“Trump Economic Zone”: dream of peace and fear of conspiracy

The proposal to create an economic zone in South Lebanon, mentioned in August 2025 by US envoy Tom Barrack, created a shockwave. The theory behind the project of a “Trump Economic Zone” assumes that such a zone would attract foreign investment, finance reconstruction, thus guaranteeing lasting security. However, several voices have been raised to warn against the danger of undermining the sovereignty of the Lebanese state through the creation of an Israeli-American “protectorate” in the border area.

The project of a “Trump Economic Zone” is part of an approach adopted by the current US president to resolve conflicts through economic development and trade.

This approach is one of the foundations of liberal thought in international relations. Indeed, the theory of “sweet commerce” is based on the idea that economic exchanges between states constitute a factor of political stability and peace. By forging lasting commercial ties, countries become interdependent, which reduces the incentive to resort to war. This theory was popularized in the 18th century by Montesquieu, “Commerce softens and polishes barbaric customs,” he wrote, emphasizing that economic exchanges transform power relations into cooperative relations.

Trump proposed this idea for Gaza, through “Trump Riviera”, as well as in Ukraine, through the transformation of Donbass into a free zone that would benefit Russians as much as Ukrainians.

Conditional logic

According to Phillip Smyth, an American expert on the Middle East who worked at the Washington Institute and the Atlantic Council, the economic zone goes beyond the simple political framework and is based on an assumed conditional logic.

Smyth emphasizes that its implementation requires a high level of organization, planning, and coordination on the ground, essential conditions to reduce risks and attract credible investors. For him, this requirement constitutes a factor of seriousness and viability and not a brake on development.

Barrack indicated in August 2025 that Saudi Arabia and Qatar are ready to invest several billion dollars in the economic zone, a statement that was not commented on by those concerned. One thing is certain: these investments remain conditional on certain security guarantees, particularly the disarmament of Hezbollah. Some sources even mention potential investments of up to 10 billion dollars for infrastructure, industrial zones, and job-creating projects. However, these amounts remain to be confirmed by official commitments. According to Smyth, figures do not exist so far. These indications show a real interest in supporting the economic development of southern Lebanon and offering employment opportunities to local populations.

Break with the logic of ad hoc aid

Southern Lebanon, with a limited formal economic base, could benefit from significant multiplier effects: job creation, infrastructure development, stimulation of trade, and reduced dependence on external aid. The economic zone could thus initiate a dynamic of sustainable reconstruction and progressively restore economic confidence in this fragile region, Smyth affirms.

It aims to transform a region long marked by armed conflicts into a structured space, capable of attracting regional and international capital. This initiative seeks to break with the logic of ad hoc aid to favor reconstruction based on long-term investments.

The objective of this zone is to further integrate southern Lebanon into regional economic dynamics and to reduce the grip of political logics that have long dominated the local agenda.

For Lebanon, the stakes are clear: seize this opportunity to undertake structured and sustainable reconstruction, or let internal blockages, accentuated by Hezbollah's opposition, deprive the south of the country of a development perspective likely, in the long term, to reshape its economic and security future.

A state of economic destitution

The depth of the Lebanese crisis gives a particular resonance to this project. Since 2019, Lebanon's GDP has contracted by approximately 40%, according to the World Bank. This fall is in addition to a depreciation of the Lebanese pound of more than 98% against the dollar, leading to hyperinflation and a massive loss of purchasing power. In 2022, 44% of the population lived below the poverty line, or nearly 2.6 million people out of a population of approximately 5.8 million. Overall unemployment was estimated at 11.5%, but it exceeds 23.6% among young people aged 15 to 24, particularly affecting the south of the country. This accumulation of financial losses, destruction of infrastructure, and withdrawal of public investment has severely hit this region, highlighting the urgency of structural economic prospects.

Political test

According to Smyth, Hezbollah's opposition could prevent the project from materializing. This blockage directly affects the region's economic attractiveness by increasing the cost of risk for potential investors. The zone is supposed to modify this equation, by introducing concrete economic interests capable of transforming stability into a shared advantage rather than an externally imposed constraint.

The absence of a clearly affirmed Lebanese mandate is both a structural weakness and a revealing sign of the state's limits. Smyth notes that the project acts as a political test for the Lebanese authorities. More active state involvement could transform this external initiative into a national project, strengthen economic governance, and reassert institutional authority in a region largely dominated by parallel logics.

Hezbollah's opposition therefore remains the main obstacle. Its armed presence and political weight make it difficult to secure the zone and deter foreign investment. The condition set by Gulf investors — reducing Hezbollah's military influence — underlines how much the project's success will depend on the evolution of the local balance of power and the pro-Iranian militia's willingness to adapt to an economic dynamic that could, in the long term, reduce its influence over the south of the country.

Fears

On the other side of the border, Israel benefits from the creation of this zone. By transforming the border region into an economic hub, the project could reduce tensions and Hezbollah's military presence and create opportunities for indirect cooperation. Even if the ceasefire monitoring mechanism committee has not yet thoroughly examined the project, these initial consultations suggest that the economic approach could open new channels of dialogue between Beirut and Tel Aviv.

Several critical voices point to Israel's supposed desire to establish a security buffer zone, demilitarized and emptied of its inhabitants, on a model comparable to what it would seek to implement along its Syrian and Palestinian borders. Unconfirmed official information thus evokes the creation of large secure perimeters.

In Lebanon, these prospects fuel fears of indirect demographic transfer, in which local populations would be progressively displaced in favor of externally managed economic activity.

According to these same sources, the central concern lies in the risk that this mechanism would institutionalize lasting forced displacement, as the exodus continues since October 2023, in the absence of any clearly defined strategy for the return of displaced persons and the reconstruction of destroyed villages.

For the moment, Trump's project is reduced to a simple declaration, official certainly, but vague and temporary. The importance given to Barrack's statements reflects the country's economic distress and, by the same token, evokes the traditional Lebanese expectation of aid from abroad.