Lebanese youth on their country and their future; Reflecting on the economic crisis that is Lebanon

Tuesday, July 9, 2019
Opinion by Jean AbiNader

As criticism grows among various political elites in Lebanon over rising sectarian strains that erupted recently in violence, a recent poll, the Arab Barometer, released its findings. The results are useful in developing perspectives on Lebanese society that may give indications of future responses to shifts in the political space of the country.

First, a caution: as with all polling, much depends on the way questions are phrased; the size and representation of the participants; the type of survey instrument which could be by questionnaire, face-to-face, or phone, to name the most prominent; the timing – is it before or after a critical event; and the reliability of the firm conducting the survey.

This is the fifth edition of the Arab Barometer and analysts have given it high marks in all categories so its results should be treated seriously, especially when they track other trends noted in previous surveys. Rather than go through each category, here is a summary of results in pertinent areas. The full report can be found at this link.

The economy is by far and away most mentioned as the primary challenge in the country. Some 45% put it ahead of corruption at 13% and public services at 15%. Confidence in the economy has increased since the first survey in 2006-07, from a measly 4% to a meager 14% in 2018-19 who say it is very good or good. Respondents in the Middle East North Africa (MENA) region are going in the opposite direction, however, falling from a high of 36% in 2012-14 to 23% in 2018-19.

The downward trend in looking at Lebanon’s economy continues, as only 11% believe that the economy will be much better or better in a few years, well below the regional average, which comes in at 36%. On everyone’s favorite topic, perceived corruption, 91% believe that it is a problem to a large or medium extent, down from 96% in 2010-11. At least 27% of the respondents believe that there are efforts against corruption to a large or medium extent.

What is surprising, and at odds with the Arab Youth Survey, is that only 28% of Lebanese listed their desire to emigrate as an option to deal with lack of economic opportunities. In the region, overall, 32% feel the same way. Youth age 18-29 exhibit the strongest desire to leave (35%) led by those with higher (33%) and secondary school (21%) education. The challenging reality throughout the MENA is of too few jobs for too many applicants, with various skills.

On the social front, 77% of urban and 80% of rural Lebanese agree that a woman can be a head of state; with the same percentages agreeing that men are better leaders. To complete the picture of the country’s leadership, 64% agree or strongly agree that religious leaders are as corrupt as non-religious leaders.

The results of this survey, along with others released the last two years, is that the Lebanese by and large have little confidence that the government will find a way through the current economic malaise and political jockeying. With a third of university graduates wanting to leave to find a better life, Lebanon is squandering its most important resource for attracting foreign direct investment, its qualified people.

Thanks to Deeb Keamy for pulling together the numbers for me…

In reference to the economy, my colleague Ambassador Edward Gabriel, president of ATFL, published his reflections on the economy during a recent delegation trip to Lebanon in a blog published by The Hill. His perspectives were echoed in an Asharq Al-Awsat article that provided a review of challenges to the economy. It noted that “High-level financial sources have warned against a slowdown in the process of restoring financial stability in Lebanon. The sources said that the time factor does not give the concerned authorities the margin of “luxury” that allow them to rely on the extension of public expenditure according to the “twelve-year rule” (an exception that allows one month’s payment according to the previous budget) until mid-July.

The article points out that, simultaneously, there are negative indicators in the productive (think construction and real estate) and consumer (clothing, durable goods) sectors, which is impacting and being impacted by the banking and financial sectors, hitherto the key stabilizers in the economy. Both articles express concern with the very low growth rate, the continued deficit in the balance of payments, and the passing of almost seven months without an approved budget. It is not clear how much longer the government can control the growing fiscal dilemma. As the Asharq Al-Awsat points out, “the public debt, which amounted to around $87 billion, is equivalent to over 155 percent of the GDP – one of the highest global rates.”

The article goes on: “According to a recent report by Standard & Poor’s, curbing the deficit is essential to reduce Lebanon’s high debt levels. This positive step, however, may not be sufficient to restore the confidence of investors and non-resident depositors, bearing in mind that the implementation of the procedures will begin in the second half of 2019.”

Similar concerns have been expressed by Fitch International and JP Morgan that the government is taking too long to move ahead with desperately needed reforms. While the Central Bank will continue “to protect the exchange rate of the Lebanese pound and to secure debt service financing in the short term,” serious fiscal reform is required.