No growth with­out re­form

Im­ple­ment­ing CEDRE and Brus­sels II re­quires good house­keep­ing

Executive Magazine - - FRONT PAGE - By Nasser Yassin

Within a pe­riod of six weeks last spring, Le­banon re­ceived an at­ten­tive treat­ment from the in­ter­na­tional com­mu­nity.

On March 15 in Rome, an in­ter­na­tional meet­ing was held to sup­port Le­banon’s armed and se­cu­rity forces. Af­ter­wards in Paris on April 6, world lead­ers con­vened to of­fer Le­banon sub­stan­tial for­eign aid to bol­ster its econ­omy at the CEDRE con­fer­ence. Then on April 24-25, the in­ter­na­tional com­mu­nity re­it­er­ated its sup­port for Le­banon’s ef­forts in host­ing more than 1 mil­lion Syr­ian refugees at the Brus­sels II con­fer­ence on “Sup­port­ing the fu­ture of Syria and the re­gion.” These three oc­ca­sions sig­nal the world’s com­mit­ment to main­tain Le­banon’s sta­bil­ity, but also sig­nify the weak state of the coun­try’s se­cu­rity and econ­omy.

Le­banon’s econ­omy has ex­pe­ri­enced a slow­down since 2011due to the erup­tion of crises in Syria and the re­gion, and a re­sul­tant do­mes­tic po­lit­i­cal dead­lock. Real eco­nomic growth has been sub­dued for the past six years while pub­lic debt has been on the rise with its share to GDP surg­ing to reach a dis­con­cert­ing 150 per­cent in 2017, ac­cord­ing to the In­ter­na­tional Mon­e­tary Fund. Unem­ploy­ment has been grow­ing, and in refugee-host­ing com­mu­ni­ties a no­tice­able and sharp in­crease in mostly low-skilled la­bor­ers has led to an ap­prox­i­mate an­nual dou­bling of new en­trants into the work­force. In the same vein, risks of spillover from re­gional tur­moil, par­tic­u­larly in Syria but also in Ye­men, are not far-fetched. Adding to this, the coun­try is un­der strain from Syr­ian refugees, the vast ma­jor­ity of whom are des­ti­tute and re­side in dire con­di­tions among the poor­est Lebanese com­mu­ni­ties in un­der-re­sourced and un­der-served cities and dis­tricts.

De­spite rec­og­niz­ing the ef­fects of re­gional tur­moil and in­tense de­mo­graphic pres­sures on so­ci­ety and the econ­omy, as well as the need for in­ter­na­tional sup­port and for­eign aid to weather any po­ten­tial storm, Le­banon is in ur­gent need of se­ri­ous house­keep­ing.


Re­forms are press­ing, and have to go hand-in-hand with the plans to boost the econ­omy—such as the Cap­i­tal In­vest­ment Pro­gram (CIP) that was pro­posed at CEDRE. The Lebanese state needs to build a high-level po­lit­i­cal con­sen­sus for gen­uine re­form, with com­mit­ments to tackle the sys­temic na­ture of cor­rup­tion at all lev­els. New poli­cies are needed to min­i­mize graft and crim­i­nal­ize it. Im­ple­ment­ing the Ac­cess to In­for­ma­tion law, en­act­ing poli­cies to pro­tect whistle­blow­ers, and strength­en­ing an in­de­pen­dent ju­di­ciary are key in this re­form drive. It is also clear that to stop the si­phon­ing of state re­sources it is time to move away from the cur­rent clien­telis­tic prac­tice of us­ing pub­lic sec­tor em­ploy­ment to ex­pand the elec­toral cap­i­tal of politi­cians in of­fice.

