An international hands-on approach to Lebanon

The below article is part of the series "Seizing Lebanon's Moment," a joint initiative with the Italian Institute for International Political Studies (ISPI). The contributors to this series — who comprise top scholars, policymakers, and professionals from Lebanon, Europe, and the United States — set out to identify Lebanon's critical problems and propose specific reforms aimed at practitioners and officials dedicated to helping the country recover from its deep, multi-year crisis. The series has been compiled in a report, whose findings aim to carry forward the constructive policy dialogue initiated during this year's Mediterranean Dialogues Conference.
 

For years, the international community’s engagement with Lebanon has been frustrated by the lack of structural reforms. Conference after conference, loan after loan, calls for reform have been stonewalled by a corrupt political class and further compounded by Hizballah’s obstructionism. The country’s financial collapse beginning in 2019 and the 2020 Beirut port blast almost extinguished hopes for change. More recently, a destructive new round of war between Hizballah and Israel has devastated the south, the Beqaa Valley, and the southern suburbs of Beirut, pushing public infrastructure to the breaking point. Yet, a rare window of opportunity may be emerging. After years of political deadlock, Lebanon has a new president and government that appear more committed than their predecessors to implementing much-needed reforms, including the restructuring of the banking sector, the disarmament of militias, and the overhaul of the judicial system.

For a country marked by fragile institutions, political violence, and entrenched clientelism, the formation of a new, pro-reform government is certainly a positive development. Rather than a silver bullet, it should be regarded as an opportunity to nurture. To encourage and incentivize long-overdue structural reforms, the European Union and the broader international community should adopt a more proactive, hands-on approach to Lebanon. Particularly after the port blast, widespread mistrust in Lebanon’s political class has led many donors to nearly bypass the state, often opting to provide directly for the needs of the population. The current context calls, however, for an approach that balances assistance delivery with active support to the Lebanese government in its quest to reform and rebuild the state. While setting clear benchmarks for any new financial package, the EU and the rest of the international community should leverage their array of political, economic, and technical tools to support Lebanon in this transitional phase.

Good intentions, lasting dependencies

In the post-civil war era, particularly since the early 2000s, international assistance for Lebanon has largely meant one thing: donor conferences. In the span of the few years between Paris I (2001) and Paris III (2007), international donors pledged almost $13 billion in financial support for Lebanon.¹ But these promises often felt like more of a shot in the arm for Lebanon’s political class than actual support for its population. As loans were signed and grants allocated, the country’s financial stability proved short-lived, and the promised reforms failed to materialize. The gap between commitments and delivery became evident very early on. At Paris III, donors pushed for the creation of a steering committee chaired by the prime minister: the Government Reform Programme Coordination Office. This “control room” was established to direct the reform agenda, coordinate inter-ministerial relations, and submit semi-annual progress reports to donors. Yet, despite this framework, Paris III fell short. In some policy areas — like privatization — the conference’s objectives were simply unattainable within the set timeframe. More crucially, however, Lebanon’s government and parliament failed to deliver: reforms stalled due to institutional bottlenecks, and key decisions, even when taken, were never implemented.

A decade later, the 2018 Economic Conference for Development, through Reforms and with Business (CEDRE, in the French acronym) seemed to offer a more forward-looking model by tying financial assistance to reform benchmarks and favoring soft loans over grants. Since Paris III, the political and economic situation had deteriorated. Growth had collapsed, the debt-to-GDP ratio had stagnated at 150%, and a banking crisis loomed in the background — all while the country was confronting the impact of the Syrian refugee crisis. To tackle the issue of implementation and move forward with the reform agenda, donors introduced a new oversight mechanism: a coordination group of major international donors tasked with supporting the process. But this, too, yielded little result. By the time the group first convened to assess progress in May 2020, Hassan Diab’s government (2020-21) had already announced Lebanon’s default, leaving donors with no option but to scale back their pledges. Such implementation problems were often tied to the political rationale that underpinned the conferences. These initiatives frequently seemed more of a show of support for a particular government than an investment in Lebanon’s financial stability. Paris III was widely seen as an effort to bolster Prime Minister Fuad Siniora (2005-09) against Hizballah’s campaign of political assassinations and the institutional paralysis that wave of violence had produced. Likewise, CEDRE took place just a month before the long-delayed parliamentary elections of 2018 — an overlap that was largely perceived as a political gift to Prime Minister Saad Hariri (2009-11, 2016-20) and his government.

