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.
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.
