Lebanon has established its first fully functional government since 2022, following a decree signed by newly elected President Joseph Aoun and Prime Minister Nawaf Salam. The announcement on Saturday (February 08) ended the tenure of the previous caretaker administration and introduced a 24-member cabinet equally divided between Christian and Muslim representatives, in accordance with Lebanon’s sectarian power-sharing system, reported international media.
Prime Minister Salam, a former International Court of Justice president, was appointed less than a month ago. His government faces an uphill battle to address Lebanon’s ongoing economic collapse, now in its sixth year. The crisis has devastated the country’s banking sector, crippled its electricity services, and pushed many Lebanese citizens into poverty, with many unable to access their savings.
My Lebanon is a serene mountain sitting between the sea and the plains, like a poet between one eternity and another.
– Khalil Gebran
The formation of the new cabinet coincides with Lebanon’s efforts to rebuild its war-torn southern region after a destructive conflict between Israel and Hezbollah. The war, which ended in November through a U.S.-mediated ceasefire, left significant damage in its wake and heightened security concerns along the southern border.
This political shift signals Lebanon’s desire to strengthen relations with Saudi Arabia and Gulf nations, distancing itself from leaders aligned with Hezbollah, in hopes of fostering regional stability and economic recovery.
Lebanon has faced a tumultuous period since 2019, marked by an unprecedented economic collapse, political instability, massive protests, and rising regional tensions. The crisis, described by the World Bank as one of the worst economic depressions in modern history, has profoundly impacted Lebanese society. These developments have been compounded by political paralysis, sectarian divisions, and external pressures, leaving Lebanon on the brink of collapse.
Lebanon’s current challenges have deep roots in its post-civil war political system, which relies on a sectarian power-sharing arrangement. This system has often resulted in political gridlock and corruption, preventing significant reform. The country’s vulnerability increased with the Syrian civil war spillover, an influx of refugees, and growing external influence from regional actors like Iran and Saudi Arabia.
By 2019, discontent had reached a boiling point, fueled by government mismanagement, corruption, and the looming economic crisis.
Lebanon of 2019
The trigger was seemingly small, a government proposal to impose a tax on WhatsApp calls, but the reaction was swift and overwhelming. In October 2019, thousands of Lebanese citizens from all walks of life poured into the streets, demanding the resignation of the political elite and an end to decades of corruption. For a moment, the protests seemed to transcend Lebanon’s sectarian divides. The demonstrations quickly became known as the “Thawra” or revolution, with chants of “All of them means all of them,” targeting the entire political class. Faced with mounting pressure, Prime Minister Saad Hariri resigned in late October 2019, but his departure did little to satisfy the protesters’ broader demands for systemic change.
The optimism of the October protests soon gave way to political stagnation. As the momentum for reform waned, Lebanon’s entrenched political factions regained control. Efforts to form a technocratic government were repeatedly stalled by infighting among rival parties.
Economic Collapse and Hyperinflation (2020–2023)
The country’s economic situation spiraled out of control, plunging Lebanon into one of the worst financial crises in modern history. The Lebanese pound lost more than 90% of its value, while inflation and unemployment skyrocketed. The banking sector, once considered the cornerstone of Lebanon’s economy, effectively collapsed. Depositors found themselves unable to withdraw their life savings as capital controls were imposed without any legal framework.
The consequences of this financial collapse were devastating. More than 80% of the population fell below the poverty line, and basic services such as electricity, fuel, and clean water became scarce. Hospitals struggled to remain operational due to shortages of medical supplies, while long power cuts became the norm. The exodus of skilled professionals, including doctors and engineers, weakened an already strained infrastructure. For many, survival depended on remittances from family members abroad or humanitarian assistance from international organizations.
