Team: Ibrahim Al Jaifi, Zahraa Jassar, Rami Haidar, Ali Hachem, Rim Zeaiter, Fatima Ayoub
“ We don’t go to school; we work in the daytime to support our families and spend the rest of our day playing in the streets.”
Said Omar and Yazan, two inspiring kids in Burj Al Barajneh, a refugee camp in the suburbs of Beirut. Under 10 years old, both already carrying the responsibility of working to provide for their families instead of being enrolled in education.
According to ILO, it is estimated that 160million children are involved in child labor, 79 million of which are in Hazardous Work that is likely to harm children’s health, safety or morals. All these children, including young Omar and Yazan, are at an age when they are supposed to be provided for, educated and protected. Having to spend most of their time working in jobs that are unsafe and exhausting, their chances of leading healthy and thriving lives diminish with each dollar they earn.
Child Labor in Lebanon
The emergence of the Lebanese economic crisis in 2019 brought with it an increase in percentage of families with children engaged in child labor from 29% to 38% between 2019 and 2021 according to IRC.
GDP, as an indicator of the economic performance of a country, noticed a 65% decrease from $52B to $18B during the period of 2019 to 2021. With this drastic drop in GDP, the unemployment rate rose from 11% to 15% while the CPI more than doubled, leaving thousands of families under the poverty line with no sources of income.
With these dramatic and sudden changes in the economic situation, 3 out of 5 children in Lebanon dropped-out of school and most of the rest switched to public education. Education has become less of a priority for both the government and families.
From a social perspective, 44% of parents who have taken part in a study by the World Vision Organization believed that involving their children in paid labor enhances their life skills and assures a source of income for their households. Meanwhile, the responsible government agencies have no clear and applicable laws in place to prohibit children’s exploitation or ensure they are enrolled in education.
Implications:
Child labor has destructive impacts on the health of the child, exposing millions of children to physical, mental and emotional abuse. As a result, their mental and intellectual development face significant disruptions. Considering the increasing crime rates in the country and the exposure of children to illegal work activities, the forecasted 30% increase in crime rate in 2025 would involve criminal acts by juveniles.
Proposed Solution
Mr. Aws Al Kadasi, senior research analyst at Merci Corps, commented on the topic during an interview for this project:
“According to the UNICEF, one in 5 children in the least developed countries are engaged in child labor. A problem that was aggravated by COVID-19 and global economic decline that it takes a walk in Beirut to believe these numbers. Children require different systems of protection that starts with parents and extends to every office, business, institution, organization and agency, local and international, governmental or otherwise. Everyone, who is not a child, is responsible”
Both 8 and 16 Sustainable Development Goals highlights the need for international efforts to tackle the issue of child labor:
Target 8.7: Take immediate and effective measures to eradicate forced labor, end modern slavery and human trafficking and secure the prohibition and elimination of the worst forms of child labor, including recruitment and use of child soldiers, and by 2025 end child labor in all its forms.
Target 16.2: End abuse, exploitation, trafficking and all forms of violence against and torture of children.
Inspired by these goals as well as social responsibility towards the community, our project team designed an initiative to capitalize on the work of international aid organizations and local organizations and projects working to fight child labor and illiteracy.
Future4Kids (F4K) initiative aims to establish a cooperative relationship between NGOs that provides cash assistance to families and campaigns against child labor. F4K initiative will work on partnering with cash aid organizations and NGOs working in child education. Receiving cash assistance would be conditionally linked to the enrollment of beneficiaries’ children in education with families being required to show evidence of child enrollment in education periodically.
The initiative platform will allow these two parties to join efforts to encourage families to enroll their children in education. F4K platform will also allow for receiving public donations for child education campaigns carried out by our partners.
Where there is energy there is life, but what if that same energy is the reason life is being destroyed? Non-renewable energy resources such as coal, oil, and natural gas have been abused extensively over the years; and not only are they detrimental to the environment, but they are bound to finish in the future. The switch over to more sustainable sources of energy has been something that has not been around for a hundred years yet, for that it could still be considered to be still in its infancy today.
Sustainable Development Goal 7 is one of 17 Sustainable Development Goals established by the United Nations General Assembly in 2015. It aims to “Ensure access to affordable, reliable, sustainable and modern energy for all.” According to “SDG7 Energy Compact of the Republic of Lebanon”, by the year 2030, universal access to affordable, reliable and modern energy services should be ensured, as well as increasing substantially the share of renewable energy in the global energy mix, and expand infrastructure and upgrade technology for supplying modern and sustainable energy services for all.
