In a recent article, The Economist posed a compelling question: Why don’t more countries import electricity despite cross – border energy connectivity’s significant economic and financial benefits? This question is particularly relevant to Lebanon, where discussions about importing natural gas from Egypt and electricity from Jordan have persisted for years. Unfortunately, these initiatives never materialized.

For years, Lebanese officials have mastered the art of explaining why policies cannot be implemented rather than focusing on solutions to make them happen. Meanwhile, Lebanon continues to grapple with chronic blackouts. The additional 600 megawatts that could have been imported – equivalent to six extra hours of electricity – would have significantly eased the burden on citizens. It would have reduced reliance on costly private generators, alleviated the financial strain on households – where energy costs consume a substantial portion of monthly income – and decreased CO2 emissions.

While the Caesar Act sanctions have complicated Lebanon’s electricity deal with Egypt and Jordan – since the imported gas and electricity must transit through Syria – the lack of political will among Lebanon’s ruling elite to implement long – overdue reforms in the electricity sector played an equally, if not more, significant role in shelving the project.

A widening regional divide

In recent decades, the Arab region has witnessed a stark economic divergence. The Gulf Cooperation Council (GCC) countries have excelled in economic growth, development indicators, and innovation, while other Arab nations have fallen behind. Nowhere is this divide more apparent than in Syria and Lebanon.

Historically, Syria and Lebanon have been deeply interconnected – though not always for the right reasons. Between 1990 and the assassination of Prime Minister Rafik Hariri in 2005, the Assad regime exercised dominance over Lebanon. Since 2011, Lebanon has suffered from the spillover effects of the Syrian war, particularly the influx of refugees. At the same time, Iran and its proxies have further destabilized both countries, distorting formal economic activities, draining institutions, and eroding the rule of law.

A glimmer of hope amid crisis?

Recent developments in Syria and Lebanon have sparked renewed optimism that their trajectories might be reversed. The international community, including Arab and Western countries, has welcomed Syria’s regime change and the election of President Joseph Aoun in Lebanon, along with the appointment of Prime Minister Nawaf Salam. These political shifts have been met with promises of support to launch long – overdue economic recovery and reconstruction processes.
However, the scale of the challenge is immense. The cost of rebuilding Syria alone is estimated at between $250 billion and $400 billion. According to a recent UNESCWA study, Syria’s GDP has contracted by 64 percent since the war began in 2011. The Syrian pound lost approximately two-thirds of its value against the dollar in 2023, pushing inflation to an estimated 40.2 percent in 2024. Meanwhile, the country remains under heavy sanctions, financially blacklisted, and dependent on aid, with 16.7 million Syrians in need of assistance – more than half of whom face food insecurity.

Lebanon, on the other hand, continues to grapple with a multifaceted crisis marked by financial collapse, political deadlock, rising poverty levels, the protracted presence of Syrian refugees, and, most recently, a devastating conflict with Israel. These challenges have profoundly impacted the country’s population, economy, and infrastructure.

According to the World Bank, Lebanon’s real GDP contracted by 27 percent between 2019 and 2023, while poverty rates have more than tripled over the past decade, reaching 44 percent of the population. The estimated losses and damages from the recent war stand at $8.5 billion, nearly 50 percent of GDP.

A Marshall Plan for Syria and Lebanon?

The pressing challenges facing Syria and Lebanon raise critical questions about how their relief, recovery, and reconstruction processes should be structured – and, equally importantly, how they should be financed. Today, these two countries find themselves in a position similar to Western Europe after World War II, when the Marshall Plan was introduced. It would be a fatal mistake for Syria and Lebanon to compete separately for financial aid and reconstruction funds.

According to the same UNESCWA study, if Syria achieves stability, the combined GDP of Jordan and Lebanon is projected to increase by $0.6 billion in 2025 and $1.8 billion in 2026, largely due to trade expansion. This highlights the regional economic interdependence and the potential benefits of a coordinated recovery effort.

Yet, deeper existential questions must also be addressed. If the new Syrian regime is genuinely committed to a 180 – degree shift toward a private – sector – led economy, what impact will this structural transformation have on Lebanon?

Historically, Lebanon’s economic model was shaped by regional dynamics. The 1948 Arab – Israeli war redirected trade and transport flows from Haifa to Beirut’s port, while nationalization policies in Syria, Iraq, and Egypt turned Lebanon into a hub for financial services, tourism, and real estate investment. Given the profound transformations unfolding in Syria, would it be wise for Lebanon to attempt to resurrect the same economic model? Or should it adapt to these changes and rediscover its comparative advantage in a new regional economic landscape?

A roadmap for sustainable prosperity

Syria and Lebanon do not merely need financial support for reconstruction; they require a comprehensive development strategy to put them on a path toward sustainable prosperity. The primary objective should be to reintegrate these two countries into the international economic system, breaking the patterns of illicit trade, money laundering, and extortion networks that have flourished due to the absence of effective governance.

A Levant approach – one that connects Syria and Lebanon for the right reasons and aligns them with the broader Arab and international economic order – will be critical to ensuring that both nations break free from cycles of conflict, instability, and economic distress. Only then can they hope to achieve long – term economic recovery, attract investment, and offer their citizens a future beyond mere survival.