The British historian Philip Mansel, in his acclaimed two-volume work Three Eastern Cities (published in Alam Al-Ma’rifa series, Kuwait, January–February 2017), attributes the rise of Lebanese capital to local origins, distinguishing it from the financial structures of neighboring states, where foreign capital played a significant role in wealth accumulation. One key indicator of Lebanon’s economic evolution is the sharp increase in the value of imports and exports through the Port of Beirut, which surged from 10 million French francs in 1825 to 38 million in 1845 and 77 million in 1862.
Similarly, Zein Noor al-Din Zein, a professor of modern Near Eastern history, supports this view in his book The Rise of Arab Nationalism (1968). The Lebanese newspaper Al-Hayat further expanded on this perspective in an extensive front-page report published on April 25, 1952, asserting that “Beirut is replacing Cairo and Alexandria on the global stage and is emerging as a center for capital investment and stock exchange activity.”
A closer examination of this historical report reveals that Beirut had already become a regional financial hub before major political upheavals reshaped the Middle East. This transformation occurred prior to the overthrow of the Egyptian monarchy in July 1952, the fall of Iraq’s monarchy in 1958, and the rise of the Baath Party through military coups in Syria and Iraq in 1963 and 1968, respectively. These shifts, along with waves of nationalization in Cairo, Baghdad, and Damascus, prompted capital flight, a portion of which found its way to Beirut. Even before nationalization policies intensified, the strength of the Lebanese currency had reached its peak. According to a study published by Al-Raed Al-Arabi in August 1961, the value of the US dollar declined from 360 qirsh in 1953 to 300 qirsh in 1961. The same publication, in its February 1961 issue, reported discussions about making the Lebanese pound a regional currency across the entire Arab Levant.
At that time, Lebanon’s financial standing was gaining international recognition. A report by the financial division of the United Nations, published in Al-Hayat on February 20, 1965, ranked Lebanon among the top six countries globally in terms of financial strength and deposits, placing it first in the Middle East. Another report, titled “The Lebanese Pound Becomes Global,” underscored the significance of then-Prime Minister Hussein Al-Oweini’s financial policies, which ensured the stability of the Lebanese currency and its equal treatment with the US dollar. This stability was reinforced by Lebanon’s membership as an associate in the European Economic Community (EEC), positioning the country as a global economic bridge linking Europe, the United States, the Middle East, and Africa.
Lebanon’s Investment Climate and Capital Influx
Lebanon’s favorable investment climate, Beirut’s financial prominence, and its free-market economy attracted substantial amounts of Arab capital fleeing restrictive policies in their home countries. It is important to acknowledge that Palestinian capital played a particularly significant role in bolstering Lebanon’s financial ecosystem, even before Arab nationalization policies took effect. Several factors contributed to this, including the Israeli occupation, familial ties between affluent Lebanese and Palestinian businessmen, commercial partnerships, and the ease of maritime travel between Beirut, Acre, Haifa, and Jaffa. By contrast, the financial inflows from other Arab countries were not as substantial as often claimed, especially when compared to the capital held by Lebanese investors.
For instance, the collapse of Intra Bank in 1966—a financial institution that reportedly controlled over 30% of Lebanon’s banking deposits—did not lead to a devaluation of the Lebanese pound. As reported in Al-Hayat on December 23, 1966, an unnamed economist remarked that “Lebanon is far too large to be threatened by the failure of a single bank.”
Throughout Lebanon’s turbulent history, the strength of its financial sector remained notable. Despite enduring the repercussions of the June 1967 war, the political crisis following the 1968 parliamentary elections, armed clashes between the Lebanese army and Palestinian resistance factions, and the economic fallout of the October 1973 war, the national currency remained stable. Negotiations for Lebanon’s accession to the EEC resumed, as reported in Al-Anwar on December 14, 1972. An-Nahar further noted that on May 18, 1973, the US dollar had depreciated against the Lebanese pound. A 1975 World Bank report concluded that Lebanon was progressing toward a standard of living comparable to that of lower-income European countries.
The Reality of Syrian Deposits in Lebanon
These remarkable financial achievements were disrupted by the Lebanese civil war (1975–1990), which led to the withdrawal of substantial domestic and foreign bank deposits. Although Lebanon’s banking sector began recovering in the 1990s, the momentum was again halted after the 2005 assassination of former Prime Minister Rafik Hariri. Since then, Lebanon’s financial system has remained in turmoil.
Given this context, the figures cited by former Syrian President Bashar al-Assad and his successor, interim President Ahmad Al-Sharaa, regarding the volume of Syrian deposits in Lebanese banks—ranging from $40 billion to $60 billion—appear highly exaggerated.
According to financial estimates in Beirut, Lebanon’s financial collapse since 2019 has resulted in losses amounting to approximately $85 billion. Within this total, Syrian deposits are estimated at no more than $3 billion. Even if we accept a more liberal estimate suggesting that Syrian deposits constitute 10% of total bank deposits in Lebanon, the figure would barely exceed $8 billion.
Furthermore, historical data indicates that since 1996, non-resident deposits in Lebanese banks have averaged around 25% of total deposits, with more than half belonging to expatriate Lebanese. The remaining portion belongs to non-Lebanese investors, including Syrians and others. Even when translated into absolute figures, these numbers are far removed from the exaggerated claims made by both past and present Syrian leaders.
The Way Forward
It is evident that Syrian deposits in Lebanese banks belong to private individuals, just as Lebanese bank deposits do. These funds are not the property of the Syrian state, and thus, any resolution to this issue must apply to all depositors equally, without discrimination based on nationality. The complexity of Lebanon’s financial crisis requires a comprehensive and inclusive approach. Any attempt at segmentation will only hinder efforts to find an equitable solution.
Only a holistic resolution will suffice in addressing this longstanding crisis. May wisdom prevail in finding a fair and just settlement for all. God help us all.
Toufic Shoman is a Syrian research
This article was translated and edited by The Syrian Observer. The Syrian Observer has not verified the content of this story. Responsibility for the information and views set out in this article lies entirely with the author.