Part of the problem with how international actors have engaged with Lebanon was their strategy of prioritizing financial stability over the development of the productive sector. In the European case, this approach stemmed in part from the Association Agreement, signed in 2002 and in force since 2006, which partially liberalized trade between Lebanon and the EU. Even though Lebanese exports to the EU grew after the signing of the Agreement, the partial opening up of the economy to European imports coincided with a deterioration of the country’s balance of trade. Two main factors contributed to this outcome. First, more than a decade after the signing of the Association Agreement, Lebanese products still suffered from limited market access to the EU, mainly due to differences in trade standards and other administrative hurdles. Second, and more importantly, domestic structural weaknesses like the lack of an industrial policy prevented Lebanon from fully capitalizing on the agreement.

Lebanon’s default in early 2020 and the port blast in August of the same year signaled a watershed for international engagement with the country. Soon after the explosion, the EU, the United Nations, and the World Bank launched the Reform, Recovery and Reconstruction Framework (3RF), a people-centered initiative that combined financial support to communities and businesses with engagement with civil society. The decision to bypass the Lebanese state in the aftermath of the disaster was the culmination of a process that has been unfolding for years, if not decades. Particularly after the outbreak of the Syrian refugee crisis, UN agencies and international non-governmental organizations have almost replaced the state as service providers in several sectors. Reliance on international funding is particularly pronounced in the education and health sectors. This largely reflects the financial and political meltdown of the Lebanese state, as well as international shortcomings in addressing the needs of the country’s civil service. This pattern is not entirely new. Starting in 1992, the United Nations Development Program (UNDP) spearheaded an attempt to reform public administration by embedding teams of advisors in ministries and government institutions. Despite some initial success, this system soon turned into what many recount as an expansive parallel administration, still vulnerable to political encroachment. Thirty years later, the persistence of parallel bureaucracies and social service systems has contributed to hollowing out the state, further weakening its institutional capacity.

Charting a hands-on approach

After years of stagnation and political paralysis, things are finally starting to move. Over the past few months, key vacant positions in the state administration have been filled, and the government has taken some timid steps toward structural reform. While there is still criticism — particularly regarding the limits of the measures taken so far to reform the banking sector — the climate does seem to be changing. But time is a tyrant. Two timing challenges currently hinder effective international support. First, the new Lebanese government’s mandate is set to expire in May 2026. With parliamentary elections just around the corner, the incentive to defer critical decisions might simply be too tempting to resist. Second, international support is constrained by donor programming cycles. The EU, for instance, approved its last multiannual financial package for Lebanon in mid-2024. Despite the changes that have taken place since then, Brussels is unlikely to restructure a program that is only halfway through its allocation period and whose contracts have just started to be awarded. A new EU financial package — including the second allocation of the $1 billion promised in 2024 — will therefore have to wait until late 2026. Although discussions on future policy priorities should start now, the European Union and the international community can still provide meaningful support right away.

In the short term, international actors, and especially the EU, should support structured policy discussions between Lebanon’s state institutions and civil society organizations engaged in policy development. This would ensure bottom-up participation during a critical phase. To date, this engagement has been limited to a few initiatives, like the Lebanese Association for Democratic Elections’ EU-funded project on electoral reform. The 3RF also integrated policy workshops as one of its core components, but the 2023 report and our interviews with key stakeholders prove that not all policy areas were explored in the same way, depending also on the divergent priorities of the many international actors involved. On top of that, the 3RF never really managed to expand to the whole country, remaining largely a Beirut-centered initiative. In the current context, the EU Delegation in Lebanon could play a pivotal role, building also on the experience of the policy roundtables it organized between 2007 and 2009.² Besides involving experts, professional associations, and civil society, these discussions included members of parliament and technical figures affiliated with political parties. Today, the EU could use the same formula, making sure to engage stakeholders from the entire political spectrum. Such an approach could be instrumental in advancing a more technical, reform-oriented agenda in parliamentary debates. Expanding these conversations beyond economic issues to include areas such as education, administrative reform, and the justice sector would further enhance their impact.

In the medium term, strengthening Lebanon’s state capacity should be a central priority for international donors. The challenges are substantial: public sector salaries have eroded since the financial collapse, and many key administrative positions remain unfilled. So far, the international community has supported this reform agenda mainly through technical training and contributions to policy discussions. A notable example is the work of Support for Improvement in Governance and Management (SIGMA) — an initiative run by the EU and the Organization for Economic Cooperation and Development (OECD) that supports countries in strengthening their governance mechanisms and public administrations — which has collaborated with the Civil Service Board to draft a proposal to gradually realign public sector salaries.

