When the Lights Go Out: Life, Inflation, and Lebanon’s Fragile Democratic Renewal
Once called the “Switzerland” of the Middle East, Lebanon now measures time not by hours, but by the few minutes of electricity that still flicker through its homes. Daily blackouts, soaring inflation, and a depreciated currency have redefined life for millions. Due to successive governments piling up debt following the 1975-1990 civil war, leading to the 2019 financial collapse, the government has struggled to provide consistent power, regulate markets, and deliver public services, leaving citizens to depend increasingly on remittances and local networks to survive. As formal institutions weaken, questions of legitimacy and governance are resurfacing- while it is citizens, not officials, shoulder the burden of keeping the country afloat.
The 1989 Taif Agreement, which ended Lebanon’s fifteen-year Civil war, established a power-sharing system among the country’s main religious communities — allocating the presidency to a Maronite Christian, the premiership to a Sunni Muslim, and the speakership of parliament to a Shia Muslim. Additionally, parliamentary seats would be equally divided among the Christians and Muslims to reflect Lebanon’s broader demographic. This consociational arrangement succeeded in granting equal political rights. Consequently, power became concentrated within communal leaderships, limiting cooperation and long-term policymaking. While the system prevented sectarian tensions, it left the state open to external pressures—from Iran and Syria’s regional interests to Western diplomatic and financial influence.
Following the war, Prime Minister Rafik Hariri launched the Horizon 2000 campaign to revive Lebanon’s economy, even as Solidere — the private company he founded to reconstruct downtown Beirut — drew criticism for privatization and displacement. The Lebanese pound was fixed to the U.S. dollar, foreign capital returned, and Beirut’s skyline was rebuilt as a symbol of national revival. For a time, the strategy appeared successful: the banking sector thrived, and tourism and real estate fueled optimism. Yet this growth depended heavily on foreign deposits, remittances, and borrowing to fund imports. As a result, the economy became increasingly exposed to external shocks, and debt levels rose sharply. When regional inflows slowed in the mid-2010s, the government lacked both fiscal space and reform capacity that would ultimately culminate in the 2019 financial crisis.
The turning point came in October 2019, when a proposed tax on online communication platforms, such as WhatsApp, triggered nationwide protests that quickly evolved into broader demands for accountability and financial reform. According to Amnesty International, the “WhatsApp tax” became “the straw that broke the camel’s back” after years of austerity, stalled reforms, and deteriorating living conditions. The demonstrations were built on long-standing grievances. In 2018, donors at the CEDRE Conference pledged $11 billion in aid–funds that, as Al Jazeera noted, were “conditional on structural reforms that the last Lebanese government never implemented.” By 2024, the state’s failure to manage wildfires, rising unemployment, and a heightened fiscal deficit eroded public confidence. For five months, protesters from across sectarian and political lines united under the slogan "كلّن يعني كلّن" (Arabic for “all of them means all of them”) —a rejection of the entire political class seen as complicit in decades of corruption and economic mismanagement. Within a few months, Lebanon’s financial system collapsed: banks restricted withdrawals, and the government defaulted on its Eurobond debt for the first time in history in March 2020. By 2022, the Lebanese pound had lost over 95 percent of its value. Decades of structural weaknesses and financial overexposure contributed to the country’s economic collapse.
The World Bank has classified Lebanon’s financial downturn as one of the most severe crises of the twenty-first century. Public institutions were unable to cushion the impact, and households faced extreme shortages in fuel, food, and medicine. In April 2022, under President Michel Aoun and Prime Minister Najib Mikati, Lebanon reached a staff-level agreement with the International Monetary Fund (IMF) aimed at stabilizing the currency and restoring confidence. However, the deal stalled after Parliament failed to pass the required reforms, leaving the economy adrift. The crisis exposed the system’s fragility, long sustained by external confidence rather than productive economic foundations.
As the government faltered, Hezbollah—A Shia party formed in the 1980s with Iranian support to resist Israeli occupation and empower Lebanon’s Shia population–expanded its role beyond politics into providing social and community services. The group distributed fuel, food, and medical aid, particularly in Shia-majority enclaves, and maintained steady resources when state institutions could not provide these public goods. This development created a paradox: an official state, internationally recognized but financially exhausted, alongside a parallel non-state actor delivering services along sectarian affiliation. While this dynamic raises complex questions for international engagement—how foreign donors can deliver aid or support governance without reinforcing sectarian networks or legitimizing non-state actors?—it also illustrates how local resilience has compensated for national paralysis. For many citizens, governance has become less about formal institutions and more about access to stability.
