 million people could be displaced, with political and intercommunal tensions intensifying as Shiites flee to diverse religious regions that are majority Christian, Druze or Sunni, the report adds.

Already, 1.2 million people have been displaced from villages in southern and eastern Lebanon as well as Beirut’s southern suburbs.

Lebanon, already enduring a five-year economic crisis marked by a severe currency collapse, had just begun showing signs of recovery before the war erupted.



FII: Artificial Intelligence Represents Future of Global Economy

Saudi Finance Minister Mohammed Al-Jadaan speaks at one of the sessions of the second day of the conference. (SPA)
Saudi Finance Minister Mohammed Al-Jadaan speaks at one of the sessions of the second day of the conference. (SPA)
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FII: Artificial Intelligence Represents Future of Global Economy

Saudi Finance Minister Mohammed Al-Jadaan speaks at one of the sessions of the second day of the conference. (SPA)
Saudi Finance Minister Mohammed Al-Jadaan speaks at one of the sessions of the second day of the conference. (SPA)

Economic policymakers and decision-makers have identified key points for leveraging artificial intelligence to shape the future of investment and drive global economic growth.

These insights were discussed on Wednesday in dialogue sessions at the eighth annual Future Investment Initiative conference held in Riyadh. Sessions on the second day, attended by over 7,000 participants and 600 international speakers, also emphasized building bridges of understanding, uniting global communities to tackle challenges, and underscored the importance of a collaborative approach.

Saudi Finance Minister Mohammed Al-Jadaan announced that the Kingdom is one of the world’s most attractive regions for investors seeking to achieve their investment goals.

The minister stated that Saudi Arabia is deepening its commitment to Vision 2030 for economic transformation, revealing that the non-oil sector now represents 52% of the Kingdom’s economy, a result attributed to the vision’s objectives.

Speaking during an opening session on the second day of the Future Investment Initiative conference, Al-Jadaan expressed satisfaction with the progress made so far, underscoring that Saudi Arabia ranks among the most capable countries globally in meeting investor needs.

Al-Jadaan explained that the National Center for Performance Measurement, an independent government authority that monitors government performance, reported a few months ago that around 87% of the vision’s targets have either been achieved or are on track.

“We are focusing on the remaining 13% to bring them in line by prioritizing them accordingly,” he added.

He acknowledged that the Kingdom faces challenges in achieving Vision 2030 targets, particularly in human resources and execution capacity, and stated: “We aim to ensure we are unlocking further potential without overburdening the economy.”

Saudi Arabia is currently targeting a 40% female participation rate in the workforce by 2030, having already surpassed the original 30% target. Al-Jadaan highlighted that 45% of small and medium-sized enterprises are led by women.

He also noted that the country is working to align its economic plans with a private sector capable of complementing government efforts.

In one of the discussion sessions, Ashraf Al-Ghazawi, Saudi Aramco’s Executive Vice President, stated that the company produces the world’s lowest carbon-intensity oil. He noted that Aramco operates 17 cogeneration plants, contributing to a reduction of approximately 7 million tons of carbon emissions.

Additionally, Abdulrahman Al-Faqeeh, CEO of the Saudi Basic Industries Corporation (SABIC), revealed that the company successfully cut carbon emissions at its facilities by 12.5 percent by the end of last year compared to 2010.

Robert Wilt, CEO of the Saudi Arabian Mining Company (Ma’aden), highlighted the company’s accelerated efforts to shorten the copper extraction process.

He added: “We have made progress in reducing waste, water consumption, and carbon emissions.”