Economy Slow restart predicted for GCC aid to Lebanon By Nadim Kawach January 14, 2025, 5:04 PM Pexels/Charbel Karam Lebanon received at least $4bn in hard currency in remittances every year sent home by more than 800,000 migrants in the GCC Saudi ambassador expresses support UAE reopens embassy But no rush to send funds A resumption of badly needed GCC financial aid to Lebanon may take time, even though most Gulf countries have given their blessing to the new Lebanese president Joseph Aoun, according to observers. The six nations of the Gulf Cooperation Council were previously among the biggest aid donors and investors in Lebanon, before they cut assistance as Iranian influence in the country through its ally Hezbollah increased. Relations soured in 2021 after the then Lebanese information minister made hostile comments defending Yemen’s Houthis. GCC states promptly imposed a ban on imports, mainly agricultural products, from Lebanon. Aoun was elected president on Thursday January 9 after a 26-month gap. On Monday he named Nawaf Salam, a diplomat and president of the international court of justice, as prime minister. Hopes are high in the crisis-ridden country of 6.5 million people that international aid will now begin to flow and Lebanon can start the journey towards recovery. Following Aoun’s election the Saudi ambassador Waleed al-Bukhari said that “Saudi Arabia will stand by Lebanon, its people and president”. The UAE also re-opened its embassy in Beirut after a three-year hiatus. However analysts cautioned that, aside from humanitarian assistance, the Gulf states are likely to be more circumspect in disbursing aid and resuming investment. “The GCC countries want to see a new Lebanon, not a new Sudan hit by wars and divisions. That is what I have been told during our meetings in Saudi Arabia,” said Elie Rizk, chairman of the Lebanon-GCC Economic Development Agency (EDA), based in Beirut. New Lebanese president faces uphill task on economy Lebanon’s bonds rally after new president elected Middle East, not the West, should lead rebuilding, say experts Rizk said that the GCC states would not rush to send aid, fund rebuilding or even invest in Lebanon before confidence in the state was restored. “I can tell you that these countries are fed up with dealing with individuals and parties. Today they want to work with the Lebanese state and its official institutions, not with separate factions,” he said. Before a financial crisis in 2019 Gulf states accounted for nearly 85 percent of total foreign direct investment in Lebanon, while real estate assets by Gulf public and private sectors in the country exceeded $6 billion, according to the Lebanon-GCC EDA. It added that the GCC institutions and individuals, tempted to invest by the high interest rates on offer, also had around $20 billion deposited in Lebanese banks. Big Gulf investors such as Habtoor, Damac, Rotana, Emaar, National Bank of Kuwait, Qatar National Bank and Majid al-Futtaim have investments in the country. Habtoor Group operates the country’s only theme park, but it has been in dispute with the Lebanese state over alleged difficulties in repatriating funds. Now the main form of support comes in the form of at least $4 billion in hard currency in remittances every year by more than 800,000 Lebanese migrants in the GCC, the Lebanon-GCC EDA said. Figures by the Arab Monetary Fund (AMF), an Arab League agency based in Abu Dhabi, show GCC states have been the main aid donors to Lebanon over the past three decades. The AMF’s 2023 report showed that the Gulf gave more than half the $16.5 billion in development aid Lebanon received between 1990 and 2020. Another Lebanese analyst was more optimistic about the resumption of GCC aid after the election of a president and the fall of the former Syrian leader Bashar Al-Assad. “Lebanon has witnessed big changes following the fall of Assad and the subsequent developments related to Iran and Hezbollah,” said Antoine Farah, an author and economics professor. “We all know that the Gulf countries have distanced themselves from Lebanon over the past years. But today there is talk about a gradual resumption of their assistance,” Farah said. “I am encouraged by recent statements by the Saudi ambassador in Beirut that the Gulf nations are willing to help. This is a very good development.”