LEBANON
Union for the Mediterranean country fiche
July 2013
Contents
Key demographic and economic characteristics ..................................................................................3
Main political and social developments ................................................................................................4
Education and training outcomes .........................................................................................................5
Labour market trends and challenges ..................................................................................................6
Employment policy measures ...............................................................................................................7
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LEBANON: UNION FOR THE MEDITERRANEAN
COUNTRY FICHE
Key demographic and economic characteristics
Situated in the Middle East, Lebanon is a small country (10,400 square kilometres) with a total
population of 4.2 million. Lebanese society is characterised by a young population. The percentage of
those aged 0-14 (22.1% in 2013) is higher than that of the European Union (15.4% in 2013), but lower
than that of its neighbours. The share of young people aged 15-24 is 17.7% and this has slowly begun
to decrease. Population growth is not particularly high (0.7% in 2011), again significantly lower than
the neighbouring Mashrek countries, namely Palestine, Jordan and Syria, whose population growth is
three times higher (World Bank, 2011).
The permanent and significant lack of official and updated data makes an analysis of the Lebanese
socio-economic situation very difficult, as no national census has been conducted since 1932 due to
political sensitivity over the size of religious communities, which is the basis of the political system.
The economy is strongly influenced by political instability, the global financial crisis, the regional
political situation which has given rise to high numbers of refugees, the high number of foreign
workers in the country as well as the high rate of emigration of skilled Lebanese workers. The sociopolitical instability and the economic situation are affected by the on-going conflict in neighbouring
Syria, which is putting immense strain on the country’s already fragile political system and resources
and increases the risk of unrest.
Emigration is a key aspect of Lebanese history and its socio-economic situation. The reasons for it are
linked to family, socio-political or economic factors. There are no up to date or official statistics on the
Lebanese population living abroad, although rough estimations (including second generation
emigrants) indicate that more than 10 million Lebanese live outside the country (double the current
1
population) . Emigration clearly accelerated during the civil war (1975-77), the conflict with Israel and
the subsequent war in 2005-06 and has remained strong during the last decade. World Bank data for
2011 estimates the number of emigrants at around 664,000 (15.6% of the total population). Inward
remittance flows are consequently very high (USD 8 billion in 2011). Emigration is seen as an
excellent option for career development and is therefore an attractive opportunity for high skilled
workers.
Immigration is also a key aspect of the country, but most of it is of a political nature. Out of 750,000
immigrants, more than 50% are Palestinian refugees (433,000 recorded by UNWRA in June 2011).
There are also around 50,000 political refugees from Iraq. The current major emergency is the high
number of refugees from Syria as a result of the civil war there. UNHCR estimations indicate a total of
2
588,000 Syrian refugees, of whom approximately 503,000 are registered . Due to peculiar LebaneseSyrian relations, Syrian workers have never been included in these numbers, but some estimates
produced by NGOs and the media talk of hundreds of thousands to half a million Syrian workers in the
country. Immigration linked to the labour market is mainly from close poorer Arabic countries and Asia.
GDP growth increased from 1.4% in 2000 to a peak of 7% in 2010 (with the obvious exception of the
years affected by political turmoil). Then it decreased to 3% in 2011 and was estimated at 1.5% in
2012. In parallel, GDP per capita has been growing at the same speed and corresponds to 2.2%
1
12.37 million according to United States Committee for a free Lebanon:
www.freelebanon.org/index.php?option=com_content&task=view&id=19&Itemid=43
2
http://data.unhcr.org/syrianrefugees/country.php?id=122
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(World Bank, 2011), which is by far the highest of the non-oil producing Middle East and North African
countries (with the exclusion of Israel). The service and banking sectors constitute more than 74% of
the country's gross national product; the industrial sector 20% and agriculture the remaining 6% in
2011. Trends show a decrease in agriculture and industry in favour of the services sector.
3
The contribution of SMEs to GDP and employment in Lebanon is difficult to estimate . However, SMEs
4
dominate business, particularly micro and small enterprises . The strong flexibility of SMEs, with the
strong entrepreneurial spirit of the population, and the solidity of the financial and banking sector has
protected Lebanon from the international crisis.
In different economic indices, Lebanon is classified among the countries not performing well.
