Lebanon's new government is committed to implementing key reforms to lift the country out of its economic crisis, but the nation's new economy minister said such changes could take time.
“Lebanon is in a fairly complex situation, and we know it's a long road ahead, and we know there's a lot that needs to be done, and … it's not going to be done overnight. We understand what needs to be done,” Amer Bisat told The National on Tuesday.
The new government has implemented several reforms since forming earlier this year, but the International Monetary Fund has said more are needed. Among top priorities are depositor protection and banking resolution.
This week, Mr Bisat is part of a Lebanese delegation in Washington for the 2025 IMF and World Bank Spring Meetings to demonstrate Beirut's commitment to growth and reform.
Lebanon is in a fairly complex situation, and we know it's a long road ahead
Amer Bisat,
Lebanon minister for economy and trade
Lebanon is seeking a new programme with the IMF, one which Mr Bisat described as a “a purely Lebanese government programme”.
“This is not about going out there and asking for people to tell us what to do. This is we are here to explain what we want to do,” he said.
Mr Bisat said the delegation has three messages this week: one of unity and commitment to reform, holding discussions with the fund and international partners on the country's programme, and a “message of realism”.
“Everybody in the government is committed to reform, and the objective is growth,” he said. “We understand it's complicated, and it's going to take a while.”
Lebanon has been mired in economic crisis since 2019, exacerbated by last year's war between Hezbollah and Israel. The World Bank estimates Lebanon's reconstruction and recovery efforts will cost $11 billion.
“Lebanon has no business being where it is,” Mr Bisat said.
The election of Joseph Aoun as the Lebanese President earlier this year ended a power vacuum that had existed since 2022, and his appointment of Nawaf Salam as Prime Minister boosted hopes that the country could resolve its protracted crisis.
Mr Bisat, a former BlackRock executive, was appointed as minister for economy and trade in February.
This week's gatherings come about a month after the IMF staff conducted a fact-finding mission to Beirut, where it held discussions with Mr Aoun, Mr Salam and other officials.
It is “too early” to guess how much money Lebanon will request from the IMF, Mr Bisat said. Lebanon reached an agreement with the IMF in 2022 that would unlock about $3 billion in funding contingent on required reforms that Beirut did not meet.
Mr Bisat said he expects discussions with the fund to continue over the next few weeks or months. Discussions are expected to focus on monetary policy, public finance, financial markets, the banking sector, depositors and electricity infrastructure.
First steps
Key among those reforms is the restructuring of the banking sector.
The country's economic collapse in 2019 was blamed on decades of financial mismanagement, and changes to the banking sector are seen as a crucial step towards Lebanon securing economic assistance from international partners.
Mr Bisat reiterated his pledge to ensure depositors receive their funds which are frozen in the country's banks. Depositors have been waiting for their funds to be released for years.
He anticipated three steps: removing bank secrecy, establishing a bank resolution framework and following through with the enforcement of resolutions. Lebanon is currently waiting for a law to be passed in the parliament that would lift bank secrecy.
“It's going to take a while … but we're cautiously optimistic,” Mr Bisat said, adding that these reforms are “extremely important” to rebuilding foreign investors' confidence.
He anticipates this renewed confidence would help patriate its labour force, bring in investments and help establish long-term planning.
“Confidence is extremely important to get Lebanon back to where it should be. Lebanon has no business being where it is,” Mr Bisat said.
Tariff impact
Like much of the world, US President Donald Trump's tariffs are expected to have some effect on Lebanon's economy.
Lebanon's exports to the US in 2023 were totalled at $194 million, relatively small compared to America's main trade partners, meaning the direct result of the new tariffs on Beirut will likely be minimal.
At $194 million, Lebanon's exports to the US are relatively small compared to America's main trade partners, meaning the direct result of the new tariffs on Beirut will likely be minimal.
“However, the indirect impact will be quite significant,” Mr Bisat said, pointing to the country's diaspora and a global downturn's impact on oil prices.
New forecasts from the IMF this week anticipate the global economy to slow from a 3.3 per cent pace last year to 2.8 per cent this year. The fund also raised its recession probability, although one is not currently in its forecast.
Still, he hope's the country's geographical location and human capital could benefit Lebanon in the global trade reset.
“Whenever you get these major shifts in trade relations of the kind that we're seeing right now, there is always winners and there are always losers. We like to believe that we could be part of the winners,” Mr Bisat said.
He believes Lebanon is well-positioned as a near-shoring destination for European producers which could be more directly impacted by the tariffs.
“It's a double-edged sword. We could be hurt by a recession … but we could benefit from the rerouting of the supply chain.”
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
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The biog
Birthday: February 22, 1956
Born: Madahha near Chittagong, Bangladesh
Arrived in UAE: 1978
Exercise: At least one hour a day on the Corniche, from 5.30-6am and 7pm to 8pm.
Favourite place in Abu Dhabi? “Everywhere. Wherever you go, you can relax.”
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Try out the test yourself
Q1 Suppose you had $100 in a savings account and the interest rate was 2 per cent per year. After five years, how much do you think you would have in the account if you left the money to grow?
a) More than $102
b) Exactly $102
c) Less than $102
d) Do not know
e) Refuse to answer
Q2 Imagine that the interest rate on your savings account was 1 per cent per year and inflation was 2 per cent per year. After one year, how much would you be able to buy with the money in this account?
a) More than today
b) Exactly the same as today
c) Less than today
d) Do not know
e) Refuse to answer
Q4 Do you think that the following statement is true or false? “Buying a single company stock usually provides a safer return than a stock mutual fund.”
a) True
b) False
d) Do not know
e) Refuse to answer
The “Big Three” financial literacy questions were created by Professors Annamaria Lusardi of the George Washington School of Business and Olivia Mitchell, of the Wharton School of the University of Pennsylvania.
Answers: Q1 More than $102 (compound interest). Q2 Less than today (inflation). Q3 False (diversification).
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