The human cost of Lebanon’s collapse is profound. According to the United Nations, more than 55 percent of the population now lives below the poverty line. Electricity is available for only a few hours per day, forcing families and businesses to rely on private generators. Salaries have depreciated to a fraction of their former value, and professionals continue to emigrate in search of employment stability. The strain is compounded by Lebanon hosting approximately 1.5 million Syrian refugees, which has placed immense pressure on infrastructure, healthcare, and education systems. Yet amid institutional decay, local NGOs and community initiatives persist in filling critical gaps. Despite institutional weakness, Lebanon’s vibrant civil society remains a vital democratic channel–one through which citizens continue to express dissent, demand accountability, and articulate frustration with the state.
Since 2025, Lebanon has taken tentative steps toward resolving its electricity and fiscal crises, though the reforms remain nascent and fragile. The administration formed in February 2025 under Prime Minister Nawaf Salam placed energy reform high on its agenda. In April, Lebanon signed a $250 million World Bank loan targeting structural upgrades in the power sector. This included offering improvements in billing systems, implementing a national control center, and spearheading a solar project designed to generate 150 MW and reduce fuel costs. The government also moved to appoint an independent electricity regulatory authority. However, Électricité du Liban still faces technical losses exceeding 50 percent and provides limited hours of daily power.
On the macro-economic front, the International Monetary Fund has noted that Lebanon is showing signs of resilience under new leadership, but stressed that deeper structural reforms remain essential. For instance, in April 2025, Parliament passed a banking secrecy law granting authorized judicial, financial, and oversight bodies—such as the Special Investigation Commission and the National Anti-Corruption Commission—access to banking records to strengthen transparency and accountability. More recently, a bank restructuring law was passed, setting the framework to reorganize defaulted banks — a critical condition for unlocking IMF support. Still, many fiscal commitments and trust-building measures remain stalled by political polarization and conflicting interests. 2025 has seen limited progress in electricity, banking, and regulation, contingent on political will and institutional support.
Lebanon’s path forward remains steep, but the direction is no longer entirely opaque. The energy sector is now a testing ground– if the $250 million World Bank loan is well-implemented, if the regulatory authority operates independently, and if solar and grid upgrades roll out, then the blackout era may slowly recede. Similarly, the newly passed banking and secrecy laws have shown Lebanon’s commitment to accepting accountability, promoting transparency, and oversight. Yet financial and institutional recovery cannot rest solely on symbolic legislation. Without consistent execution, monitoring, and alignment across ministries and political blocs, these reforms risk just becoming ideas. As the World Bank Group explained, “Given Lebanon’s state of insolvency and lack of sufficient foreign exchange reserves, international aid and private investment will be essential for comprehensive recovery and reconstruction. Lebanon’s implementation of a credible reform agenda will be key to accessing international development assistance and to unlocking external and private sector sources of financing.”
Lebanon’s path forward remains steep, but signs of improvement are emerging. The World Bank has emphasized that international aid and private investment will be vital to recovery—but such support must be matched by accountability and sustained reform. Under the new Salam administration, efforts to stabilize the power grid, enhance financial transparency, and strengthen oversight have begun to restore public confidence. A Gallup poll in September 2025 showed 56 percent approval for Prime Minister Nawaf Salam and a record-high 62 percent for the country’s leadership overall—a dramatic rise from previous years, suggesting renewed faith in governance.
Finally, a major task for Salam’s government will be to move Lebanon beyond years of economic paralysis by modernizing its public administration systems. As Beirut Today notes, the paralysis caused by entrenched power interests has left state institutions in “archaic conditions, burdening employees and citizens alike, slowing reforms, and derailing urgent interventions.” Restoring efficiency and transparency at the bureaucratic level will determine whether Lebanon’s fragile recovery can translate into lasting change—whether, at long last, the lights can truly stay on, and democracy can thrive again.