American University of Beirut

Privatization of Lebanon’s Public Assets: No Miracle Solution to the Crisis

​​​​​​Research Report

Albert Kostanian, Senior Policy Fellow for Economics at the AUB Issam Fares Institute


As Lebanon is facing an unprecedented economic and financial crisis, the privatization of Publicly Held Assets (PHA) has been proposed as a silver bullet solution, with little evidence to support such claims. PHAs are the martingale of the debate; a trick that will purportedly ease the government’s proposed plans to get the country out of the current deadlock. Nevertheless, proponents of the debate have generally treated the valuation of PHAs superficially. 

Furthermore, the question of privatization in Lebanon cannot be approached through the lens of loss remediation alone, nor as a mere option to reduce or complement the bail-in of depositors stuck in the Lebanese banking system. While privatization can theoretically alleviate losses borne by the financial system, any decision to sell off state assets must be weighed based on economic and social criteria that will contribute to the long-term objective of improving the population’s overall welfare in a sustainable manner. This study aims at filling this gap by assessing the benefits and risks associated with the privatization of selected PHAs in Lebanon using the following framework of criteria: 

  1. The competitiveness and efficiency brought to the sector by private sector participation, 
  2. The service or public goods’ accessibility to citizens, 
  3. The impact on the treasury.
We also attempt to quantify the value of selected PHAs in Lebanon with acceptable accuracy using a best estimation per sector, based on information we were able to collect, and other readily available resources. The PHAs included in this study are: Middle East Airlines (MEA), Casino du Liban, Regie Libanaise de Tabacs et Tombacs, Lebanon’s airports a​nd ports, state‑owned real estate, the telecommunications sector (fixed and mobile), Electricite du Liban, and the water establishments.

​Download the full research report, here.​

Download the summary, here​. ​

Read the summary in Arabic, here​.

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