In January 2025, President Joseph Aoun took the oath of office and in his inaugural address declared the start of a “new era.” The government then began to reconstitute itself as a functioning center of authority after prolonged executive paralysis. This transition unfolded in a moment of political fluidity shaped by two facts: the severe debilitation of Hezbollah following the 2023-2024 war with Israel, and the general consensus that Lebanon must end its endemic patronage, corruption, and institutional dysfunction. The extensive damage and disruption caused by Israel’s military campaign has turned reconstruction into the defining test of whether the state can restore national trust by reasserting its authority and delivering recovery.

In February 2025, Prime Minister Nawaf Salam formed a new government, a step that further restored a degree of executive coherence. It created an opportunity to revive the basic functions of a state long undermined by corruption, inefficiency, and public distrust. Together, the presidency and the cabinet articulated a promising agenda centered on sovereignty, reform, and institutional revival.

Constraints on delivering that agenda have since become starkly apparent. Aoun and Salam inherited a state deeply hollowed out by economic collapse, burdened by vast reconstruction needs, hampered by entrenched political interests, and dominated by the question of how to resolve the issue of arms held by the Shia militant group Hezbollah, which challenges the state’s claim on the monopoly of violence. Prolonged financial breakdown has weakened the government’s capacity to regulate the banking sector, to deliver effective social protection to vulnerable communities, and to regularize Lebanon’s largely informal, cash-based economic system. At the same time, large-scale displacement from conflict-affected areas around Lebanon has risked compounding social strain and further exposing the limits of state capacity.

The Salam government has made meaningful progress over the last year, but it faces persistent structural limitations. Lebanon may well be better off today than it was a year ago, but it remains far from recovery. The most difficult issues—disarmament, economic revival, and reconstruction—are largely still unresolved, even as parliamentary elections approach and public patience wears thin.

Sovereignty as a Governing Principle

Since taking office, Aoun has framed sovereignty as the foundation of national recovery. There is now growing consensus that the consequences of weapons held outside state control have been unsustainable in political, economic, and security terms. Hezbollah’s diminished capabilities after its war with Israel seem to have created a new moment in which disarmament might successfully be pursued. Aoun’s presidency sees re-establishing national sovereignty as a prerequisite for rebuilding confidence at home and with Lebanon’s partners abroad. Indeed, Aoun may recognize that nothing less than Hezbollah’s complete disarmament will satisfy Israel and the United States and unlock reconstruction funds.

Salam’s government has placed the issue of disarmament explicitly within a state-building framework. It tasked the Lebanese Armed Forces (LAF) with developing a plan to reassert state authority initially south of the Litani River—located some 30 kilometers of the Israel-Lebanon border—in line with Lebanon’s obligations under United Nations Security Council Resolution 1701 and the November 2024 ceasefire. To date, this plan has involved several phased proposals, including the so-called Barrack roadmap that prioritized redeploying and expanding the LAF presence in sensitive border areas, dismantling or surrendering weapons caches, and coordinating operations more closely with the United Nations Interim Force in Lebanon (UNIFIL) for monitoring and verification purposes. The emphasis on a south-first approach reflects both international expectations and domestic constraints, as Lebanese officials argue that sequencing is necessary to preserve internal stability and to avoid escalation. At the same time, parallel proposals discussed with international partners have included confidence-building measures, such as reinforced border monitoring mechanisms, expanded international support for the LAF, and linkages between further consolidation of arms and sustained de-escalation, including Israeli withdrawal from occupied positions inside Lebanon. Together, these efforts signaled a shift toward an operational agenda, even as disarmament south of the Litani highlights the difficulty of repeating the exercise across the rest of the country.

Progress toward disarmament has been uneven, shaped by disputes over sequencing, the ever-present risk of escalation, and deep mistrust from a marginalized Shia community—Hezbollah’s primary constituency—that has borne the brunt of displacement, destruction, and social dislocation during the recent war with Israel. Hezbollah argues that disarmament must only come after Israeli withdrawal from the occupied areas and an end to its near-daily air strikes on Hezbollah positions and personnel. But this argument creates a circular logic that only delays the core requirement of disarmament. In December 2025, Salam stated that the first phase in the south was nearing completion, but that subsequent phases would be politically sensitive and hence more difficult to complete. The government’s incremental approach, which has emphasized deployment, weapons interdiction, and negotiated handovers, may have helped preserve internal calm. Yet it also runs the risk of becoming an end in itself if it is not followed quickly by a more credible framework for national disarmament.

Managing the Southern Front

The Israel-Lebanon border has been the most immediate test of the Salam government’s sovereignty agenda. The 2024 ceasefire reduced the intensity of open conflict but did not resolve the underlying strategic contest. Indeed, Israel’s decision to occupy five positions inside Lebanese territory after the withdrawal deadline remains a major point of contention.

Aoun has consistently signaled Lebanon’s preference for diplomatic avenues, such as the ceasefire mechanism and coordination with international mediators and UNIFIL, to secure withdrawals and prevent renewed escalation. Although this posture helps contain the risk of escalation, it underscores Lebanon’s limited room for maneuver. Any miscalculation along the border risks reigniting conflict in an environment where deterrence is fragile and spoilers are many.

The government’s strategy has been to pursue three objectives simultaneously: enforcing state authority in the south, reassuring international partners that Lebanon is meeting its obligations, and avoiding internal rupture by ensuring that sovereignty measures do not devolve into a domestic confrontation. This balancing act may have prevented instability, but it has not resolved the underlying issue: As long as border tensions are unresolved and weapons are held outside state control north of the Litani, the risk of renewed violence remains.

