Fallen Cedar: Lebanon's Debt Diplomacy, 2015–2020

Abstract This article examines Lebanon's economic crisis, with a focus on the international debt negotiations and financial interventions from 2015 to 2020, arguing that it stemmed from a failure not only of economic policies but of trust—both between Lebanon and its creditors as well as among domestic actors. The study traces the limitations of Western‐led debt diplomacy, from the unsuccessful Paris conferences to the 2018 CEDRE initiative, which conditioned financial assistance on neoliberal reforms without collaboratively addressing Lebanon's underlying structural economic and governance deficiencies. The Banque du Liban's financial‐engineering strategies, designed to sustain capital inflows, ultimately exacerbated economic instability, leading to currency devaluation, capital controls, and social unrest. The article concludes that Lebanon's default was not a strategic reset but an economic surrender that followed decades of conducting economic policy in an environment devoid of trust among relevant actors. The Lebanon case demonstrates the need for a reimagined approach to debt diplomacy, one that de‐emphasizes ad hoc, transactional financial arrangements and prioritizes trust building, shared responsibility for reform and reconstruction, and a collaboratively agreed‐upon and funded plan for sustainable economic growth.