Prince Faisal bin Farhan Al-Saud visited Beirut on Thursday, the first trip to Lebanon by a Saudi foreign minister in 15 years.
The visit coincided with early signs of recovery in Lebanon’s economy as it improves relations with Gulf states and others following the election of President Joseph Aoun.
After his meeting with Aoun, Bin Farhan told reporters that Saudi Arabia had “great confidence” in the president and the prime minister-designate’s “ability to work on the necessary reforms to build safety, stability and a united Lebanon”.
He stressed the need for economic reforms to address the ongoing economic crisis saying: “These reforms will boost the confidence of Lebanon’s partners and open space for the country to regain its rightful place in the Arab and international spheres.”
The UAE reopened its embassy in Beirut last week, which had been closed since 2021.
Economic relations between Lebanon and Saudi Arabia have been essentially frozen since the kingdom banned Lebanese imports in 2021. Much of its frustrations stemmed from concerns about the influence of Hezbollah and Iran over the government.
Hezbollah’s war with Israel has left it far weaker, militarily and politically, as has the collapse of the Assad regime in Syria. The party’s decline served as the catalyst for Aoun to take office after two years in which the position was vacant.
Bin Farhan is among those pushing for the new president to appoint a government quickly. Saudi Arabia is part of the quintet of countries – the others being the US, France, Egypt and Qatar – that have worked to install a new Lebanese president since the vacuum first appeared two years ago.
“We will need to see a commitment to a Lebanon that is looking to the future, not to the past, in order for us to raise our engagement,” bin Farhan said earlier this week at the World Economic Forum in Davos.
There has already been renewed interest from “foreign and Arab private investors” over the past month and a half, according to Marwan Barakat, chief economist at Bank Audi.
Barakat said that some “have already announced their readiness to invest in the country”. He said this was “likely to significantly impact private investment and ultimately growth in Lebanon”.
Saudi Prince Alwaleed bin Talal announced on 14 January his intention to reconstruct and reopen the Four Seasons in Beirut by the end of the year, praising what he called “a new era in Lebanon”.
In an interview with Arab News last week, Emirati billionaire Khalaf Al Habtoor, who has long sparred with the Lebanese government over its handling of the economy, said he hoped to reopen and reinvest in his ventures in Lebanon, beginning with a five-storey shopping centre in Beirut.
Following Bin Farhan’s visit, Al Habtoor tweeted on Thursday that he was planning to develop a “large and ambitious” project following the formation of a government in Lebanon, although he did not provide any details.
The prices of Lebanon’s eurobond have jumped since the ceasefire with Israel was announced in early December. These defaulted eurobonds, which fell to a low of 6 cents to the dollar following the onset of the crisis in 2019, rallied to 9 cents last month amidst speculation a war-weakened Hezbollah would allow for economic renewal. Since then they have reached 17 cents, their highest in more than five years.
Barakat said that a “positive scenario” is more likely than not, which would see real GDP growth of 8 percent in 2025, after six successive years of contraction.
Renewed investment from abroad would also give the central bank an opportunity to bolster the Lebanese pound and replenish its foreign reserves.
As of mid-January, the bank’s foreign reserves stood at $10.35 billion, having dropped by almost a third from $14.53 billion the previous year.
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