Energy in Lebanon, ever since the mid-nineties has been dominated by oil, which represents more than 95% of the primary energy consumed in 2019 (Julian & Salameh, 2022). According to Electricité du Liban (EDL), in 1995 thermal energy expenditure was 4,349 GWh only to spike drastically to 14,617 GWh in 2017. In 2019, though, there is a noticeable decline in thermal energy expenditure as it settles at 11,665 GWh; with an increase in hydraulic energy from 415 GWh in 2017 to 829 GWh, thus almost doubling in two years. As a result, we notice that slowly, but steadily, Lebanon has been shifting its focus to renewable energy sources, thus aligning with SDG 7.
Source: World Bank Global Electrification Database from “Tracking SDG 7: The Energy Progress Report” led jointly by the custodian agencies: the International Energy Agency (IEA), the International Renewable Energy Agency ( IRENA ), the United Nations Statistics Division ( UNSD ), the World Bank and the World Health Organization (WHO).
Energy consumption in Lebanon has always been at a loss. From 1995 until 2019, Lebanon’s consumption averaged at 10,845 GWh whereas only 8,936 GWh has been averaged in production. Hence, this is where the deficiency lies. It is impossible to claim sustainability where there is an undersupply.
Despite the lack in production, Lebanon does in fact import sources of energy in order to fulfill the needs of the country in terms of electricity. That, though, does not reflect the reality of most Lebanese citizens. “For decades now, electricity has been a major issue in Lebanon. State-owned Electricité du Liban provides only two hours of electricity per day. However, some areas experience complete shut-off. Until today, the Lebanese people’s main alternative to state-provided electricity is resorting to private generators that work on diesel. Two problems emerge from this situation, the first one being the price of petroleum-related products” (Muro, 2021). Surprisingly, according to the most recent World Bank studies, in the year 2020, 100% of Lebanese have access to electricity. The reality of the situation is very different as aforementioned with privatized energy distribution becoming the norm, consequently aggravating the environmental situation.
Source:Electricité du Liban (E.D.L)
As the economic crisis intensifies day by day and energy costs rise by the hour, the more well-off portion of the Lebanese society has been resorting to alternative energy sources; mainly solar energy. Although that does not solve the problem per-se, it has spurred a mass transition as NGOs have hopped on board to provide solar panels to less-abled communities. As a result, more and more people have been stopping their memberships with alternative providers (generators).
It comes as no surprise, switching to solar energy. It is a step that is long overdue, and as the saying goes “necessity is the mother of invention”. Even though it is not exactly an invention, but through necessity, Lebanon is slowly becoming more sustainable! Lebanon has a lot of natural resources such as wind and water. However, the most interesting and important natural asset is the abundant sunshine, making solar energy in Lebanon the ideal alternative to consider for Lebanon to get out of the electricity crisis. Using solar energy in Lebanon saves money for the Lebanese people whose private generators’ cost keeps on increasing. In fact, for 12 hours of electricity a day, the fuel cost for private generators can be as high as $550 per day. Although the installation of solar panels is expensive as well, it is an investment. If someone pays $550 per day on fuel, installing solar panels will reduce their cost to around $140 per day. (Monzer, 2022)
Yet another possible solution, straying from the tradition of utilizing natural resources, is the use of yet another crisis Lebanon suffers from. The trash situation has been plaguing the country for years now and it is possible, with the right funding from the right individuals and associations to begin collecting this trash and transferring it to specialized factories that will in turn use it in order to produce energy. This long term investment thus solves two issues simultaneously, while providing job opportunities for many locals.
It is of the utmost importance in Lebanon to deviate away from oil as a main fuel for energy and depend more on renewable energy from resources such as sun, wind and water. In Lebanon up to 4.5% of electricity comes from hydropower and up to 95.5% from oil. Abiding by the goals set in the SDG 7 is a surefire way to take the appropriate steps to building a society in which sustainable energy is the norm. Despite being a long way from sustainable; with the aid of the diaspora, concerned NGOs, and the local community, it is possible to make use of nature’s bounties, which are plentiful in the 10,452 km2 of mountainous rushing streams, gusting winds of the vast planes, and the showering sunlight reaching every corner of the nation.
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
Lebanon has been historically exporting skilled workers to many regions in the world including Gulf, Africa, Europe, and North America. For more than 10 years, the Unemployment rate in Lebanon has been increasing to reach 11.35% in 2019 (from 6.35% in 2009). Since the Economic crisis in 2019, the rate has dramatically increased to reach 14.5% in 2021.
