Lebanon’s Latest Economic News Raises Old Ghosts – Graduates’ Seeking Work, Parsing the News on Gove

Friday, August 24, 2018
Opinion by Jean AbiNader

Poll results noted by Byblos Bank in “Lebanon This Week” (Issue 548, 9Aug2018) pointed out that 90% of Lebanese university graduates responding to a poll by Bayt.com and YouGov, indicated that finding a job is their main challenge. This was followed by 58% who picked ability to afford a basic lifestyle, and discovering what to do in life by 39% of respondents. It was an on-line survey conducted during May and June this year.

The survey also showed that 58% of Lebanese graduates believe that “their lack of experience is the biggest challenge they face,” followed by effectively searching for a job (35%), finding a relevant job (29%), and developing interviewing skills (23%). When selecting an occupation, 52% “consider the nature of work and their passion for the job most important.”

Recognizing trends in the workplace, 58% of graduates believe that computer skills are crucial, followed by language skills (45%), communications and technical skills (39%) teamwork and the ability to adapt to change (29%), analytical skills, and leadership and negotiation skills (16%). Also of interest is that 52% believe that companies hire new graduates because of their low salary expectations, while 71% consider the lack of experience hinders job prospects followed by inadequate skills (58%).

The final data reported is quite telling. Fully 61% use online job sites for their first jobs, networks of family and friends (58%), social media (48%), while 32% applied directly to companies for their first job. It is challenging that 87% of those surveyed “indicated that their college education did not help them identify their employment opportunities, while only 13% believed that their education helped them find a job.”

Unfortunately, it was not possible to find the complete data sets on any of the relevant websites to further analyze the data by university, gender, social indicators, or other useful identifiers. The results definitely bear deeper analyses. Some of the soft skills issues are being addressed in the USAID programs mentioned in my previous blog.

No matter what the statistics say, this is not good news. Despite the spin by Nabil Itani, head of the Investment Development Authority of Lebanon, the agency should be embarrassed by the numbers he cited. He said “65 projects valued at over $1.9 billion have been awarded investment incentives since 2001,”providing about 10,000 direct jobs and 20,000 indirect jobs. He commented that “With our support for investment, we are enhancing the positive impact it will have on the Lebanese economy, either by promoting economic growth rates, creating sustainable employment opportunities, or contributing to the introduction of advanced technology in the production process.”

Given the direct employment of 10,000, this means that each job created cost $190,000 of investment while adding in the indirect number of an additional 20,000 brings it down to a $60,000+ cost per job added. Compared to other non-oil producing countries in the region, this does not promise a bright future for the impact of government supported investment without a strategic and integrated effort to treat the economy as an asset rather than, as critics charge, a cash cow for protected interests. World Bank/IMF studies show that Lebanon’s costs for job creation are twice those in Jordan and four times those in Morocco. Unless these exaggerated costs are addressed in the proposed projects reviewed at the CEDRE international donors conference by widespread and thorough reforms, it will be years before Lebanon’s economy reaches 6-8% growth again, if ever.

In a somewhat critical assessment of the future of cannabis as an option to revive Lebanon’s moribund economy, MiddleEastEye.net took issue with the recommendation by McKinsey that the government seriously consider becoming a legal supplier to growing markets worldwide. According to Bloomberg, McKinsey’s extensive recommendations were presented to Lebanese President Michel Aoun in early July and also include “building a wealth-management and investment-banking hub,” “setting up a construction zone for prefabricated housing that can be used in the rebuilding of war-torn Syria and Iraq,” and getting in on new avocado markets. But the recommendation that drew the most attention was the legalization and commercialization of cannabis.

Of course Lebanese political figures are clamoring to take credit for the idea but the reality remains that it will be quite difficult to pry loose the current production from its warlord and tribal producers. The Guardian’s Richard Hall reports that “most cannabis production in Lebanon is controlled by a collection of powerful clans in the Bekaa,” whose wealth “has made them a power unto themselves – armed to the teeth and willing to challenge the police and army when their livelihood is threatened.” Some of the leading political families are also rumored to be tied up in illegal cannabis business so the reporter wonders if legalization for export can really change or will it be “business as usual.”