Lebanon’s new president, Joseph Aoun, who will serve a six-year term after a two-year vacancy in the office, is mobilizing support and traveling around the Arab world to set the country on the international map again with a new legacy. Meanwhile, local actors are scrambling to name someone for one of Lebanon’s most critical jobs: the central bank governor. The expectations placed on the country’s new leaders are immense, but so are the challenges ahead. 

From crisis to a fragile opportunity 

Lebanon’s collapse began nearly six years ago, in October 2019 with mass protests, bank closures, and a financial system in freefall. Since then, the Lebanese pound has lost 98 percent of its value. Gross domestic product (GDP) plummeted from $55 billion to nearly $20 billion. A political vacuum left the country without a functioning presidency and only a caretaker government for years. 

On top of this financial and political turmoil came a series of devastating shocks. The COVID-19 pandemic—disruptive for the world—was particularly crippling for Lebanon, a country heavily reliant on imports. Then came the August 2020 Beirut port explosion, killing at least 218 people, injuring more than 6,000 and leaving parts of the capital in ruins. 

Most recently, Lebanon endured another devastating war between Israel and Hezbollah, killing more than 4,000 people and destroying entire regions.  

Amid these years of crisis, and without access to external financial markets, Lebanon has tried to negotiate an International Monetary Fund (IMF) deal. A Staff-Level Agreement (SLA) was reached in 2022, but the failure to implement critical reforms required by the IMF—bank restructuring, debt restructuring, budgetary reforms, and banking audits—kept Lebanon frozen in economic paralysis. The indirect costs of the most recent war alone amounted to $8 billion, further deepening the country’s financial abyss. 

Then, suddenly, everything changed. 

A ceasefire was secured on November 27, 2024. A month and a half later, Lebanon elected a president—one unanimously (or widely) endorsed both locally and internationally. A great commander with a track record of leadership, Joseph Aoun entered office with historic momentum. Within a month, he appointed International Court of Justice (ICJ) judge Nawaf Salam as prime minister, swiftly forming a government widely seen as competent and reform-oriented. 

Enormous expectations now rest on this government to deliver economic, social, and banking reforms, restore Lebanon’s access to international financial markets, and rebuild trust with global partners. The new leadership must also address urgent challenges: securing funds for reconstruction, renegotiating an IMF program under terms that are beneficial for Lebanon’s long-term recovery, ensuring fair and transparent elections, and restoring economic stability, inducing accountability and a sense of rule of law. On the security front, this starts with the security and military appointments, while on the economic front, it starts with the appointment of a credible central bank governor and a clear monetary policy. 

 Lebanon cannot afford to pass reforms that merely satisfy external lenders while ignoring the pain they might inflict on the population.” 

At the core of these challenges is the need to reconcile reforms that earn the trust of the international community—particularly the IMF—without triggering social upheaval or eroding popular support. Lebanon cannot afford to pass reforms that merely satisfy external lenders while ignoring the pain they might inflict on the population.  

Beyond these immediate priorities, financing post-war reconstruction remains one of Lebanon’s most pressing challenges. Securing the estimated $6 billion necessary for rebuilding will require a mix of international aid, public-private partnerships, and innovative financial instruments. Strengthening Lebanese state institutions, particularly the armed forces, will also be key—not just for internal stability but as a necessary condition for securing a full Israeli withdrawal from occupied territories. Overcoming these obstacles will not only strengthen Lebanon’s political standing but could also create long-term stability, ultimately encouraging sustainable investments in the country’s future. 

Rebuilding Lebanon’s place on the map 

While the government is the executive arm, the president—elected with overwhelming local and international backing—will bear the greatest pressure in ensuring that Lebanon stays on course. Unlike the government, which may change, President Aoun is here for six years. Will those six years be any better than Lebanon’s past six years of crisis? Aoun’s ability to maintain momentum, rather than letting it fade, will determine the success of his tenure. 

One of his most significant challenges will be to restore Lebanon’s standing on the international stage—not as a fragile, crisis-ridden state seeking bailouts but as a country demanding equal treatment while safeguarding its sovereignty and financial security. Lebanon’s ability to attract investment, secure aid, and renegotiate its international agreements depends on proving it can function as a stable and trustworthy partner. 

 Lebanon must begin the long, arduous task of building enduring institutions—public entities that may be costly to establish today but, once entrenched, will be difficult to dismantle. "

But trust is not just about diplomacy; it starts at home. Lebanon must begin the long, arduous task of building enduring institutions—public entities that may be costly to establish today but, once entrenched, will be difficult to dismantle. This begins with the right choice of a central bank governor—not just a technical expert, but a true statesman, skilled, principled, and incorruptible. 

At the same time, Lebanon faces tough choices in restructuring its banking sector and addressing its Eurobond obligations. A key component of economic recovery will be modernizing and optimizing state-owned assets, which could involve corporatization, Build-Operate-Transfer (BOT) models, or other mechanisms that reduce excessive government control while improving efficiency. While such measures could unlock new revenue streams and improve service delivery, the challenge lies in striking the right balance between the state’s role and market efficiency, ensuring that reforms serve national interests without leading to unchecked privatization. 

Fiscal policy will also be a defining factor in shaping Lebanon’s economic trajectory. The country must develop an economic model that ensures equity and revenue generation without driving away investors and entrepreneurs. A tax structure that overburdens the private sector risks pushing businesses and capital out of Lebanon, while weak enforcement and inefficient spending will only deepen the country’s financial woes. Striking the right balance between encouraging investment and ensuring fair contributions from all economic actors will be critical in restoring economic confidence. 

Foundations for a sustainable future 

Lebanon’s recovery cannot be built on short-term fixes. It must secure a free, liberal economy that guarantees rights and freedoms while protecting its most vulnerable citizens. Public servants must rediscover their role as true servants of the people—not political extensions of a broken system. 

At the same time, national unity must be reinforced. The presidency and the new government represent a rare moment of consensus, and there is hope that all Lebanese will rally around the state, its institutions and its legitimate security forces. The Lebanese Army, in particular, must be supported to ensure it can fully safeguard national sovereignty and internal stability. A strong and independent army is essential not only for security but also for reinforcing Lebanon’s position as a sovereign state rather than a fragmented political battlefield. 

Lebanon is at a rare moment of hope. For the first time in years, there is a leadership team with the political chops to push through meaningful reforms. If the government can prioritize the most pressing issues, negotiate effectively with the IMF, and lay the groundwork for economic stability, Lebanon has a chance to move beyond crisis management and toward a path of recovery. 

The next few months will set the tone. The next six years will define the legacy. 

The views expressed in these articles are those of the author and do not reflect an official position of the Wilson Center.

This article was written by Tania F. Kallab prior to her recent appointment as advisor to the president for international economic cooperation. The views expressed in this article reflect her personal opinion and do not represent her official capacity or the position of the government.