Before and after: How did Lebanons economic history shift with the outbreak of the civil war

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Once considered an economic beacon in the Middle East, Lebanon had a different financial landscape before the devastating civil war.

Let us take a recent look back at the country's economic history, which reveals a stark contrast between its past prosperity and the challenges it faces today.

In 1972, Lebanon had a surprising financial connection to India. An agreement was signed for a loan issued by the Mashreq Bank in favor of the State Bank of India, totaling LBP 15 million, over five years (December 12, 1972).

Yes, in Lebanese lira!

At the time, many Lebanese officials viewed this as a step towards international engagement while using their national currency.

Furthermore, Lebanon owed debts to the World Bank, a global institution that offers loans and grants to countries worldwide. Lebanon, which is now seeking assistance from the World Bank in various areas to address its ongoing crises, was once among the countries providing aid.

In early 1973, Lebanese banks raised funds to offer a loan to the World Bank, totaling LBP 75 million. This move was considered to strengthen the Lebanese lira and increase its demand.

During those times, Lebanon's financial stability was evident as it extended its financial reach even to Canada.

In 1972, Canadian authorities expressed their willingness to borrow from Lebanon in Lebanese lira (October 28, 1972). This was the situation before 1975.

The Lebanese lira was once considered reliable and robust, and the country had financial discipline and did not need any loans.

However, everything changed after the outbreak of the civil war as political party leaders took control, leading to corruption, accumulating debt, and financial turmoil.

The country's economic situation deteriorated further, leading to the approval of budgets with significant deficits, a development that some considered an achievement.

In contrast, countries like Germany and Japan, which faced comprehensive destruction during World War II, managed to rebuild their economies into global powerhouses through visionary long-term planning.