On January 9, Lebanon’s parliament elected former army leader Joseph Aoun as president, securing 99 out of 128 votes in a second round of voting. This milestone ends the power vacuum since October 2022 and sets the stage for the formation of a fully empowered government to replace the current caretaker administration led by Prime Minister Najib Mikati.
President Aoun’s election, backed by the international donor community, highlights the Lebanese army’s pivotal role in upholding the 60-day ceasefire agreement between Hezbollah and Israel, signed on November 26, 2024. With the support of the United States and the United Nations Interim Force in Lebanon (UNIFIL), the return to fully functioning state institutions will bolster efforts to sustain peace and stability.
The restoration of effective governance also unlocks pathways to critical international financing for military support and economic reconstruction. At an international conference in Paris on October 24, 2024, donors pledged $1 billion (approximately 3.1% of GDP), including $800 million for humanitarian aid and $200 million for military assistance. The conference came as Lebanon faced significant challenges from the recent conflict, which displaced 1.3 million people and caused $8.5 billion in economic losses, including $3.4 billion in physical damages. Despite a 10% economic contraction in 2024, recovery is expected to commence this year, contingent on a lasting cessation of hostilities.
As in previous instances, international donor funds are likely to be linked to a new IMF program that requires the implementation of key reforms. These include comprehensive debt restructuring across government, central bank, and commercial sectors, essential for long-term economic recovery. Lebanon’s current trajectory offers hope for renewed stability and growth as it rebuilds with international support.
