With Lebanon facing an unprecedented culmination of economic, social and political crises, a new report outlines how establishing life-cycle social grants could lay the foundations for a new social contract that is both sustainable and people-centred.
BEIRUT, 18 May 2021 – A new policy note by the ILO and UNICEF explores social protection policy reform that would enable Lebanon to address the various crises it faces, and outlines the costs of implementing such policies.
The study focuses on policy options for core life-cycle social grants. The comprehensive life-cycle approach to social protection addresses the different risks and vulnerabilities individuals face throughout their lives, and designs policies that provide adequate protection and income security at each stage. This is in contrast to the relief approach to social protection which primarily targets the extreme poor.
The paper makes the case for establishing social grants to provide adequate income protection to everyone experiencing a lifecycle contingency — mainly, a tax-financed child grant, a disability allowance and a social pension — as the foundation for a multi-tiered and rights-based national social protection system. Based on data from the latest Labour Force and Household Living Conditions Survey, the paper presents an assessment of coverage and cost of core lifecycle benefits adjusting eligibility criteria and benefit levels to balance the long-term objectives of achieving universal coverage against current available resources.
The paper is set against the background of the unprecedented culmination of economic, social and political crises currently facing Lebanon. Macro-economic, fiscal and monetary collapses have led to a rapid slowdown of business, rising inflation, increasing unemployment and underemployment. The economic fallout of the COVID-19 pandemic and damage from the Beirut explosion have worsened pre-existing labour market and social challenges. The ongoing deferral of urgent reforms has further intensified poverty and soaring inequalities. This brings to the fore the longstanding need for investment in an inclusive, lifecycle-based social protection system, the report stresses.
“This unprecedented crisis presents an equally unprecedented opportunity to re-imagine an inclusive lifecycle social protection system for Lebanon that not only protects the millions of those who have
suffered as a result of the crisis, but places investment in people at the center of a new social contract,” said ILO Regional Director for Arab States Ruba Jaradat.
“An approach that only temporarily protects households – or only targets the extreme poor – will not be sustainable if it does not address the structural weaknesses of the social protection system. What Lebanon needs is to build foundations of a solid social protection floor,” Jaradat said.
Lebanon’s national system for the provision of public goods services, and social protection is highly fragmented and unequal, and hinges on the assistance of international and national non-governmental organisations. With almost no tax-financed guarantees to provide basic income security for people facing lifecycle contingencies as children, during working age, and in old age, a large number of people in the “missing middle” lack any access to social protection.
For past decades, the primary source of economic protection in Lebanon has been universal price subsidies for key imports such as wheat, fuel, medicines, and a list of basic products – more recently through foreign reserves of the Central Bank of Lebanon. Talks about the partial or total removal of these subsidies have been underway since August 2020.
Taking away the only remaining form of state financed social support will lead to significant deterioration of the living standards of the poor and middle class, unless comprehensive, adequate and permanent social protection guarantees are put in place.
The report estimates that re-allocating around one quarter to one third of resources currently allocated to price subsidies towards social protection would be sufficient to set solid foundations for the social protection floor Lebanon desperately needs.
“It’s clear that Lebanon needs a national social assistance system now more than ever. But unless gaps are rapidly filled with solid, long-term social assistance programmes, this will only ever remain a dream,” said UNICEF Representative in Lebanon Yukie Mokuo.
“While the majority of the country are now facing a very difficult situation, those with specific vulnerabilities – like raising children or living with a disability – are simply left unsupported. The need to rapidly put in place schemes to support these groups is now very urgent indeed, especially as the country hurtles toward the removal of price subsidies that can cause a massive spike in the prices of almost everything overnight,” Mokuo said.
Immediate compensation measures should be accompanied by plans for development of a long-term, multi-tiered social protection system, and should set the foundation for a permanent social protection floor for Lebanon, the study holds. Comprehensive and inclusive income transfer programmes – based on broad coverage — are the most efficient and effective means of reaching the affected population, compensating for the negative effects of subsidy lifting while also promoting inclusion and reducing inequalities.
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