To dig deeper into unemployment in Lebanon we can see that the citizens with advanced education (holders of a university degree or above) are prone more to unemployment, in comparison to intermediate (secondary schooling) and basic education (primary schooling or below).
So what can we do to solve this?
It is worth mentioning that since the economic crisis in Lebanon in 2019 followed by the COVID-19 pandemic, the Lebanese economy deteriorated severely leading to the closure of many companies and establishments or downsizing in the terms of employees and costs.
Note that among the 3 sectors (services, industry, and agriculture), the services sector was the most to hold the burden of this economical crisis, especially for the restaurants, hotels, banks, and retail traders,…
The employment breakdown as per sector shows that the service sector retained the most employment over years, in contrast to agriculture which only received 11.32% of total employment in 2019.
Therefore, we should try to shift the load of the employment to the other sectors in Lebanon (industry and agriculture) by encouraging the highly educated persons to start their own businesses in this area, which will then lead to more employment from the less educated in these 2 fields.
This will not be attainable unless the government and international entities start incentivizing the youth by providing the below:
Access to finance (through long-term small loans at a minimized rate of interest)
Access to knowledge (by providing proper training to the youth in management and technical expertise)
Access to market (by providing the connections to the youth to sell their products through)
To note that some initiatives from the public have been launched to provide one or more of the above-mentioned, however, the government hasn’t yet started any steps to help.
Lately, Lebanon has been overwhelmed by hyperinflation: the value of the Lebanese Pound is plummeting as compared to the United States Dollar. More and more Lebanese Pounds are needed to purchase a dollar. The devaluation is partially caused by the fact that outflows of foreign currency from Lebanon are greater than inflows of foreign currency. Part of the problem is that for decades, Lebanon has been operating with a trade deficit, which means that it is paying more foreign currency for its imports than it earns from its exports. This means that there is a leakage of foreign currency from the Lebanese economy. So how can we improve the net trade balance to prevent leakages of foreign currency that result in further devaluation of the Lebanese Pound?
Well, the government can manage trade policies to interfere with foreign trade activities. Two potential instruments that a government can use are subsidies and tariffs.
When a government subsidies a locally produced product, the supply curve related to this product shifts from S0 to S1. This results in the price of this product decreasing from P0 to P1 which then leads to an increase in the quantity demanded from Q0 to Q1. By doing this, governments can incentivize their local producers to increase their output at lower prices which then makes the locally produced product more attractive to consumers than a more expensive imported alternative. If the local suppliers are able to fully satisfy local demand for their product, they could go on to produce excess amounts that could then be exported to other countries.
When a government introduces a tariff on an imported product, the supply curve related to the imported product shifts from S0 to S1. This results in the price of this imported product increasing from P0 to P1 which then leads to a decrease in the quantity demanded from Q0 to Q1. The tariff applied by the local government sets a markup to the price of the import product making it more expensive and thus less attractive to consumers as compared to locally produced products. This encourages consumers to buy local products instead of imported ones.
At an aggregate level, if local production levels across more and more product types increases to satisfy a bigger proportion of demand, the need for imports will decrease. Suppliers could even begin to export products. Increased production levels can also increase employment opportunities. At the same time, if at an aggregate level, consumers are willing to switch from imported products to locally produced products, the aggregate demand for imports will decrease which means fewer quantities of these products will be imported. The decrease in total import levels and or the increase in total export levels will result in a higher net trade position, or in other words a decrease the trade deficit or even result in a trade surplus if the total import level is lower than the total export level.
It’s worth mentioning that tariffs and subsidies should not be used as long term solution. Imposing tariffs on imports can result in retaliation from other countries in which they impose tariffs on Lebanon’s exports. Also, constantly subsidizing local production, requires funds that the government may not always have available. However, doing so on the short run motivates local suppliers to increase production which can help improve employment and development of domestic industries for future sustainability.
You may be thinking that this sounds like a lot of theory. Let’s take a look at an example of a country that used these policies. The Brazilian government imposes tariffs on imports and subsidizes local production. Additionally, the Brazilian government entered into several trade agreements with other countries to facilitate its exports. By doing so, Brazil was able to overcome its trade deficit and even operate at a trade surplus for many years.
The Lebanese Ministry of Finance, Ministry of Economy and Trade, and Ministry of Foreign Affairs should work together to enter into trade agreements with other countries to promote Lebanese exports, impose tariffs on imported products to shift local demand away from imported products toward domestic products and subsidize the production of local goods and services. By decreasing the net outflow of foreign currency from Lebanon, the Lebanese government can better manage the exchange rate and reduce inflation levels. This leads to more sustainable economic growth and more productive employment.
