The World Bank said more investments in Lebanon’s infrastructure are needed to create more jobs, reduce poverty and improve the quality of life.
“Infrastructure reforms in ICT, electricity, water supply and transport would transform the quality of life for all, in addition to stimulating job creation. Electricity sector reform is paramount and would result in cost recovery for EDL, improved fiscal and external balances and reduced CO2 emissions,” the World Bank said in a lengthy report entitled “Promoting Poverty Reduction and Shared Prosperity.”
It added that poverty and high unemployment are among the key challenges facing the Lebanese government and these problems exacerbated following the outbreak of the Syrian civil war and the influx of refugees into the country.
“Lebanese consider job creation and social protection among their top development and shared prosperity priorities. In a World Bank survey of country stakeholders, Lebanese revealed that social protection and job creation/employment ranked second and third, respectively, in their development priorities behind public sector governance,” the World Bank said.
It added that the distribution of poverty has also been unequal – with poverty levels highest in the north and south of the country and in small, dense pockets in the suburbs of large towns, reflecting the unevenness of economic growth and development.
The successive governments since 2005 have all pledged in ministerial statements to carry out crucial development projects in underprivileged areas, mostly in the north and south.
But most of these pledges have not actually materialized for different reasons – most notably the unstable political and security situation.
The report noticed that the inadequate job creation in Lebanon has contributed to the rise in poverty in many areas.
“Though data are lacking, inadequate productive job creation has likely stymied rapid poverty reduction and shared prosperity in Lebanon. We know little about medium- to long-term poverty trends in Lebanon. However, global evidence suggests that wages and employment are the primary drivers of poverty reduction,” the report argued.
The World Bank stressed that data analysis also suggests developments in labor markets have not been conducive to creating more domestic employment opportunities, especially formal private-sector jobs.
“Most job creation has been in low productivity sectors, especially in trade. Only about one in three labor force participants have a formal sector job. Thus, without more and better earning opportunities, households in Lebanon have difficulty in achieving substantial welfare improvements,” the report explained.
Among the suggestions made by the World Bank to increase employment opportunities are investments in electricity production. “Reliable electricity would satisfy a prerequisite to support the transport sector which would itself unleash improved connectivity and stimulate growth. Such reforms would pave the way to attract FDI and stimulate a diversification of investments for the Lebanese private sector from real estate and government bonds, which would enhance Lebanon’s competitiveness,” the report said.
It added that factoring in renewable energy in Lebanon’s energy mix is an opportunity for green jobs, particularly as Lebanon seeks to meet its target of 20 percent of energy to be met by renewable energy by 2020.
The report also recommended more attention to the ICT sector, which is still underdeveloped.
“Upgrades in ICT infrastructure would generate jobs as would new related services in intermediary sectors pertaining to broadband that could be developed in e-banking, e-health and in new industries such as export-oriented IT-enabled services,” the report said.
It added that such ICT advances would also support Lebanon’s burgeoning technology ecosystem and stimulate further the creation of more high-quality jobs.
The World Bank named agriculture as one of the potential sectors to help create jobs in the country.
“Some of the challenges of the Lebanese labor market could be addressed through targeting agriculture and water investments. The agricultural sector experiences shifts in its production structure and declining wage income. Yet the Syrian crisis presents a sizeable opportunity for domestic producers,” the report said.
The report added that concrete investments could support the rehabilitation of irrigation schemes both through soft and hard infrastructure investments, consistent with the government’s 2015-19 agricultural strategy.
The report underlined the importance of improving the quality of education to help the youth find suitable jobs in the markets.
“Investments in human capital are crucial with opportunities existing at all levels of education. Quality early childhood education has been documented as a barrier to escaping poverty and could be a medium-term win. At the secondary and tertiary levels, educational programs that are better suited to meet the demands of the labor market in Lebanon are critical,” the World Bank said.