Equally press­ing is the need to re­duce in­equal­i­ties. With 50 per­cent of pop­u­la­tion shar­ing only 5 per­cent of the coun­try’s wealth, 10 per­cent of pop­u­la­tion shar­ing 70 per­cent, and just 1 per­cent shar­ing 35 per­cent, Le­banon has among the high­est lev­els of un­equal wealth dis­tri­bu­tion in the world. This ne­ces­si­tates an open, in­clu­sive, and care­ful re­vi­sion of cur­rent so­cial and eco­nomic poli­cies, which may lead to a new and com­pre­hen­sive so­cial and wel­fare strat­egy that could shift the fo­cus to­ward more pro­duc­tive sec­tors in the econ­omy, the in­te­gra­tion of cur­rent so­cial wel­fare and so­cial pro­tec­tion pro­grams, and more im­por­tantly, a high-level po­lit­i­cal com­mit­ment to re­verse the in­creas­ing geo­graphic dis­par­i­ties in Le­banon. This should be in align­ment with Le­banon’s com­mit­ment to the UN’s Sus­tain­able De­vel­op­ment Goals (SDGs), specif­i­cally SDG 1, to end poverty in all its forms ev­ery­where, and SGD 10, to re­duce in­equal­ity within and among coun­tries.


Im­ple­men­ta­tion of the pro­posed de­vel­op­ment pro­grams and projects at CEDRE and Brus­sels II

Im­ple­ment­ing the Ac­cess to In­for­ma­tion law, en­act­ing poli­cies to pro­tect whistle­blow­ers, and strength­en­ing an in­de­pen­dent ju­di­ciary are key in this re­form drive.

needs to be in­clu­sive, in par­tic­u­lar of women, the youth, and refugees. It is cru­cial that this should move from ba­sic lev­els of par­tic­i­pa­tion to hav­ing the pro­grams and projects at­tuned to the needs of women in

so­ci­ety (in­clud­ing women in busi­nesses), to the youth (par­tic­u­larly in refugee-host­ing com­mu­ni­ties), and to the refugees them­selves, both Pales­tinian and Syr­ian. Im­ple­ment­ing an all-in­clu­sive ap­proach for de­vel­op­ment pro­grams and projects would re­quire new or mod­i­fied govern­ment di­rec­tives such as a quota sys­tem, a sim­pler work per­mit regime, and co­her­ent and ac­ces­si­ble ways for refugees to ac­quire res­i­dency pa­pers.

It is also es­sen­tial to have the planned pro­grams lo­cally-grounded, where mu­nic­i­pal­i­ties can part­ner to­gether in the de­sign, im­ple­men­ta­tion, mon­i­tor­ing, and later main­te­nance of de­vel­op­ment projects and ini­tia­tives. It is also key to pri­or­i­tize ar­eas and re­gions host­ing high­est num­bers of refugees, and in par­tic­u­lar the 251 most vul­ner- able lo­cal­i­ties ( kadas) that host 87 per­cent of Syr­ian refugees while at same time en­com­pass 67 per­cent of the most eco­nom­i­cally vul­ner­a­ble Lebanese. Here, de­vel­op­ment projects would gen­er­ate a so­cial sta­bil­ity div­i­dend with im­proved so­cial re­la­tions and co­he­sion be­tween hosts and refugee com­mu­ni­ties.

On May 17, a small event took place at the Beirut Port. Al­though not as grandiose as hav­ing world lead­ers gather around the ta­ble in Paris or Rome to show pub­lic sup­port for Le­banon’s sta­bil­ity or pledge to boost its econ­omy, it was a mo­ment to cel­e­brate as 20 tons of po­ta­toes farmed in the plains of Akkar were ex­ported to the Nether­lands. A mod­est size of ex­port yet a mo­men­tous im­prove­ment fol­low­ing painstak­ing ef­forts to re­vamp farm­ing prac­tices and en­hance the qual- ity of pro­duce to make it el­i­gi­ble for EU mar­kets. Le­banon can def­i­nitely ben­e­fit from more trade. In­deed, it needs to start re­vers­ing its trade deficit, which soared to $20.3 bil­lion in 2017. Trade cre­ates em­ploy­ment, par­tic­u­larly if it is geared to­ward boost­ing pro­duc­tive sec­tors in the coun­try’s pe­riph­eral re­gions where agri­cul­ture (e.g. Akkar and Bekaa) and man­u­fac­tur­ing ( e. g. Tripoli) are pre­dom­i­nant, as well as to­ward the ex­port of ser­vices, such as those found in the bud­ding tech­hubs in Beirut. Given the cen­tral­ity of re­forms, aid and trade should go hand-in-hand to put Le­banon’s econ­omy on sus­tain­able track.

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