Wassim, Nathalie, and Imad; three individuals who were pushed out of work by the deteriorating economic conditions in Lebanon. Tens of thousands of people like them have been suffering daily for the past 3 years living from paycheck to paycheck up until they were forced out of it (work). Lebanon has witnessed what no other country has. Unemployment rates doubled in only a decade, COVID-19 took out thousands, and inflation bankrupted hundreds of businesses.
According to Okun, a very low or negative growth in GDP leads to a rise in unemployment. By observing this visual, we can see how unemployment skyrocketed while GDP growth took a deep dive. Comparing the years 2008 and 2009, GDP growth increased 10.23 percentage points while unemployment rates decreased by 6.35 percentage points. We can conclude an inverse correlation between GDP growth and unemployment. Another observation is that between years 2020 and 2021, GDP growth increased by almost 15 percentage points. Despite this growth, unemployment remains significantly high at 14.49 percentage points. Importantly, this project is action-oriented in that it shows the nexus between unemployment and GDP growth #SDG8, which are intrinsic to an economy, from more “policy-driven” factors that can be addressed, improved or mitigated.
Here, a question rises? What is the cause for the disproportionality between GDP growth and unemployment rates? There are 3 possible causes for its inverse relation:
• The decrease of Foreign Direct Investment (FDI) which reached 3.98 percentage points in 2019 due to the lack of security and political tension
• Another possible cause is the low diversification in economic sectors due to scarcity of resources. Looking at this visual, we can see the focus of employment shift mainly to the service industry which witnessed an increase by 65.10 percentage points while the agricultural and industrial sectors are left behind increasing by under 30 percentage points in 2019.
• The third and final possible cause is the over-dependence on food and fuel imports. Lebanon possesses the second highest food and energy imports in 2019.
What should be done?
Drawing upon decades of empirical literature on drivers and predictors of lack of growth, this project proves Okun’s law using visualizations for the case of Lebanon. According to International Labor Organization (ILO), not just growth, but quality of growth is the key anchor in the SDGs 2030 agenda. Sustainable economic growth will require societies to create the conditions that allow people to have quality jobs that stimulate the economy while not harming the environment.
1. Creating greater opportunities for women and men to secure decent employment and income. Closing the employment gap is at the heart of the decent work agenda, this can be through promoting voluntary private initiatives and corporate social responsibility.
2. Instating policies to enhance knowledge, skills and employability for men and women since gender remains a source of labor market inequalities and inadequately utilized human resources. Women continue to be employed in a narrower range of occupations than men and to be concentrated in lower-paid, insecure, and unprotected jobs.
3. Promoting employment through reconstruction and employment-intensive investment.
4. Increasing access to financial services to manage incomes, accumulate assets and make productive investments.
Findings and Recommendations
A shift in economic thinking and planning towards economic structural transformation is necessary for the Arab region to develop on SDG 8 (ESCWA, 2021). The post-pandemic SDG agenda must leverage the lessons learnt to reinforce national social safety nets and employment policies. This strengthens economic resilience and allows developing countries to absorb shocks. A continued lack of decent job opportunities, insufficient investments, and under-consumption slows down economic growth. The average growth rate GDP is increasing after the pandemic; however, it still did not reach pre-pandemic levels of growth and developing countries such as Lebanon are moving farther from the 7% growth rate set for 2030. Therefore, as labor productivity decreases driven by low productivity and unemployment rate rises, standards of living decreases and overall economic growth decreases.
Governments must join forces and formulate policies to promote better job opportunities through active labor market programs, corresponding to important SDGs: Economic Growth and Decent Work, as well as Partnerships to Achieve the Goals.
Sustainable economic growth will require societies to create the conditions that allow people to have quality jobs that stimulate the economy while not harming the environment. Job opportunities and decent working conditions are also required for the whole working age population. There needs to be increased access to financial services to manage incomes, accumulate assets and make productive investments. Increased commitments to trade, banking and agriculture infrastructure will also help increase productivity and reduce unemployment levels in the world’s most vulnerable regions.#SDG8 #SDG16
Authors: Tala Abdul Samad, Nour Al Bidewe, Basman Hariri, Sara Sadaka, Aziz Saliby, Jean-Pierre Sakr
Over the past two years, Lebanon has been witnessing compounded crises such as brain drain, poverty, unemployment, and inequality. On October 3rd, we wanted to listen to the factors that affected the Lebanese the most. Borhan, a 60-year-old man living in Beirut, was one of the people we met. We captured a video with him to show the suffering of the Lebanese since the start of the crisis where he comprehensively described the severe living conditions. As we all know, 2019 was a year of transformation for Lebanon, beginning with the October 17th revolution in 2019, following the global pandemic in 2020, and the rise of inflation. Borhan expressed the feelings of most Lebanese, where he identified the problems that we are facing as residents. Many people mentioned that specific sectors have been hit the most, therefore we would like to perform exploratory data analysis and surveys using different datasets to be able to identify inequalities. We are also interested in using a data-driven approach to identify gaps and inequalities that exist in the education, income, and health sectors.
