Seizing the Sanctions Shift: Lebanon’s Policy Roadmap in a Changing Regional Order

A Regional Opening: Strategic Imperatives for Lebanon

In May 2025, U.S. President Donald Trump announced the lifting of international sanctions on Syria during a summit in Riyadh, a decision aligned with Gulf regional priorities. This diplomatic inflection point marks Syria’s gradual reintegration into Arab and global economic frameworks. For Lebanon, which remains mired in financial collapse and institutional stagnation, the moment offers a rare opportunity to reposition itself as a logistical and political conduit within a changing regional order.

However, Lebanon’s response, must be swift, credible, and strategically sequenced. The path forward hinges on six interdependent areas of engagement: trade and transit infrastructure, sectoral economic revitalization, customs modernization, regional diplomacy, refugee policy, and border delineation. Advancing these priorities requires credible governance reforms and a sequenced approach to regional reintegration in the wake of Syria’s re-entry into the international fold.

Six Strategic Pillars of Engagement

Lebanon's re-engagement with the region must be shaped by a clear understanding of its core priorities. The following six pillars represent the critical domains where policy action can generate the greatest impact. Each pillar is interdependent and reinforces Lebanon's ability to capitalize on the post-sanctions environment while addressing its internal vulnerabilities.
 

1. Transit Trade and Infrastructure Revival
   Lebanon can capitalize on reopened Syrian crossings (e.g., Jaber–Nassib, Al-Qaim) and leverage Tripoli’s upgraded port to reclaim regional trade flows. Prior to 2011, Lebanon moved a significant portion of exports overland through Syria. World Bank estimates suggest restoring these routes could reduce Lebanese shipping costs by 25–35%. However, this requires rehabilitating damaged infrastructure (notably Syria’s Homs–Damascus corridor) and modernizing Lebanon’s customs systems, which remain only partially digitized. Institutional reform, aligned with IMF-supported port automation programs, is also critical. As a contingency measure, Lebanon should prepare the Port of Beirut as a fallback trade corridor in case renewed Syrian instability disrupts the Tripoli–Homs axis, ensuring uninterrupted regional connectivity and trade resilience.
    
2. Economic Spillovers and Sectoral Opportunities
   Lebanon’s construction, manufacturing, and banking sectors may find emerging opportunities in Syria’s reconstruction, which is expected to require between $250 billion and $400 billion in long-term recovery and development efforts. Cement and construction material firms are well-positioned to support such rising demand. Energy integration presents another opportunity. The Arab Gas Pipeline, if fully rehabilitated, could reduce Lebanon’s energy import bill by up to 40% as per ESCWA 2023 estimates. To mitigate supply risks, Lebanon could establish a World Bank-managed Stabilization Fund, activated by energy price spikes or logistical disruptions. Capturing these benefits hinges on restoring capital controls, strengthening procurement oversight, and ensuring financial system reform.
    
3. Customs and Border Cooperation
   Persistent smuggling and informal trade undermine state revenue and border credibility. While Lebanon has begun joint customs coordination with Syria and considered scanner upgrades (~$50M), success will depend on sustained enforcement. Digitized, risk-based inspections are essential. International collaboration with United Nations Office on Drugs and Crime (UNODC) and INTERPOL must be expanded. Failure to modernize customs risks reinforcing Lebanon’s status as a secondary route for illicit flows, weakening its case for donor support.
    
4. Political and Diplomatic Realignment
   Lebanon’s previously polarized stance on Syria is giving way to pragmatic cooperation on economic and security issues. This realignment is essential to synchronize with evolving Gulf-Syria relations. Credible internal reforms-especially judicial and financial- are a precondition for Lebanon’s diplomatic relevance. Initiating a structured national dialogue on refugee returns, border policy, and economic coordination with Syria is strongly advised.
    
5. Refugee Repatriation and Social Stability
   Sanctions relief removes one of Damascus’s key barriers to enabling large-scale returns. Lebanon should coordinate closely with UNHCR and regional partners to initiate voluntary, rights-based repatriation to secure Syrian zones. Parallel support must continue for vulnerable Lebanese host communities. Dual-track approaches-safe return for those eligible and conditional economic inclusion for those who remain-are recommended. Lebanon could unlock donor flexibility while easing local tensions. 
    
6. Border Delineation and Sovereignty Gains
   In May 2025, France transferred a set of Mandate-era archival maps to Lebanon, enabling the country to initiate long-overdue border delineation talks with Syria. This diplomatic gesture, backed by trilateral coordination between France, Lebanon, and Syria, opens a technical and politically pathway to resolve long-contested land and maritime boundaries. Anchoring the process in historical documentation could strengthen Lebanon’s sovereignty claims, improve customs governance, and reinforce regional stability. Empowering border municipalities—especially along the Syrian frontier—will be essential for managing smuggling, stabilizing host communities, and implementing border-related reforms.

Internal Positioning: SWOT Summary

Understanding Lebanon's internal landscape is essential for assessing its readiness to engage with shifting regional dynamics. The following SWOT matrix highlights key structural strengths and weaknesses, as well as emerging opportunities and external threats. This snapshot provides a foundation for prioritizing interventions and aligning domestic capacity with external openings.

Strategic Risks: Prioritization Matrix 

The following matrix outlines the most pressing risks Lebanon could encounter while pursuing its post-sanctions recovery agenda. Each scenario is assessed using a standard risk formula: multiplying its likelihood by its potential impact (scored from 1 to 5). The resulting score helps prioritize actions and allocate institutional and donor attention where it's most urgently needed. Mitigation strategies are presented in concise form, offering pathways for risk reduction through technical, financial, or governance-related interventions.
 

Phased Policy Roadmap (2025–2030)

A Moment That Must Not Be Missed

The lifting of sanctions on Syria isn’t just a diplomatic shift—it’s a signal that the region is moving on, and Lebanon must decide whether to move with it. With trade routes reopening and Gulf countries adjusting their approach, the opportunity is there for Lebanon to reinsert itself into the regional map. But this chance won’t wait long.
Real progress will require more than reform roadmaps—it demands enforceable commitments and credible follow-through. It will require a serious commitment to political responsibility, institutional reform, and the kind of governance that restores trust—both domestically and abroad. One message has become unmistakably clear: international partners will not support Lebanon’s recovery while armed groups continue to operate outside the state. What used to be a long-term debate about sovereignty has now become a clear condition for regional reintegration and unlocking vital support.
Lebanon doesn’t lack potential. It has the location, infrastructure, and people to once again serve as a link between economies and ideas. But to get there, it has to prove that it can govern with credibility and act with purpose. This is a window—and it may not open again. Lastly, disarmament is no longer a distant goal—it is now a prerequisite for donor support and the restoration of state sovereignty.

This executive summary is an excerpt of a longer technical report prepared by RECODE. To access the full report or request additional information, please contact us at [email protected].