A close examination of Lebanon’s economic collapse leads to a bitter truth: the state has “devoured” its own people. This “savage feast” could not have been cooked without a ruling system that kept the flames of state monopoly over vital sectors burning, while branding anyone who called for privatization a traitor. And when the fire began to die down in the early 2000s—amid international threats to withhold financial support—the system blew life back into it through regulatory authorities. Independent bodies intended to open markets to competition in electricity, telecommunications, aviation, and public works were born during the “Paris I” conference. But after securing the money, the resolutions remained ink on paper for more than a quarter of a century.

None of the demands to shrink the bloated public sector—which absorbs revenues and deepens debt—managed to make a difference. “We reached total collapse in 2019 as a result of the cumulative budget deficits, the non-productivity of public institutions, and their mounting losses year after year,” says Deputy Neemat Frem, head of the executive council of the “Human’s Nation’s Project.”

But the reality we have been stuck in for six years is not an inevitable fate; when the cause disappears, so does the effect. From this point emerged the idea of establishing a State Assets Investment Authority—known as “HUTAD”—inspired by successful international models, foremost among them the Greek experience. The idea quickly evolved into a draft law submitted by MP Frem to Parliament two months ago, and was publicly launched in a meeting with the Association of Economic Journalists.

The bill proposes the creation of an independent national public authority composed of six members appointed by decree, based on a joint recommendation from the Civil Service Board and an international recruitment firm, while observing sectarian balance. State-owned assets—whether fully or partially owned—would be placed under the authority's custodianship by decree issued by the Cabinet for a period between 30 and 50 years, renewable. The authority would prepare feasibility studies, strategic investment plans, and establish specialized commercial companies to manage the assets while overseeing their performance by representing the state on their boards. “HTAD” would also be tasked with attracting private-sector investors and eligible depositors. Assets would return to the state once the investment period ends or the companies are dissolved, according to mechanisms defined by the law.

Why the Proposal Matters

The proposal’s importance lies in the fact that it “protects public property from being sold off at throwaway prices due to the crisis—just as happened in Russia after the collapse of the Soviet Union,” Frem explains. It also establishes a new model that enshrines productivity and accountability. Most importantly, in his view, it revives the national economy, improves public services for Lebanese citizens, and creates an avenue—among others—for private investment opportunities for depositors whose funds were trapped in banks before the collapse.

According to the draft Financial Regularization and Deposit Recovery Law, depositors with more than $100,000 will receive “promissory notes” valid for 10 to 20 years. Holders of these notes may use them to buy shares in companies created to invest state assets, thereby ensuring they recover the full value—or even more—if these companies succeed and their share value rises.

The Public Sector Dilemma

Historically, Lebanon’s public sector has represented around 30% of the labor force. Over the years, it has owned about 70 institutions, most of which held monopolies or exclusive rights—such as electricity, telecommunications, water, tobacco production and importation, the casino, railways, and air transport.

Yet despite this massive portfolio of institutions, land, and public domains, their total output amounted to only $1.061 billion in the 2026 budget—merely 17% of total revenues.

These institutions serve as the political class’s “backyard garden,” where jobs are distributed and public contracts sealed. For this reason, MP Frem expects strong political resistance to his project from the majority.

A 21st-Century State

Limiting the state’s role to security and the judiciary—just as in most modern countries—and leaving institutions to be run by professionals could rescue Lebanon from its economic calamity and compensate for decades of lost opportunities.

According to Frem, transitioning to a 21st-century state aligns with three major goals embedded in the “HUTAD” project: raising the quality of public services, reducing their cost, ending political exploitation of state institutions, attracting capital, and ensuring fairness for depositors.

Beyond Existing Institutions

HUTAD’s mission and ambitions go far beyond improving and managing existing institutions. They extend to unlocking Lebanon’s untapped yet highly valuable investment potential.

The state holds sovereign rights to grant concessions and licenses on land, sea, and air public domains—including approvals for land reclamation, licenses to build artificial islands, rights to use airspace, telecommunications licenses, and more. These concessions are priceless, and so are their potential returns.

Existing institutions—and those that may emerge in response to future needs—would be placed “in trust,” for a temporary period, under the management of the State Assets Investment Authority, while guaranteeing the state a 30% share, described by Frem as the “blocking third.”

If implemented and insulated from political interference, this mechanism would strengthen institutional governance, increase productivity, improve service quality, reduce costs, and generate substantial revenues for the state—far exceeding current returns—that could be reinvested in social protection.