Lebanon’s ties with Saudi Arabia and the broader Gulf Cooperation Council (GCC) could be entering a new chapter following Lebanese President Joseph Aoun’s recent visit to the Kingdom and his meeting with Crown Prince Mohammed bin Salman. The visit, seen as a significant step amid Lebanon’s ongoing economic crisis and discussions on post-war reconstruction efforts, has been interpreted by analysts as a signal of revived relations between Lebanon and its Gulf allies.

Lebanon’s economy had already been struggling before relations with Gulf nations deteriorated in 2016, but the fallout led to further setbacks across several sectors. Contrary to the belief that Lebanese-Gulf ties are limited to tourism, their economic relationship spans agriculture, trade, real estate, and services.

Agricultural Sector Hit Hard

Saudi Arabia and Bahrain halted imports of Lebanese agricultural products in 2021, resulting in significant losses for Lebanon’s farming industry. According to customs data, Lebanon exports roughly 60 percent of its agricultural produce to the Gulf, a figure that rises to 75 percent when including Egypt. Ibrahim Tarchichi, head of the Farmers and Growers Association in the Bekaa Valley, estimated that the 2021 ban alone cost Lebanon around 55,000 tons of agricultural exports, inflicting losses of nearly $50 million.

Vegetable and fruit exports to the Gulf make up 55.4 percent of Lebanon’s total agricultural exports, amounting to approximately 315,000 tons annually. Saudi Arabia alone accounted for 16 percent of these exports, valued at $24 million, while Kuwait imported 59,000 tons worth $21 million. The UAE and Bahrain imported 31,000 and 2,300 tons, valued at $14 million and $7 million, respectively. 

Real Estate Decline

Lebanon’s real estate sector boomed between 2007 and 2016, with rising property values driven in part by Gulf nationals investing heavily in Lebanese real estate. However, this trend began reversing in 2016, when Gulf countries started withdrawing investments and nationals began selling off properties. The Saudi-Lebanese Business Council noted that this sell-off intensified in 2021 and 2022, with many Gulf citizens offloading properties in prime areas, including downtown Beirut.

Tourism Sector Struggles

Tourism, once a pillar of Lebanon’s economy, also took a severe hit. Gulf countries imposed travel restrictions on their citizens, causing a sharp decline in tourist numbers. Prior to the downturn, visitors from the Gulf accounted for more than half a million annual tourists. The peak years between 2009 and 2011 saw the tourism sector contributing about 20 percent to Lebanon’s GDP, generating revenues of $9.7 billion. The loss of Gulf tourists dried up a key source of foreign currency, further straining the economy.

Restaurants and Hospitality

The hospitality industry, closely linked to tourism, has been particularly hard-hit. The sector was already reeling from Lebanon’s economic crisis, the COVID-19 pandemic, and recent conflicts. However, the absence of Gulf tourists since 2016 has exacerbated the downturn. According to restaurant development consultant Mohammad Khodr, Lebanese restaurants began closing in large numbers starting in 2021, with losses estimated at around $500 million.

Data from the Syndicate of Owners of Restaurants, Cafes, Nightclubs, and Pastries in Lebanon shows that business activity in the hospitality sector has dropped by more than 50 percent. The number of establishments shrank from 8,500 in 2019 to 4,500 in 2020, and further to 3,400 by early 2021. As of 2024, 70 percent of restaurants in Beirut have shut down, with 30 percent relying solely on delivery services.

Wider Economic Impact

The economic fallout extends beyond agriculture, real estate, and tourism. Lebanon has seen declines in pharmaceutical manufacturing, medical tourism, supply chain networks, and investment in key sectors such as technology. Analysts believe the deterioration in Gulf relations has not only deprived Lebanon of crucial capital but also stunted potential economic growth in various industries.

President Aoun’s recent visit to Saudi Arabia has raised hopes that renewed cooperation with Gulf countries could help revive these struggling sectors. Whether this visit marks the beginning of a broader political and economic realignment remains to be seen.

This is an English adaptation of an article originally published by Al-Modon.