Another facet of the war in Lebanon is the flight of foreign capitals that were supposed to enter this country real estate market. Thousands of Lebanese with double citizenships are also fleeing the country. Middle Eastern investors are looking for Muslim countries to absorb billions of extra petro-dollars. As in 1975 Lebanon just happens to be in the wrong place at the wrong time.

The war in Lebanon has many dimensions. Some of them are purely political and military; some are rather economic and financial. As the world is watching for the raids across the border with Israel, investors are already calculating their losses. Capitals that had to be invested in infrastructures, residential and commercial properties in Lebanon, would be moved to more peaceful countries. These capitals are mainly coming from Saudi Arabia, Kuwait, and the United Arab Emirates, which swim in a sea of petrodollars in desperate need of profitable investment abroad.

The capitals that were promised to Lebanon were conservatively estimated at billions of dollars. It was thus of no surprise that tens of thousands Lebanese with double citizenship moved back to the country during the recent years. Recent international operations of mass repatriation show that among these tens of thousands there were thousands of Americans and Canadians. Some of them are now back in North America, some are hoping to join them soon.

Officially Lebanon is a much poorer country than the United States or Canada. If we assume that this group of thousands of Lebanese with double citizenship was part of the middle class in North America then we may suppose that they were part of upper and upper middle class in Lebanon.

This clarification is essential for tracing the logic of the Middle Eastern foreign investors regarding Lebanon. As the peace returned to this country after the end of the civil war in 1990, and the new expensive oil started filling up the investment portfolios after 1999, the Lebanese with double citizenship began returning to Lebanon, and the investors began making plans how to satisfy their above the local average housing needs. The picture now however has been completely reversed. Some people who can choose between staying in Lebanon or fleeing to another country of citizenship make their plans to pass the war as far as possible from the theater of hostilities. Even those who have plans to stay in Lebanon are probably far from any investment plans after so many acts of destruction we've witnessed so far. Which opens the question where the real estate capitals that were promised to Lebanon would move to now?

The Middle East with all its booming population and lavish projects isn't able to absorb the entire wave of petrodollars. After 9/11 many private Arab capitals have been moved out from the Untied States. After some terrorist acts in Europe, e.g. Spain and Britain, this continent isn't a safe place for investments too. Lebanon now is taken temporarily out of any serious calculation. Free market and predominantly Muslim countries around the world, e.g. Malaysia and Turkey, have also limited absorbing capacity. The most probable scenario for the capitals thus will be to go back to North America and Europe despite the political risks.