Lebanon at a Crossroads: Urgent Reforms Needed to Rebuild After Devastating War

Lebanon at a Crossroads: UN Sounds the Alarm on Recovery Amid Devastation

Lebanon stands at a crucial turning point, the United Nations warns, amid a deepening crisis that’s been going on for six years—and made dramatically worse by the recent conflict between Israel and Hezbollah. The UN’s latest report, released this Thursday, paints a sobering picture of a country struggling to recover from compounded economic collapse, infrastructure destruction, and social upheaval.

The Human Cost: Lives Lost and Communities Displaced

The Israel-Hezbollah war, which reignited with full force on October 8, 2023, and escalated further in September 2024, has devastated Lebanon’s population. According to the UN, over 4,285 people—including 292 children and 861 women—have lost their lives as of January 9, with about 17,200 more wounded. Even after a cease-fire took effect on February 18, another 200 casualties have been reported, involving both civilians and Hezbollah operatives.

But these numbers only tell part of the story. Over 1.2 million people were forced to flee their homes due to the fighting, creating one of the largest displacement crises Lebanon has faced in decades. Nearly 64,000 buildings were damaged or destroyed, including homes, businesses, schools, and hospitals. This level of destruction has sent shockwaves through Lebanese society and infrastructure.

A Blow to Business: Economy in Freefall

Lebanon’s economy, already fragile before the conflict, took a massive hit. Small and medium-sized enterprises (SMEs), which make up roughly 90% of the country’s economic activity, were particularly hard hit. Here’s a quick rundown:

• 15% of SMEs shut down permanently.

• 75% suspended operations during the war.

• Nearly 30% lost their entire workforce.

In the worst-hit areas, up to 70% of businesses had to close their doors for good.

These closures don’t just affect owners—they ripple through communities, leaving workers jobless and families struggling to make ends meet.

Education and Child Nutrition: A Generation at Risk

The war also disrupted education on an unprecedented scale. Approximately 500,000 students faced severe interruptions in their schooling. Shockingly, before the cease-fire, nearly 69% of children were out of school. The social consequences are staggering—an entire generation of young people missing critical months, if not years, of learning.

Even more alarming are the child nutrition statistics. In regions like eastern Baalbek-Hermel and Bekaa, over 50% of children under two years old suffered severe food shortages during the conflict. These shortages threaten the long-term health and development of Lebanon’s youngest citizens.

Food Security: A Growing Nightmare

The report warns that 1.6 million people are expected to face acute food insecurity, including nearly a million Lebanese citizens. This is a direct outcome of disrupted supply chains, loss of income, and rising food prices. Food insecurity fuels instability and desperation, making the recovery challenge even more urgent.

Poverty and Unemployment: The Deepening Crisis

Poverty has skyrocketed in Lebanon over the past decade. Between 2012 and 2022, the percentage of Lebanese living below the poverty line tripled—from 11% to 33%. The 2024 war only deepened this divide, especially in eastern and southern Lebanon.

The labor market took a hard hit, too. Employment among private sector workers dropped 25% during the conflict. In heavily bombed areas, the job loss was even worse, with 36% of workers losing their jobs compared to 17% in less affected regions. And even after hostilities ceased, 14% remained unemployed.

Economic Collapse: Shrinking Economy, Lost Progress

Lebanon’s economy has contracted by a staggering 38% between 2019 and 2024, with the country’s Human Development Index sliding back to 2010 levels. That means Lebanon has lost about 14 years of social and economic progress in just a few short years.

Critical sectors like tourism, agriculture, manufacturing, trade, and finance have all suffered devastating losses. The tourism sector, once a vital source of revenue, saw its contribution shrink to just 5.5% of the economy in 2024.

The Path Forward: A Chance for Reform and Recovery

Blerta Aliko, the UN Development Program’s representative in Lebanon, stressed the urgency: “Lebanon is at a turning point.” She called on Lebanon to develop a “nationally led recovery plan” that’s reform-driven and inclusive.

According to the report, strong, well-equipped state institutions are vital to steer Lebanon through this crisis. Without them, any recovery effort risks falling apart. Aliko pointed out that only with committed reforms can Lebanon hope to reverse the economic freefall.

Here are some optimistic projections: with the right reforms, Lebanon’s GDP could grow by 8.2% in 2026 and 7.1% in 2027. However, even with this growth, GDP would remain 8.4% below its pre-crisis peak in 2017, when Lebanon’s economy was valued at $51.2 billion.

To sustain recovery, the report emphasizes that Lebanon must prioritize rebuilding key sectors like:

• Agriculture

• Construction

• Tourism

• Manufacturing

Revitalizing these areas is essential to create jobs, stimulate growth, and rebuild livelihoods.

Four Pillars of Recovery: What Lebanon Must Focus On

The UN report lays out four critical priorities for Lebanon’s recovery plan:

1. Rebuilding and strengthening state institutions — to ensure effective governance and public trust.

2. Revitalizing the economy and generating employment — by supporting businesses and entrepreneurship.

3. Restoring basic services and expanding social protections — so all citizens have access to healthcare, education, and social safety nets.

4. Rehabilitating damaged environmental ecosystems — to address the long-term impact of conflict on Lebanon’s natural resources.

The Urgency of Reform and Stability

Tarik Alami, who leads the UN’s economic and social governance cluster, called Lebanon’s current situation a “polycrisis”, where multiple crises overlap and worsen each other. He urged accelerated reform implementation, especially in public administration, socioeconomic, and financial sectors.

Alami stressed that addressing the root causes of recurring violence, particularly along Lebanon’s southern border, is crucial. He insisted these issues must be tackled “decisively and sustainably,” respecting international law and UN resolutions.

International Aid: A Conditional Lifeline

The UN report stresses that Lebanon’s recovery depends on urgent, coordinated action. That means collaboration between the Lebanese government, international donors, UN agencies, and NGOs. Substantial funding is critical—from domestic resources, private sector investment, development aid, and foreign direct investment.

But here’s the catch: without immediate intervention and necessary reforms, Lebanon risks prolonged economic pain, deeper poverty, weaker institutions, and social instability.

The World Bank’s March estimate suggested Lebanon needs $11 billion to rebuild after the war. Yet, international financial support remains on hold. Israel insists that Lebanon must disarm Hezbollah and enact reforms before any significant aid or peace is possible—a tough political hurdle in an already fragile situation.

Why This Matters to the World

Lebanon’s crisis is a stark reminder of how conflict can quickly unravel decades of progress. Its people face not just the aftermath of war but the heavy toll of poverty, lost education, and shattered hopes.

The report is a call to action—a chance for Lebanon and the international community to come together, support reforms, and invest in rebuilding a peaceful, prosperous future. Without bold steps now, the pain will only deepen, and Lebanon’s potential will remain out of reach for years to come.