It is evident that the international community has placed the Lebanese government before the challenge of proving its ability to assert state authority and implement fundamental reforms. These conditions are essential for securing any financial support to help Lebanon navigate through its financial crisis, foster economic recovery, and rebuild what was destroyed by the recent war.

But what are the chances of success for Prime Minister Nawaf Salam’s government in meeting this challenge? And what are the economic consequences of its failure?

Predicting political events with precision is difficult due to the multitude of ever-changing factors influencing their course. Various methodologies are typically used for forecasting, including regression models, machine learning, expert surveys, historical event analysis, and game theory—each with its own advantages and drawbacks. For the purpose of this article, we will adopt a logical analysis of available data to outline future developments within a general framework. We will also apply two methodologies—deterministic analysis and machine learning (ML)—to estimate the likelihood of the government’s success or failure.

Challenges Facing the Government

There is no doubt that Lebanon’s fragile sectarian system and political power-sharing have fueled corruption and eroded good governance by weakening the enforcement of laws and entrenching the "6-6 bis" principle. Poor governance in public administration has been further exacerbated by the political protection of violators, resulting in a financial, economic, and social collapse that peaked in 2020 and 2021.

The challenges facing the government are multiple, ranging from administrative appointments to economic recovery, all addressing the required reforms. The sectarian power-sharing system is likely to be the biggest obstacle to the swift action needed to tackle those pressing challenges and take advantage of the current window of opportunity for Lebanon. Historically, political obstruction has been the primary roadblock to reform, with deadlock becoming a strategic tool wielded by political factions in almost every major issue.

For instance, some parties proposed amendments to the electoral law as a new point of contention that could paralyze government operations, particularly given the deep political divide following the recent war. This raises key questions: Will this deadlock persist, or will it subside under international and domestic pressure? Will political resistance to change curb the momentum of Salam’s government, which has less than a year to prove itself?

Another pressing challenge is the implementation of the ceasefire agreement, which faces practical obstacles on the ground. This is further complicated by a recent escalation in Israeli attacks, as well as ongoing military developments in Syria, both on the coastal front and in the south.

Of course, one of the biggest hurdles remains Lebanon’s economic and financial crisis, which directly affects living conditions, healthcare, and education. The government must navigate numerous obstacles, including reconstruction, banking sector restructuring, public debt management, public sector reform, and investment stimulation, all while contending with security concerns and the independence of the judiciary.

Illustration 1: Simulation of the likelihood of the government's success in three key files (Source: Our calculations).

Probability of Implementing the Ceasefire

More than 90 days after the ceasefire agreement was signed, tensions remain high undercover. This is obvious in Israel’s recent attacks and Prime Minister Benjamin Netanyahu’s declaration of readiness to open seven fronts simultaneously. Several factors influence the stability of the ceasefire, including U.S. and European pressure, Hezbollah’s strategic positioning, Iran’s role, and public opposition to continued conflict.

Simulations using two different methodologies indicate that the probability of Nawaf Salam’s government successfully implementing the ceasefire agreement ranges between 50% and 70%, with an average of 60% (see Chart 1). The analysis assigned weights and probabilities to a deterministic model and incorporated historical data into the machine learning model. A comparison between the two methods reveals a significant degree of alignment (see Chart 2).

Illustration 2: Comparison between the deterministic model and the Machine Learning model (Source: Our calculations).

Probability of Establishing Judicial Independence

Analyses suggest that political resistance will be the main barrier to establishing judicial independence. Control over the judiciary, even partially, allows political factions to halt or slow down legal proceedings and accountability measures. However, this is not the only factor at play. Public pressure—driven by demands for justice in the Beirut Port explosion case and the return of depositors’ funds—also holds substantial weight in the equation. Additionally, international actors may impose sanctions on those obstructing judicial reforms.

Taking all these elements into account, the probability of the government (and the parliament, which includes various political factions) successfully implementing judicial independence is estimated between 30% and 50%, with an average likelihood of 40%. This suggests that any judicial independence achieved would likely be partial or incomplete, potentially triggering significant domestic and international reactions.

Probability of Economic Recovery

Some political observers argue that economic recovery is inevitable if the government successfully implements the ceasefire and judicial independence. Some go further, claiming that the United States did not construct such a large embassy in Lebanon merely for it to serve as a museum—implying that change, including economic reforms, is inevitable.

Our simulation factored in various elements that influence economic reforms, including the ceasefire implementation, judicial independence, an agreement with the International Monetary Fund (IMF), institutional reforms, and capital control legislation. The findings indicate that the probability of the government achieving economic recovery ranges between 51% and 62%, with an average of 56.5%. This figure closely aligns with the machine learning model’s estimate of 56.8% (see Chart 2).

These probabilities suggest that economic recovery is likely to be either slow or incomplete, which could result in the international community imposing its own reform agenda on Lebanon.

Consequences of Failure

Failure to achieve these objectives will come at a steep cost, particularly on the social front. Lebanon could face widespread social unrest, a massive exodus of young professionals—including recent graduates and doctors—a further collapse of the healthcare sector (where over 70% of the population is already uninsured), additional financial and economic turmoil, international sanctions targeting Lebanese figures, a resurgence of political party dominance, and an overall deepening of state institutional collapse.

Given these stakes, it is logical to conclude that Lebanon must implement the ceasefire agreement, establish judicial independence to dismantle entrenched cartels, introduce comprehensive reforms, and reach a deal with the IMF in order to attract investment and drive economic recovery. Without these measures, Lebanon is on a trajectory toward becoming a failed state, with economic losses exceeding hundreds of billions of dollars and severe social consequences that will irreversibly reshape the country’s societal structure.