I came across an interesting peer-reviewed study, "Poverty, Growth, and Income Distribution in Lebanon", prepared by Dr Heba Laithy, Khalid Abu-Ismail, and Kamal Hamdan for the International Poverty Centre, part of the United Nations Human Development Programme (UNDP). This blog item is not meant to review the research because it will not give enough credit to the valuable material from such a research on Lebanon, especially that detailed statistical information on Lebanon is not easily accessible. Nevertheless, I thought that it would be interesting to share my notes after reading the research. The paper is available on the Net by clicking
here.
The research analyzes poverty in Lebanon, especially extreme poverty, and suggests ways to overcome the problem. It finds that annual average per capita consumption in Lebanon excluding regional price differentials is $2650 dollars, highest in Beirut district and lowest in the North district; consumption distribution by societal status is unequal, with bottom 20% of the Lebanese population accounting for low 7% of all consumption, and the richest 20% of the population accounting for high 43% of all consumption. 8% (300K) of the Lebanese population live under an extreme poverty, which the paper reports to be $2.4 per day, and 28.5% (1 million people) are generally poor. The research also notes that 20.3% of GDP is required to improve the non-poor growth condition in order to statistically shrink the percent of poor people, whereas a lesser 14.8% of GDP would be required if government directly focuses on the poor. Quote: "When growth is pro-poor [directly focus on the poor], only 108$ per capita is required annually, whereas this amount increases to 213$ and 485$ in the 'distribution-neutral' [impartial focus on either poor or non-poor] and 'anti-poor' [focus on the non-poor] growth scenario”.
To me, a much more interesting finding is as follows. The paper states that it would cost every Lebanese resident only US $ 12 annually to lift the extremely poor individuals from extreme poverty, and US $116 to lift the entire average poor. Quote: "at US $ 12 per capita, the annual cost of eradicating extreme poverty in Lebanon is relatively modest, representing only a fraction of the country's annual external debt obligations." Other notable findings:
* The North district has 20.7% of total Lebanese population but holds 46% of the extremely poor ones and 38% of the overall poor. On the other hand, extremely poor are overrepresented in the South and the Bekaa in relation to their respective populations. Quote: “Bulk of poverty across the whole country is concentrated in four strata: Tripoli City, Akkar/Minieh-Dennieh, Jezzine/Saida and Hermel/Baalbeck are home to two thirds of the extremely poor and half of the entire population despite the fact that they make up less than one third of the Lebanese population."
* (Nice observation and worth additional study) even the extremely poor youth with higher educational degrees are highly unemployed; half of extremely poor are unemployed, as well as one third of university graduates. This is a sharp contrast to one fifth of non-poor youth with higher education being unemployed. Moreover, households headed by individuals with less than elementary education constitute 45% of the total poor. By economic sector, the research reports, (quote) "agriculture and construction exhibits the largest shares of extremely poor workers.
* Illiteracy rate of the poor is highest in Beirut (38%), though one would assume that the district with the highest poverty (i.e. the North) would have the highest illiteracy. The research suggests that since agricultural activities are dominant in the North, low returns from labor in that region discouraged education advancement and resulted in a weak statistical correlation between illiteracy and poverty.
The paper then suggests fiver major pillars to tackle extreme poverty in Lebanon. A) “Inclusive and sustained growth” (jobs, productivity and incomes for poor households); B) “expanding educational opportunities” by ensuring that the poor enroll and remain in schools; C) “promoting more balanced regional development”, such as improving development condition in the North; D) “focusing resources on poor households”, maybe by eliminating benefits to those with higher income or apply some test mechanism, such as Proxy Means Test, to identify eligible person; E) “monitoring outcomes” for an successful action plan. The research then concludes with several specific mechanisms to address the issue. This is an interesting research; especially that it includes many rich statistical data on Lebanon. I recommend that you read it.
Labels: finance, lebanon, society