Economic Reform: Limited Traction?

If sovereignty is the political foundation of recovery, economic reform is its enabling condition. The government’s first year has produced some tangible results, albeit so far without reviving economic confidence. Salam’s cabinet entered office with a stated commitment to financial reform and renewed engagement with international partners, a shift welcomed by donor institutions. One of its most significant accomplishments was parliament’s passage of a revised banking secrecy law in April 2025, aligning Lebanon more closely with International Monetary Fund requirements and with long-standing demands for transparency. In light of Lebanon’s placement on the Financial Action Task Force (FATF) grey list in late 2024, the banking secrecy law was a prerequisite for financial reintegration into the world economy.

The government has also facilitated modest advances in social protection and administrative modernization, such as the implementation of a National Social Safety Net (AMAN) and the launching of a 2026–2030 social strategy, including international financing, to support marginalized populations and to digitize public services such as the National Social Security Fund. The World Bank recently approved additional funding for social safety nets and digital transformation, taking into account the need to prevent further social fracture. Yet although such initiatives are no doubt important for state credibility, they are hardly a substitute for macroeconomic stabilization.

Lebanon’s banking and deposit crisis remains the core obstacle to economic recovery. Since the 2019 financial collapse, banks have imposed capital controls, effectively freezing deposits and shifting losses onto ordinary citizens while eschewing restructuring. The absence of a comprehensive, legally grounded plan to allocate losses, recapitalize the banking sector, and protect smaller depositors has undermined trust in the financial system, deterred investment, and left the economy operating largely in cash, with grave consequences for growth and governance. The government has taken steps toward drafting loss recovery mechanisms and, in late 2025, unveiled a preliminary draft law to address deposits. But implementation remains politically fraught due to the absence of consensus among stakeholders on how to move forward.

Reconstruction: Lebanon’s Biggest Test

Reconstruction is perhaps the most visible measure by which the Lebanese people will judge the state’s effectiveness, but it is also the area in which progress has been slowest. The World Bank estimated Lebanon’s post-conflict recovery and reconstruction needs at approximately $11 billion, with housing among the hardest-hit sectors. While some international financing began to materialize, including a $250 million World Bank project to support recovery in conflict-affected areas approved in mid-2025, the scale remains far below what is required.

Reconstruction is constrained by financing gaps, but also by continued insecurity and persistent administrative weakness, especially amid fear of renewed escalation with Israel. These uncertainties have stalled the translation of international pledges into visible recovery on the ground and have reinforced the public’s skepticism that the state can deliver its promises.

The politics of reconstruction further complicate the picture. Historically, large-scale rebuilding in Lebanon has been vulnerable to capture by patronage networks, including by Hezbollah and its affiliated institutions, especially in areas like the south where state authority is weak.

This concern has resurfaced in the 2026 state budget. For example, the inclusion of reconstruction-related line items, which are channeled through such bodies as the Council for Development and Reconstruction (an institution long associated with the politically mediated allocation of funds), has revived debates over transparency, accountability, and preventing aid diversion. While such institutions played a role in rebuilding after past conflicts, relying on them today raises questions about replicating patterns that have previously eroded state authority.

This point is where security and economic issues converge: Without a credible state monopoly on arms and sustained border stability, donors remain reluctant to commit large-scale funding, which means that reconstruction proceeds in fragmented or informal ways. Conversely, without visible reconstruction and economic recovery, public faith in the state erodes, which creates space for non-state actors to reassert influence through service provision and localized rebuilding.

Parliamentary Elections Ahead

With parliamentary elections scheduled for May 2026, Lebanon’s political incentive structure is tightening. Elections could reinforce the momentum for reform, but they also could create incentives for obstruction, delay, and populism, particularly when reforms threaten entrenched interests. Again, the stakes are high, because this election’s outcome will determine whether the balance of parliamentary power will shift away from blocs aligned with Hezbollah and its allies, who have repeatedly used parliamentary leverage to dilute, delay, and veto progress on sovereignty, accountability, and disarmament, or whether those blocs will retain sufficient influence to constrain executive action.

The coming months therefore will test whether the Aoun-Salam leadership can remain coherent under electoral pressure and bolster its executive power with a durable parliamentary coalition. The sovereignty agenda, in particular, will need to function as a national framework capable of reshaping parliamentary dynamics away from Hezbollah-aligned forces so that progress on disarmament, reconstruction, and economic reform becomes uncontested and irreversible, and independent of political factionalism.

Conclusion: A Year-One Assessment

Today, Lebanon may be better positioned than in years past, but it is still far from recovery. The country has regained some executive coherence and a clearer governing logic centered around sovereignty and reform. The government has taken important steps to reassert state authority, to manage the fragile southern border, and to signal its seriousness on reform, while reengaging international partners. But limitations persist. Disarmament has advanced only where it is least contested, while the most difficult phases remain ahead. Border stability remains incomplete and reconstruction has barely begun at the scale required to alter conditions on the ground. Economic confidence has not been restored, and the financial crisis continues to cast a shadow over reform efforts.

A good start has restored the idea of state sovereignty and has reopened pathways for reform. Now, full disarmament, pursued carefully and with national legitimacy, must remain the priority as the gateway to everything else. Without it, durable peace, meaningful reconstruction, and economic recovery will remain elusive.