Sometimes legislation and practical implementation and sometimes political factors hinder
developments. Lebanon is not performing particularly well on the “ease of doing business”, ranking
th
st
5
115 (out of 183) in 2013. Lebanon is placed 91 in the “Overall Economic Freedom” index (2013)
and is therefore classified as “mostly unfree”. The World Economic Forum’s Competitiveness Index
puts Lebanon 92nd out of 139 countries in the 2012-13 report.
Main political and social developments
In March 2013, the Prime Minister resigned, mainly due to the security situation in the country and his
inability to broker an agreement on a new electoral law. The current government is continuing
activities as caretaker. The new Prime Minister is working to form a new government and get
agreement on the new electoral law. However, the conflict in Syria and the recent Hezbollah statement
that they will continue fighting in Syria in support of president Assad, represent an increasing threat to
Lebanese internal security. Violent sectarian incidents are spreading, and in some parts of Lebanon
revolts and fights are permanent. The tensions have reached the capital and opposition between the
two main political parties is increasing.
Since gaining independence from France in 1943, Lebanon has been governed by a confessional
system based on the 1932 census, which attempts to share power between three main religious
groups (Christians, Sunnites and Shiites). The 1926 constitution, amended after the 1990 Taif
Agreement and the 2008 Doha agreement specified that there should be 64 Christian deputies and
64 Muslim deputies. Within those two groups seats should also be shared according to the
demographic weight of each community. The Lebanese constitution also guarantees segmental
autonomy to 18 recognised communities in the country and the distribution of the country's state
offices along religious lines, with the president a Maronite Christian; the prime minister, a Sunni
Muslim; and the speaker of parliament, a Shiite Muslim. Although this balance has helped to establish
an acceptable level of stability in the country, it has nonetheless made political life and society very
rigid. Implementing reforms is always a delicate exercise which is often blocked to avoid potential
conflicts.
In terms of freedom, Lebanon ranks 4.5/7 and is considered ‘partly free’ in the 2013 Freedom House
Index. It is difficult to identify a trend over the years as the situation is in continuous change due to the
high risk of internal conflicts among the three main religious groups. Lebanon scores much higher in
rd
the “Bertelsmann transformation status index”, where it was 43 out of 128 countries in 2012 (the
th
th
other countries of the region are all at around 80 position) and 58 in terms of transformation
3
OECD, Improving the entrepreneurial finance: Venture capital and access to credit for SMEs,
www.oecd.org/dataoecd/48/55/38515315.pdf (Accessed on 17 May 2011)
4
ESCWA, Expert Group Meeting, http://css.escwa.org.lb/sdpd/presentations/3-4Nov07/2-4-Lebanon.pdf
5
Overall Freedom Network, Fraser Institute 2013 at www.freetheworld.com/
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management. However, corruption remains a key problem in Lebanon, which scores low in the
th
6
“corruption perception index” of Transparency International, ranking 128 in 2012 . In the World
Bank’s governance indicators, Lebanon is performing poorly in all criteria.
nd
The UNDP Human Development Index puts Lebanon ahead of all its neighbours (72 in 2012), but
information on poverty in Lebanon is very limited. Based on the 2004-05 surveys (National Survey of
Living Conditions and Household Budget Survey), a study in 2008 shows that 8% of the population is
extremely poor with striking regional disparities. The same study also finds that inequality represented
by the GINI coefficient is very high (0.37%). In addition, on the basis of a World Bank working
7
definition, the headcount poverty rate is estimated at 28.5% .
Education and training outcomes
The Lebanese education system performs quite well compared to many neighbouring countries and is
characterised by a significant and diversified private sector contribution and a high level of access.
Equity remains, however, one of its main challenges. While total education spending (public and
private together) exceeds 11% of GDP, public expenditure on education amounted to just 1.65% of
GDP in 2011. The gross enrolment rate was 90.3% in lower secondary and 76% in upper secondary
8
and 57.6% in tertiary education (ISCED 5 and 6) in 2011 . Indeed, Lebanon ranks the highest in the
region in terms of university enrolment rates. The same Unesco data also gave 7.9 years as the
average number of years of schooling among 15+ adults and 14.4 years as the school life expectancy
among children. The literacy rate for 2010 is 90%.