Another priority in the short to medium term should be strengthening Lebanon’s statistical capacity. In a country where reliable data is scarce, building this capacity and ensuring public access to information is essential for effective policy discussions. The Central Administration of Statistics (CAS), however, suffers from chronic financial and human resource constraints. While the idea of holding a new census remains politically sensitive due to Lebanon’s confessional power-sharing system — the last one was held in 1932 — there is a pressing need to expand the state’s ability to collect credible economic and social data. In the short term, CAS could be reinforced through technical assistance and targeted training. The EU should draw on existing instruments such as MEDSTAT, its regional statistical cooperation program for the Southern Neighborhood. Since its launch in 1997, this initiative has promoted statistical harmonization and capacity building across the Mediterranean. The program’s next phase, expected in 2026, should allocate more resources tailored to the needs of individual partner countries, especially Lebanon.

International donors should also consider supporting a new National Survey of Household and Living Conditions, building on the effort undertaken by Lebanon’s Ministry of Social Affairs and UNDP between 1995 and 2004. An updated survey that captures the social consequences of the financial collapse and the recent war would provide a crucial evidence base for future policy development. Similar initiatives on labor data have been conducted in recent years by CAS in partnership with the International Labor Organization. A comprehensive national survey would be fundamental to reform Lebanon’s weakened social protection system, particularly in light of some complex reform initiatives like the retirement scheme approved in 2023. Another strategy to foster administrative capacity in the mid to long term would be to accelerate the country’s digitization process. So far, UNDP has worked with the Minister of State for Administrative Reform (OMSAR) in implementing the Lebanon Digital Transformation Strategy 2020-30, whereas the EU has directed its support to the private sector through the Lebanon Innovate Program. While several initiatives have been launched so far, the implementation of these e-governance strategies will require substantial technical and financial support.

The international community must adopt a genuinely comprehensive approach to Lebanon’s security sector. Since the financial collapse, support from the United States and the EU has largely concentrated on stabilizing the Lebanese Armed Forces (LAF), also employing direct cash assistance. The EU, through the European Peace Facility, has provided some €80 million in supplies and equipment, €60 million of which supported the LAF’s redeployment south of the Litani River. Yet, as pressure mounts on the LAF to disarm Palestinian armed groups and Hizballah, the habit of tasking the army with responsibilities far beyond its military role — such as criminal investigations and other policing duties — risks dangerous overstretch. Stepping up financial and technical assistance for the General Security and the Internal Security Forces (ISF) is crucial to easing this burden. Recent efforts have begun moving in this direction: the 2024 package allocated more than €30 million to the ISF, while the Technical Assistance and Information Exchange (TAIEX) — the EU’s capacity-building instrument — has recently launched technical programs. These initiatives should be expanded to improve the ISF’s recruitment and training system, fostering a force able to overcome its current legitimacy deficit and earn trust across Lebanon’s diverse society. At the same time, donor coordination should improve. Only a coherent, sector-wide approach can ensure that Lebanon’s security institutions remain resilient and capable in the face of growing challenges. These measures will not necessarily solve the political conundrum the Lebanese government and the LAF currently face when dealing with the Hizballah file. Yet, they probably represent the only path to support the Lebanese state in the quest to reassert its sovereignty.

Given the challenges of the country’s reconstruction, renewing and strengthening key oversight institutions to avoid past mismanagement should be another priority. The recent renewal of the Council for Development and Reconstruction’s board — an agency established in 1977 to lead recovery efforts but long subject to political interference — marked a positive yet insufficient step in this direction. Much more is needed. The three-year-old Public Procurement Authority currently operates with only one of its five mandated board members and lacks the necessary funding to hire essential staff. Strengthening it should be a priority of the new Lebanese government and the international community, especially in anticipation of a new donor conference.

Finally, amid calls for a new donor conference, the international community must openly acknowledge and confront the shortcomings of past efforts. Donor conferences should not be seen as international endorsements of any given government, but rather as instruments tied to measurable results in the reform agenda. Given Lebanon’s record of approving but failing to implement reforms, future conferences should prioritize implementation and oversight. This calls for a double strategy. On the one hand, international donors should learn from the experience of Paris III and CEDRE by setting clear and achievable reform benchmarks and devising a coordination mechanism that provides for their regular participation in the process. On the other hand, donors should work to strengthen Lebanon’s own oversight mechanisms, particularly in light of the high stakes of the reconstruction process. One option worth considering in such a framework is budget support for specific agencies like the Public Procurement Authority, which so far has been struggling to uphold its mandate due to budget shortfalls. These measures would enshrine accountability as a key pillar of the reconstruction process, making sure that international funding is used effectively, and crucially, safeguarded against a predatory elite.

The time to act is now

Lebanon’s window of opportunity is fleeting and should be seized before it closes. A “hands-on” approach is the international community’s only viable path to support the quest for strengthening and rehabilitating the Lebanese state. Only this crucial work can lay the foundation for the country’s political, economic, and physical reconstruction. Deferring critical decisions to future funding cycles or according to the timeline for the 2026 elections entails the risk of losing the only chance for reform Lebanon might have in a long time.