A World Bank report released last week at the Economic and Social Council indicated that women constitute only 24% of the active population in Lebanon within a context of high unemployment rates especially amongst the youth.  According to the WB report this situation is largely due to the inherent weaknesses of the Lebanese economy notably at the level of the job market. .  The report which is entitled “Good jobs needed : the role of macro, investment, education, labor and social protection policies (MILES)”  notes that Lebanon needs to create 23,000 new jobs a year in order to meet employment demand as par of a comprehensive job creation strategy.  

The event was attended by the Minister of Labour, Selim Jreissati, the General Director of the Ministry of Finance, Alain Bifani, and the Economic and Social Council President Roger Nasnas. In addition to Ferid Belhaj, the Country Director at The World Bank, as well as the first vice-governor of the Banque du Liban Raed Charafeddine and others, with key note addresses by Nasnas, Belhaj, Bifani, and Jreissati.

Minister Jreissati pointed out for his part to the progress in the implementation of the “Youth first employment opportunity project” which he considers to be a first step in addressing the recommendations of the World Bank report.  He also added that social and economic policies in Lebanon require an enabling environment that ensures that political interests do not trespass citizens’ rights.

The report is the outcome of a three years collaboration between the World Bank and the Lebanese government within the framework of the Bank’s technical support and suggest a strategy to facilitate the coordination of investment, labor, capacity building and social protection policies aiming to strengthen job creation, consolidate the economy, curtail unemployment and gradually direct economic activity to highly productive sectors as well as facilitating access to social protection schemes.

The report is structured around three key axes, namely:
a)    The role of macroeconomic policies and investments;
b)    Employment and education;
c)    Social protection policies
As such, the report notes that despite the economic growth registered in Lebanon during the past decade, yet this growth was not coupled with the creation of sufficient jobs especially for women and youth.  For instance, between 1997 and 2009, the Gross Domestic Product increased by an annual average of 3.7% whereas job creation increased by 1.1% only.  Currently, 70% of men in their productive age are working versus 24% women.  In addition, unemployment rates in Lebanon are relatively high reaching as high as 34% amongst the youth, 18% amongst women and 14% amongst university graduates.

Furthermore, the report estimated that there will be 23,000 new entries into the job market per year within the next decade.  This will necessitate the creation of six times more jobs than the 34,000 new jobs created during the period 2004-2007.

The report further states that the trend of job creation from 2004 to 2009 essentially focused on sectors requiring low skills such as trade (61%), service industry of low productivity (33%) and construction (10%).  On the other hand, there was a marked decline in jobs in highly productive sectors such as ICT, insurance, finance and other technical and scientific sectors.  The low productivity service sector provides employment to 35% of workers and 61% of self employed whereas the high productivity service sector provides employment to only 14% of workers and 3% of self employed.

The report highlights the key challenges to job creation namely: the limited skills pool quoting that 65% of workers are high school degree holders or even less, migration of highly skilled workers and the influx of low skilled labor.  Despite the dearth of national statistics, the report refers to the migration of 200,000 to 400,000 between people between 1991 and 2009.

The report also points out to the growth of the informal sector and the shrinking of the public sector.  It estimates that 20% of overall workers are active in the informal sector which does not provide social security or is regulated by labor laws.  On the other hand, 30% of the active population is self employed in low productivity activities.  This raises the question of the coverage and outreach of existing social protection schemes which do not include the self-employed and informal sector.

The report proposes various macroeconomic and investment policies and highlights a number of interventions that need to be taken on board by the state in order to mitigate risks, encourage investments and economic diversity namely: strengthening the financial system, decreasing reliance on loans, bridging the supply and demand price gap in bonds, investment in infrastructure namely electricity and water in order to decrease the cost of investment by the private sector, reviewing taxation policies which are harmful to investments and do not encourage job creation, strengthening the capacities of creative entrepreneurs especially through increasing their access to finances for small and medium scale businesses.  Finally, the report also recommends the application of effective industrial policies so as to direct investment towards sectors that have a high added value.

To find the full report please click on the following link: "Good jobs needed : the role of macro, investment, education, labor and social protection policies (MILES)"

Source: Al-Akhbar 8 April, Al-Safir, The Daily Star 12 April 2013