America’s shiny new Middle East project can’t replace stability with profits

The US wants to create a special economic zone in southern Lebanon as an incentive to push the government to disarm Hezbollah.

The idea, first floated by US presidential envoy Tom Barrack on a September visit to Beirut, rests on a straightforward bargain: security in exchange for development. In line with UN Security Council Resolution 1701, the state would gradually reduce armed activity along the border and restore full army control over the south, and in return attract investment, business tax incentives, and political backing from partners including Gulf countries and Eastern Mediterranean initiatives.

To make this work, the zone is legally constituted with clear boundaries, unified rules on land and property, transparent tax and customs regimes, and straightforward jurisdiction and arbitration.

Financing blends grants, concessional loans, and private capital, backed by risk-mitigation tools and transparent procurement. Nationwide needs exceed $20 billion, of which roughly $10-11 billion would restart the economy and about $7 billion would rebuild the south, alongside an anticipated $3 billion program from the IMF.