Lebanon Faces Reconstruction Challenge Amid Deep Financial Crisis

 

Lebanon is facing a massive challenge in the rebuilding of its war-ravaged landscape. The country remains in the middle of a deep financial crisis that worsened in 2019, the result of decades of corruption, mismanagement and poor leadership. In 2020, Lebanon defaulted on its debt and since then, its currency has lost over 90% of its value. Many people can no longer afford basic goods, and public services are collapsing.

After 14 months of war with Israel, an estimated 4,000 people are dead and it has damaged or destroyed approximately 10% of homes nationwide. The already failing public services have come under further strain, particularly in southern Lebanon, the eastern region, and Beirut’s southern suburbs—areas heavily targeted during Israeli bombardments and known for their strong Hezbollah support.

A new report from the World Bank—the Lebanon Rapid Damage and Needs Assessment (RDNA) 2025 estimates that the country needs around $11 billion to rebuild. Of this, $1 billion is earmarked for infrastructure covering energy, municipal and public services, transport, water, wastewater, and irrigation. An additional $6 to $8 billion is needed to restore the housing, commerce, industry, and tourism sectors.

President Joseph Aoun and Prime Minister Nawaf Salam, part of a new government formed in February, have pledged to tackle the entrenched corruption and governance failures that led Lebanon into its ongoing economic crisis, one the World Bank ranks among the worst globally since the 1850s.

Finance Minister Yassine Jaber, who has been leading talks with the International Monetary Fund (IMF) and World Bank, says Lebanon has announced preliminary approval to increase the World Bank loan for reconstruction from $250 million to $400 million. It would include long-term loans with repayment periods of up to 50 years. He laid out a $1 billion aid package including:

• $250 million for the electricity sector
• $256 million for water infrastructure
• $200 million for agriculture
• $200 million for social services

“We are not undertaking these reforms to satisfy the IMF or anyone else. We are doing them because we need them,” Jaber emphasized during a reception at the Lebanese Embassy in Washington.

But this $1 billion package would only cover a small part of the total cost. Lebanon needs help from foreign donors. So far, aid has been slow. Many international donors are also focused on other regional crises in Syria and Gaza. Some, like the United States, are demanding that Hezbollah—the powerful political and military group in Lebanon—lay down its arms before offering support.

During the war, Hezbollah took heavy losses and saw its influence weaken. Still, it remains popular among many Lebanese, especially in the hardest-hit areas in the south, east, and southern Beirut where people now look to the group for rebuilding efforts.

Lebanon’s recovery depends on two things: whether its leaders can make real changes at home and whether the world is willing to help. Without both, the country risks falling even deeper into crisis.