A national education and training strategy framework and a 2010-15 development plan for the general
education sector were approved (in April 2010) and are being currently implemented. Quality in
education is significantly different between public and private schools. Lebanon scored below the
th
average in the 2011 TIMMS survey (international maths and science test for 8 grade students),
th
though it was slightly better than some neighbours. It ranked 25 out of 42 countries in maths (score:
th
449) and 39 in science (score: 406). The private sector provides much higher quality education and is
accountable for a huge and increasing share of the educational provision at all levels (70% for primary
education, 60% for secondary, 60% for Vocational and Technical Education (VTE), and 50% for higher
9
education) . The predominant role of the private sector is proof of the importance allocated by the
Lebanese to education.
The VTE subsector is under the responsibility of the Ministry of Education and Higher Education
(MEHE) and represents 17% of the student population at the secondary education level (ISCED 2+3
together), according to 2011 Unesco data. Looking at each level separately, however, the share of
VTE students at lower secondary is 5% and at upper secondary 32%, showing higher attendance in
VTE at ISCED 3 level. The VTE subsector, despite being under the same ministry, appears to function
independently from the other education sub-sectors. The VTE action plan that was approved in 2011
looks at critical issues such as quality assurance, including improvement of the evaluation system,
teaching staff contracts, decentralisation, and curricula reform. The effectiveness and success of the
action plan requires the development of a vision for VET and closer partnerships with the business
sector. The structure of qualifications within the VTE system was reformed in October 2012 through a
Ministerial decree. The aim of the reform is to bring more flexibility within the system and create
6
http://cpi.transparency.org/cpi2012/results/
7
Heba Laity et al. Poverty, Growth and Income Distribution, in Lebanon, International Poverty Centre, UNDP, 2008, www.ipcundp.org/pub/IPCCountryStudy13.pdf (last accessed 17 May 2011).
8
All figures are from UNESCO UIS database (last accessed 29 June 2013). Data for 2012 not available.
9
Torino process report, 2012
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pathways towards higher education. The absence of a clear vision or specific strategy for the
subsector, the poor quality of the teaching staff, outdated curricula and general weaknesses in the
VTE institutions remain the main challenges.
Adult learning is led primarily by the very dynamic, albeit fragmented and uncoordinated, NGO sector.
The most prominent national initiative is the literacy programme run by the National Committee for
Illiteracy and Adult Education. The three-level ‘For a Better Life’ programme is the foremost national
programme. According to the Committee’s statistics, in the last 10 years, 24,393 participants (around
6,112 women) benefited from this programme. However, the bulk of adult learning is left to private
sector and NGOs supported in many cases by international organisations, providing a range of adult
learning programmes of a vocational or more general character. The scale of these programmes
cannot be properly assessed due to a lack of data and its fragmentary nature. Moreover, such training
is not sustainable since it is conditional on the presence and interest of NGOs and donors. The
National Employment Office offers a range of short training courses for adults, which are outsourced
to certified training providers, in most cases NGOs.
Labour market trends and challenges
The Lebanese labour market is characterised by low activity and employment rates, a low contribution
of women to economic life, a large sized informal sector, high influx of foreign workers and a large
number of skilled Lebanese people seeking and obtaining employment abroad. Palestinian refugees
also represent a group in need of employment, however due to their special status and the limited
number of occupations they have access to they seek and find jobs mainly in the informal labour
market. The size of informality as a percentage of GDP is estimated to be 36.4% by the World Bank,
while the share of self-employment as a percentage of total employment is 32.9%. However, the share
of the labour force which does not contribute to any social security goes up to 66.9% among
10
employees . Currently, the high immigration of refugees from Syria will represent an additional
challenge for the Lebanese labour market as well as an immediate humanitarian emergency.
The most recent data related to the labour market dates from 2009. These indicate that the labour
force participation rate and employment rate are 48% and 43.4% respectively. The labour market is
male-dominated with 73% of all participants. Female activity and employment rates stand at 23% and
21% with one of the lowest rates in the world. The low employment and low activity rates of females
are attributed to social, cultural and economic reasons; however in Lebanon both employment and
activity rates are strongly affected and increase by education level. Women are more present in the
11
labour market as entrepreneurs and self-employed people .
