After nearly 2 decades of civil conflict, Lebanon entered the 21tst century on a positive note. Most of the country's infrastructure has been restored, and despite occasional violence, Lebanon's political system has been fairly stable. The 1989 Ta'if Accords, which brought an end to the civil war and set the terms for power-sharing among the various religious groups, has thus far been successful in creating a functional government in Beirut that is increasingly spreading its control over the rest of the country. Parliamentary elections have been held periodically since 1992. After almost 2 decades of occupation, Israel withdrew its military forces from southern Lebanon in May 2000.
Despite these positive developments, the government is faced with serious challenges, mainly lowering the budget deficit by focusing on tax reform and modernization, expenditure rationalizing, and reducing of the burden of servicing its debt. The government is also under pressure from the IMF to proceed with plans to adopt a privatization program of state-owned enterprises. Having lost its status as a regional banking and trade center and lacking a solid agricultural and industrial base, Lebanon must develop alternative plans to define its new role in the Middle East region. So far, beyond rhetorical official statements, no steps have been taken in that direction.