The Great Illusion (2002–2017)

For years, Lebanon appeared to be defying gravity. As we rebuilt from the civil war, our external debt climbed steadily, reaching over $70 billion. But look closely at the blue line in the chart below.

Our reserves (the blue line) seemed to keep pace with our debt (the red line). This created a sense of security; for every dollar we owed, we seemed to have a dollar in the vault. But this correlation was an illusion. The reserves weren’t built on productivity; they were built on the very debt we were accumulating. We were borrowing to pay the interest on what we had already borrowed.

The Turning Point (2018–2019)

The story takes a dark turn in 2018. Notice the divergence in the first chart: Debt continued its upward march, hitting nearly $80 billion, while reserves began a steep decline. The “leakage” had begun. Money was flowing out faster than it could come in.

But where was the money coming from, and why did it stop?

The Tap Runs Dry

The bar chart below reveals the culprits behind the crash. For nearly a decade, commercial banks (the green bars) were the engines of this debt machine, pouring billions into the system.

Then came the shock. In 2019, the green bars didn’t just shrink—they flipped. Commercial bank lending turned negative, representing a massive contraction and capital flight. At the same time, the bond market (orange bars), which had been a steady source of cash, flatlined.

Conclusion

The data tells a tragic 3-minute story: A decade of debt-fueled growth created a fragile bubble. When the banks pulled the plug in 2019, the illusion shattered, leaving a nation with $70 billion in debt and a reserve tank running on empty. As we look to the future, any recovery plan must start by acknowledging these red and green bars—the undeniable accounting of a system that consumed itself.