In 2009, according to the central administration for statistics, the total unemployment rate was 6%,
with 5% for males and 10% for females. Unemployment is higher among the higher educated youth
and certainly for women (7.7% among upper secondary graduates, 8.8% among university graduates).
As in the other countries of the region, demographic pressure has a massive effect on youth
12
unemployment which totalled 13% for females and 7% for males. Some surveys show that
unemployment rates among people under 25 is four times higher than those of adults. One in three
poor young people with university diplomas is unemployed compared to one in five among the more
affluent group. In total, more than 40% of the unemployed live in extreme poverty.
10
World Bank (2011), The challenge of informality in the Middle East and North Africa.
11
Female participation in entrepreneurship is high in Lebanon, both in top management and self-employment. The percentage
of firms with female participation in ownership is 33.6%, almost double the regional average and almost at the same level as the
overall average (34.8% among all countries participating in BEEPS).
12
www.dailystar.com.lb/Business/Lebanon/Jan/31/Lebanons-youth-unemployment-rates-following-widespread-regionaltrend.ashx#ixzz1LYwFJqmX
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Employment policy measures
Despite the clear need in the country, there is no specific strategy or action plan for employment. A
number of factors hinder efforts to develop evidence-based policy on labour market and skills
development. Firstly, no accurate data is available on labour market by type of education, gender and
age (the last labour market survey is dated 2004). These include the influx of foreign workers into the
Lebanese labour market and the presence of a large informal sector. Secondly, the work of the
National Employment Office (NEO) in collecting and processing labour market information and
facilitating the matching of skills supply to demand is poor. In addition, taking into account the level of
interaction of the NEO with enterprises and the labour market in general, it is obvious that the
vacancies reported do not necessarily reflect the complete labour market demand. Thirdly, there is a
generally recognised mismatch between the outputs of the VTE system and the skills needs of
industries and services.
This has led to a growing imbalance between the overall supply and demand for labour and
consequently an increase in unemployment. The mismatch has not been studied and is poorly
understood. At present, there are no systematic school-to-work transition surveys, and only a few
tracer studies and anecdotal evidence provide information on the relevance of VTE provision to
current economic and labour market needs. Hence, the system lacks the instruments needed to gain
an understanding of the problems associated with the transition from education to work.
The NEO, part of the Ministry of Labour, offers training, retraining and short vocational courses,
primarily for the unemployed. It has four departments, for labour statistics, studies and planning,
guidance and vocational training, and employment and it also collaborates in the management of the
National Training Centre, an institution operated and financed by the Ministry of Labour. The NEO
runs three employment offices (job centres) located in Beirut, Tripoli and southern Lebanon. The few
programmes led by the NEO in partnership with the Directorate General of VTE (DGVTE) are too few
considering the size of the potential target group. The quality of those training should be also
enhanced.
In August 2010, the Minister of Labour signed a memorandum of understanding with the ILO to
enlarge the NEO’s premises, human resources and services. A new website was launched in 2012
and the NEO offices are connected via a LAN. The plan is to compile the first national labour force
survey which will provide a clear and up to date picture of the employment and unemployment
situation by region and by sector. Also of interest is the marked increase in the number of initiatives
undertaken by civil society organisations and donors in the form of literacy and entrepreneurship
courses for young people and job seekers. However, the impact of these initiatives is unclear owing to
their fragmentation and the absence of clear policy direction as well as comparable data and
information.
Urgent interventions are needed to reinforce the capacity of the NEO to collect reliable data on
unemployment and market demands; to support the MEHE in conducting annual tracer and market
surveys to determine how successful graduates are in finding jobs and keeping them, and to assess
the relevance and responsiveness of the VTE system to labour market demand. Employment
placement, guidance and counselling services should be introduced into the system as a way of
developing skills and serving the community. Non-formal VTE should be integrated into the system by
organising it into predefined models that can be recognised and accredited by formal systems. Finally,
the MEHE should establish a close relationship with the NEO, Ministry of Labour, Ministry of Social
Affairs, the social partners and other governmental and non-governmental training providers in order
to coordinate training, develop a national occupational and industrial classification system, and set up
a labour market information system.
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