One in every three Lebanese citizens falls into poverty: World Bank

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The World Bank said Thursday that one in every three Lebanese citizens had fallen into poverty as the socioeconomic crisis in the country had drastically exacerbated the situation.

According to a report, the World Bank concluded that poverty in Lebanon has tripled since 2014, based on a household survey conducted in Akkar, Beirut, Bekaa, North Lebanon and large parts of Mount Lebanon.

“Lebanon’s ongoing crisis raises the urgency to better track the evolving nature of households’ well-being in order to develop and adopt the appropriate policies” said Jean-Christophe Carret, World Bank Middle East Country Director.

“The Poverty and Equity Assessment highlights the critical need to improve targeting the poor and expand the coverage and depth of social assistance programs to ensure needy households’ access to essential resources including food, healthcare, and education,” he added.

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The report shows how poverty rates increased unevenly across different geographies in the country between 2012 and 2022, with the highest being 70 percent in a region near Syria’s border Akkar, where most of the population works in sectors of agriculture and construction.

Last December, the World Bank warned that the conflict in Gaza would push Lebanon’s already deteriorating economy back into recession, blaming a major hit to the tourism sector.

A Palestinian girl carries cans to collect water as she walks by houses which were destroyed in an Israeli strike, amid the ongoing conflict between Israel and Hamas, in Khan Younis, in the southern Gaza Strip, May 22, 2024. (Reuters)
A Palestinian girl carries cans to collect water as she walks by houses which were destroyed in an Israeli strike, amid the ongoing conflict between Israel and Hamas, in Khan Younis, in the southern Gaza Strip, May 22, 2024. (Reuters)

On Thursday, the International Monetary Fund asked Lebanon to implement reforms to salvage what is left of the Lebanese economy, which collapsed in late 2019.

However, the conditional agreement on a $3-billion-dollar loan package, which Lebanon and IMF reached in 2022, is yet to be enacted in a national state of political turmoil by politicians who have been widely accused of corruption and administrative inefficiency.

Lebanon is being governed by a caretaker government led by Prime Minister Najib Mikati, who has limited authority in the absence of a president and gaps at the executive level in the country.

Lawmakers in Lebanon have failed to elect a new leader for more than a year as it undergoes what the World Bank has deemed as one of the ten worst economic crises in the world since the 19th century.

New poverty line

A new “unofficial” poverty line has been adopted for the scope of the study and to adapt to the rapidly growing financial crisis in the country.

“The existing national poverty line from 2012 no longer captures the current consumption patterns or conditions faced by households in Lebanon today,” the report said.

Along with poverty, income inequality has also sky rocketed. The poverty gap has risen from 3 percent in 2012 to 9.4 percent in 2022 as those Lebanese who have fallen into poverty in the latter years have fallen deeper than those before them.

Dollar imperialization

The widespread adoption of the US dollar in the economy has also impacted how inflation impacts different households.

A man leaves a currency exchange shop in Sidon, Lebanon January 25, 2023. (Reuters)
A man leaves a currency exchange shop in Sidon, Lebanon January 25, 2023. (Reuters)

Lebanon’s currency has depreciated since facing nationwide anti-government protests in 2019. The country devalued its official exchange rate against the US dollar for the first time in 25 years last year, weakening it by 90 percent and leaving the pound way below its market value.

The central bank announced the official rate of 15,000 pounds per dollar, scrapping the rate of 1,507.5 pounds at which the currency was pegged for decades before the economic collapse.

“With the rapid expansion of a dollarized cash-based economy, Lebanese households earning in dollars find their purchasing power preserved, while those without access to dollars are increasingly exposed to escalating inflation,” the report said.

Syrian refugees also hit

Lebanon says there are an estimated two million refugees from neighboring Syria. At least 785,000 are registered with the United Nations after fleeing war-torn Syria.

“Almost nine out of every 10 Syrians are under the poverty line in 2022, while 45 percent of poor Syrian families have less than acceptable food consumption scores,” according to the report.

Syrian refugee children play near their tents at a camp in the agricultural plain of the village of Miniara, in Lebanon's northern Akkar area on May 20, 2024. (AFP)
Syrian refugee children play near their tents at a camp in the agricultural plain of the village of Miniara, in Lebanon's northern Akkar area on May 20, 2024. (AFP)

The World Bank said that Syrians were more susceptible to impoverishment and food insecurity because most of them in the workforce are engaged in informal employment or work for lower wages.

The effects of the influx of Syrian refugees and the subsequent rise in population was largely countered by the existence of segmented labor markets, but the 2019 financial crisis in Lebanon forced Lebanese nationals to take on low-skilled jobs, the report found.

“This shift is partly due to a shrinking pool of better-paying skilled jobs,” the report adds.

The World Bank excluded Palestinian refugees residing in camps and gatherings across the surveyed regions.

Looking ahead

Systemic intervention, comprehensive macro-fiscal reforms, and conscious investment in social welfare projects have been projected as solutions to curtail the crisis in Lebanon.

A man rides his motorcycle past the shuttered gate of a public school in Beirut on September 21, 2023. (AFP)
A man rides his motorcycle past the shuttered gate of a public school in Beirut on September 21, 2023. (AFP)

Giving better access to quality education and affordable health care, along with improving public transport facilities are expected to increase access to schools, healthcare and jobs.

Strategic programs that match the skill sets of workers with appropriate employment opportunities in organized sectors of the economy or fostering small businesses have been projected as a solution for Lebanese families to reduce the likelihood of falling into poverty or help them climb out of it.

Read more:

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