For years, the country has failed to enact financial and governance overhauls required by lenders. The recent fighting has made that problem urgent.
Reporting from Beirut, Lebanon
On his first day in office, Lebanon’s new finance minister, Yassine Jaber, sat at his desk reading a color-coded report on the dire state of the ministry’s operations. Nearly everything was marked in alarming red.
The computers were decades old — some still ran on Windows 98. Like much of the government, the ministry relied on mountains of paper records, allowing dysfunction and corruption to fester.
“Things cannot continue as they are,” he sighed.
To fix how it’s run, Lebanon needs money. But to attract money, it needs to fix how it’s run: For years, it has failed to enact sweeping financial and governance overhauls required to unlock billions in international financial assistance that it has needed to address a debilitating economic crisis.
Now, that support is even more critical after the devastating 14-month war between Israel and Hezbollah, the Iran-backed militia that has long held political sway in this tiny Mediterranean country. A fragile truce is holding, but large parts of Lebanon are in ruins. Hezbollah has been left battered and cannot pay for reconstruction. Lebanon’s new government is able to afford “frankly none” of the bill, Mr. Jaber said.
Foreign donors hold the key to Lebanon’s recovery, but to meet their demands, the state must do what it has never done before: Undertake painful economic and structural changes, while confronting the thorny issue of Hezbollah’s arms.
“The foreign aid is not just charity,” said Paul Salem, the vice president for international engagement at the Middle East Institute in Washington. “They are not going to give billions and billions of dollars unless their position is respected.”
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