As a result, we have exploited the World Bank’s World Development Indicatorsand we have identified several indicators which we have used as proxies to measure multidimensional poverty in Lebanon. We chose to have a topic related to the multidimensional poverty index in Lebanon compared to the Arab region. Since the multidimensional poverty index is calculated using three different dimensions, namely education, living conditions, and health, we decided to divide the three different dimensions among us.
Living Conditions:
Housing is a significant indicator of the multidimensional poverty (MDP), and based on ESCWA calculations, the main indicators to assume whether housing is counted as depreciation for a household or not are ‘Overcrowding rate’ – the percentage of the population living in an overcrowded household – ‘Housing type’ i.e. houses, apartments, row houses, townhouses and duplexes, ‘Sanitation quality’ – availability of handwashing facilities, toilet cleanliness.
Historical data related to housing utilities in Lebanon was gathered from theCentral Administration of Statistics (CAS), which contains significant indicators to measure MDP such as water, electricity, gas, actual rent, furnishings, household equipment and routine household, and others. Data is shown monthly from December 2007 till September 2022.
This data reported many indicators highlighting the increase in poverty on multiple sides. It is worth reporting that the consumer price index (CPI) Housing Utilities in Lebanon records the highest score this September 2022 (363.3) compared to October 2021 (215.9).
Looking at the nutrition level, food inflation was detected as the cost is more skewed to the right for the year 2021-2022; rising food prices reduce the purchasing power of food consumers. Another devaluation could be mentioned in the transportation sector, as the transportation sub-index of the CPI basket in Lebanon increased by 2339 points in September of 2022 (3,725), compared to August 2021 (1,386); the cost of transportation is significantly increasing, resulting in a limitation to access in the transportation sector.
It is worth mentioning that the CPI in Lebanon has more than doubled over the past year, peaking this September 2022 at a score of 1,611.4 against 714.8 in October 2021, and a higher CPI indicates higher inflation. This eventually leads to adjustments in the cost of living and income, which tends to worsen inequality or poverty as it hits income and savings harder for poorer or middle-income households than for wealthy households.
Healthcare System:
As stated by Joao Martins, MSF Head of Mission in Lebanon, “The crisis in Lebanon has been driven by years of corruption and now we are seeing that this can contribute to the destruction of an entire health system just as effectively as war or a natural disaster”. As a result, it is important to conduct a deep dive analysis on the healthcare system in Lebanon which is a dimension that measures multidimensional poverty.
First we will look at the current health expenditure (%of GDP) which takes into account the public and private health expenditure. By comparing Lebanon to the Arab World, we can notice that the current health expenditure is higher along the mid 2000 with Lebanon having 11% in 2000 while the Arab World having 4%. After that, Lebanon witnessed a decrease and the Arab World an increase reaching a value of 9% and 5%, respectively. The decrease in the expenditure in Lebanon has negatively affected the healthcare system as medication and vaccines are becoming scarce. Looking more closely, we can see in the next graph that the access to immunization has tremendously decreased in Lebanon. On average the access to vaccines (such as DPT, HepB3, and measles) has decreased from 83% (2000) to 67% (2021).
On another hand, we evaluated the demand for private insurance in Lebanon. As we can see, the demand has decreased from 70% (2000) to 45% (2021). This decrease is due to all private insurance companies converting their payment method to fresh U.S. dollars and since the NSSF benefits have diminished due to the economic crisis, most Lebanese people are now left with no proper access to health assistance.
Education:
We also conducted a survey on school and university students to analyze access to online education during the COVID-19 pandemic which was also identified as the new normal.
You can be part of our project by filling this online survey. Your answers are highly valuable to the development of our dashboard since the larger the sample size, the more accurate our results would be.
At a later stage, we would like to present our results to our target audience which are UN agencies, local NGOs, and Lebanese ministries. We got a total of 135 responses from all over Lebanon where the survey was populated via social media platforms. The majority of the respondents were university students or graduates. Most of them were unemployed or employed in a full time position.
We asked the respondents about their evaluation to their online experience; the answers rated their experience as poor or fair. On a scale from 1 being a very bad experience and 5 being a very good experience, most of the respondents rated the effectiveness of online learning as 3. In addition, we asked about the preferred type of education; the majority answered the traditional physical method as the most preferred following the hybrid method as second preferred. These answers make us conclude that the online learning experience was not that good in Lebanon. This might be due to the lack of training from the government and the teachers.
To further explore the facilities that were available to ease the online learning experience, we asked the people about their access to devices, electricity and internet. For the devices, the majority had access to devices that were mainly Mobile phones or laptops. Most of the respondents have access to electricity but not all the time while almost all the respondents have access to internet but the variance changed between access all the time and access but not all the time. Most of the respondents reflected that they couldn’t focus and they weren’t serious about their studies during online learning. Furthermore, on a scale from 1 being not at all to 5 being for sure, we asked the people about their willingness to retake the online experience. The answers varied between 1 and 2 mainly.
Finally, we asked the people about the disadvantages of online learning. Some of the responses include poor network, electricity cuttage, procrastination, weak communication, lack of motivation to study, more distraction, professors are not equipped with the resources, challenging experience for both students and professors. From this survey, we can conclude that Lebanon wasn’t prepared well for such a situation, especially its basic infrastructure which includes bad electricity and network services.
