One of out of every three Lebanese have fallen into poverty in 2022
BEIRUT, May 23, 2024 ¡ª Poverty in Lebanon has more than tripled over the past decade reaching 44% of the total population, according to a new World Bank report released today. Based on a recent household survey covering the five governorates of Akkar, Beirut, Bekaa, North Lebanon and most of Mount Lebanon, the report finds that 1 out of every 3 Lebanese in these areas was poverty stricken in 2022, highlighting the critical need to strengthen social safety nets and create jobs to help alleviate poverty and address widening inequality.
The ¡°¡± examines the current state of poverty and inequality in the country. It documents the impact of the economic and financial crisis on households as well as the effect on labor market dynamics. The report builds on a household survey conducted in collaboration with WFP and UNHCR?between December 2022 and May 2023, covering Lebanese, Syrians and other nationals?(except for Palestinians in camps and gatherings) in five governorates across Lebanon. Data collected covered demographics, education,?employment, health, expenditures, assets, income and coping strategies.
Now in its fifth year, the protracted economic and financial crisis has compelled households to adopt a variety of coping strategies, including cutting back on food consumption and non-food expenses, as well as reducing health expenditures, with likely severe long-term consequences. To better reflect these changes in household behavior, the report adopts a new unofficial poverty line developed for 2022. The existing national poverty line from 2012 no longer captures the current consumption patterns or conditions faced by households in Lebanon today.
The report reveals a significant increase in monetary poverty from 12% in 2012 to 44% in 2022 across surveyed areas. It also highlights poverty being unevenly distributed across the country. Notably, in the North of Lebanon, the poverty rate reached as high as 70% in Akkar, where most residents are employed in the agriculture and construction sectors. Moreover, not only has the share of poor Lebanese nationals tripled to 33 percent from a decade ago, but they have also fallen deeper into poverty with the poverty gap rising from 3% in 2012 to 9.4% in 2022. Concurrently, income inequality appears to have worsened among the Lebanese.
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. Remittances have become a pivotal economic buffer, increasing from an average of 13% of GDP between 2012 and 2019, to about 30% in 2022 (partly due to a denominator effect) and surging by 20% in nominal terms between 2021 and 2022. These financial inflows are playing an increasingly critical role in preventing a segment of the population from falling into poverty.
¡°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.¡±
The report also finds that Syrian households have been hard hit by the crisis. Almost nine out of every 10 Syrians are under the poverty line in 2022, while 45% of poor Syrian families have less than acceptable food consumption scores. The majority of working-age Syrians with jobs are engaged in low paying and more precarious informal employment which contributes to impoverishment and food insecurity. While segmented labor markets had mostly mitigated the impact of the demographic surge caused by the influx of Syrian refugees on labor market outcomes for the Lebanese, the 2019 economic crisis has led to Lebanese workers increasingly taking on low-skilled jobs. This shift is partly due to a shrinking pool of better-paying skilled jobs.
The report recommends a series of interventions to help build the resilience of households and their ability to weather the protracted crisis. Looking ahead, social safety nets will continue to play a critical role in helping households meet their basic needs. Comprehensive macro-fiscal reforms will support price stability and provide the fiscal space for social spending. Investing in human capital is also essential in building the resiliency of households, by ensuring and expanding access to quality education and affordable healthcare. Making public transportation more accessible and affordable will facilitate access to schools, healthcare and jobs. Initiatives that link job seekers with formal jobs that better match their skills and productive employment programs that foster entrepreneurship and small business development can also help improve the earning prospects of households and reduce the likelihood of falling into poverty or help climb out of it.
