Lebanon—Economic Reform and Infrastructure Investment Programme (LERII)

Lebanon is at a critical moment in its history—its economy is in crisis and its citizens are increasingly unsatisfied. It is facing a fiscal crisis with an increasing budget deficit of 11 percent of GDP and a current account deficit of 25 percent of GDP in 2018, combined with the third-highest gross public debt in the world. Fiscal pressures are reflected in the lack and low quality of public goods and services, including inadequate infrastructure for electricity, water, waste, and transport, which particularly affects vulnerable people and harms businesses. Poor performance in the public sector, the lack of accountability in the management of resources, and corruption have further exacerbated the situation.

In response, and in the context of an increasingly unstable region, the Government of Lebanon has set out an economic reform vision and Capital Investment Plan identifying critical investments that will support growth and investment, providing employment opportunities for host communities and for Syrian refugees.

Awarded in 2020 under the Foreign, Commonwealth & Development Office’s General Economic Development Framework, LERII aimed to assist the Lebanese government in implementing these key economic reforms, to reach agreement on the construction of key donor-financed infrastructure projects, and to ensure that such projects were successfully built and operated. A more sustainable and higher-growth economy, accompanied by infrastructure investments, has the potential to significantly improve the lives of poor people, including girls and women and the large number of refugees currently in Lebanon.

With our partners—the Lebanese Economic Association, Economic Consulting Associates, Lebanese Earth Link & Advance Resources Development, and The Policy Practice—DAI provided technical assistance to the government ministries and agencies charged with planning and delivering infrastructure and economic reforms. This demand-driven assistance focused on problems identified directly by the Lebanese government, so that national stakeholders were engaged in the solutions and more likely to sustain their results.

Sample Activities

• Employ a problem-driven and strategic approach to identify reform priorities where genuine traction for reform lies and in response to specific government requests.
• Ensure national ownership and alignment with partners and the Government of Lebanon’s national reform agenda.
• Design a methodology for real-time monitoring and rapid feedback loops based on an understanding of the barriers faced by groups participating in supported initiatives to accessing information and providing feedback.

Although the project was due to run until 2024, FCDO decided to close the LERII-TAF program in June 2021 as a result of its 2021-2022 business planning and ODA re-prioritization. Below are some highlights of what the project achieved before closing.

Select Results

• Embedded political economy analyses (PEAs) supported the program’s adaptive approach by deepening its understanding of alternative pathways and mechanisms of change outside the caretaker government. This included how various formal and informal stakeholder groups are structuring and influencing debates, informing citizens, and shaping their demands.
• Informed the mapping of actions to be taken under different scenarios to ensure the sustainable impact of interventions, highlighting citizen-centric issues through policy roundtables.
• Proposed the program identifies and prioritizes select ministries to create the enabling conditions for reform at administrative levels (systems and processes).
• Identified champions within the government, such as in the Institute of Finance and the Ministery of Economy and Trade, who had started piloting reform models that could be replicated across other public institutions.