Beirut Explosion
On August 4, 2020, Lebanon suffered another blow with the catastrophic explosion at the Port of Beirut. The blast, caused by the detonation of 2,750 tons of ammonium nitrate stored unsafely for years, killed more than 220 people, injured thousands, and left large parts of the capital in ruins. The explosion was a stark reminder of the depth of negligence and corruption in Lebanon’s bureaucracy. Public outrage surged once again, and renewed protests demanded accountability.
The government of Prime Minister Hassan Diab resigned in the aftermath, but attempts to investigate the incident and hold officials accountable were repeatedly obstructed. To this day, the victims and their families are still seeking justice.
Political Deadlock
As Lebanon descended into the blackhole of crisis, political deadlock became the norm. Rival factions, including Hezbollah and its allies on one side and Western-backed groups on the other, engaged in prolonged battles over government formation. Lebanon went for months without a fully functioning government in both 2020 and 2021. Parliamentary elections in May 2022 offered some respite, as independent and opposition candidates made gains. However, no single bloc secured a majority, and the paralysis continued.
Hezbollah in Lebanon Politics
The role of Hezbollah in Lebanese politics has been a particularly divisive issue. While Hezbollah remains a powerful force, both militarily and politically, its influence has grown increasingly controversial. Its alignment with Iran has deepened Lebanon’s involvement in regional conflicts and strained relations with Gulf countries.
Occasional clashes between Hezbollah and Israel along the southern border have raised fears of renewed conflict, while Saudi Arabia and other Gulf states have taken a more cautious approach to their engagement in Lebanon.
External Actors in Lebanon Politics
The role of external actors in Lebanon’s crisis has been both influential and polarizing. Iran’s support for Hezbollah has cemented its strategic influence. In fact it has transformed Lebanon into a key component of its regional agenda. Hezbollah’s increasing military and political power aligns Lebanon closer to Iran. This unnecessarily exacerbates tensions with Israel and straining relationships with Gulf nations.
Saudi Arabia and the United Arab Emirates, once major economic backers, reduced their involvement due to Hezbollah’s dominance but recently reengaged cautiously, seeking to counterbalance a Shi’ite Iran’s influence.
Western countries, led by France and supported by the United States, have provided diplomatic and financial support but insist on structural reforms as a condition for aid. French President Emmanuel Macron took a personal interest, initiating multiple mediation efforts, yet progress has been limited. The International Monetary Fund (IMF) has also offered assistance, but the lack of political consensus and reform implementation continues to block access to much-needed funds, leaving Lebanon stuck in limbo.
Economic Recovery Prospects
The prospects for Lebanon’s economic recovery remain uncertain and depend heavily on comprehensive reforms and political stability. The financial crisis, described as one of the worst globally, cannot be addressed without restructuring the banking sector, reducing public debt, and restoring confidence in the Lebanese pound. Naturally, President Aoun has his work cut out for him.
It would be important to involve reaching an agreement with the IMF to release billions of dollars in financial assistance. But the IMF has made it clear that aid will be contingent on structural reforms, including fiscal consolidation, anti-corruption measures, and governance improvements. So far, political deadlock and vested interests have delayed these reforms. It has left Lebanon trapped in a cycle of economic stagnation.
Beyond external assistance, Lebanon has to rebuild its productive sectors, especially agriculture and industry, which have been neglected for decades in favor of a rentier economy based on remittances and banking. Encouraging small and medium-sized enterprises (SMEs), supporting digital innovation, and revitalizing the tourism sector could provide opportunities for growth and job creation. Regional economic integration, particularly with Gulf countries, could also open new markets if diplomatic relations improve.
Ultimately, recovery will require restoring public trust and addressing widespread corruption. Without serious reform, Lebanon risks prolonged instability and further economic decline, but with a cohesive national strategy, recovery remains possible.
Lebanon’s crisis is a microcosm of broader regional tensions and the consequences of decades-long mismanagement. While the challenges are immense, the resilience of the Lebanese people offers hope. The coming years will be very important in determining whether Lebanon can pull back from the brink and rebuild a more just and sustainable future.
