Arsal is a town of around 30,000 residents on the Lebanese-Syrian border, known for the fruits of its rock and soil, and its strategic position along smuggling routes between the two nations. In 2012, the town became one of the main way stations for Syrian refugees entering Lebanon and, by 2014, Arsal had become occupied by extremist militants engaged in the Syrian conflict. The occupation prompted the Lebanese Armed Forces to seal the border, cordon off the town, and expel the militants in the summer of 2017. Now that some form stability has returned to Arsal, the town is in need of sustainable economic development and reform to provide services for refugees, improve the livelihoods of Arsalis, and redevelop markets diminished by years of conflict and demographic upheaval. To further this process, this study assesses adaptations in the Arsali labour market during the aforementioned period and provides the first representative baseline of labour market characteristics as of the end of 2017.
The study then maps and analyses economic activity, employment trends, and barriers to employment to inform future interventions by the state and development agencies.
This study’s analysis demonstrates that traditional non-hazardous economic sectors in Arsal such as agriculture have been upended in favour of fast-growing informal sectors, the war economy and sectors dependent on humanitarian funding. In response, the study highlights opportunities to increase sustainable employment and foster new higher-value-added as well as provide recommendations for livelihood interventions targeting vulnerable Lebanese and Syrian communities in Arsal.
Decline of the Formal Economy: Prior to conflict, two sectors dominated the labour market: agriculture and quarrying. But since the onset of the refugee crisis in Arsal, humanitarian aid and education are the sectors that have garnered the most employment. And while quarrying and stone cutting remains the largest area of employment, jobs are hazardous and informal, devoid of occupational health and safety standards, and prone to child labour. The dominance of the quarrying and stone cutting sector over employment, the influx of Syrian labourers, and the new informal economy have also crowded out other more formal and sustainable sectors. Meanwhile, conflict, deforestation, and asset depreciation has devastated Arsali traditional agriculture, the lack of transportation all but cuts Arsal off from national and international markets, and the dearth of employment opportunities continues to increase tensions between Syrian refugees and Lebanese residents.
Need for Structural Reform: Today, the Arsali economy is reliant on injections of international aid and the haphazard fluctuation of the demand for stone products. Instead of allowing this uncertain economic reality to persist, a sustainable economic paradigm will need to be cultivated through the development of economic value chains in sectors that produce decent employment opportunities for Arsalis and Syrian refugees alike. The core of this transition would be the re-development of Arsal’s agricultural and pastoral value chains that have long provided a source of decent employment for both Lebanese and Syrians in Arsal.
That said, a sudden retraction in necessary humanitarian and development aid would likely result in an economic downturn just as Arsal begins to recover. Such a scenario could well fray the social fabric of the the town due to existing tensions over employment opportunities. Thus, any such retreat of the humanitarian aid must be managed through both short-term interventions and long-term structural reforms in key sectors.
High-level Recommendations & Findings
Value Chain Development of Sustainable Growth Sectors: Revive the agricultural sector and develop agribusiness value chains. Rigorous research into the financial and technical viability of different value chains would be the starting point of any such intervention.
Upgrade Transportation Infrastructure: The sustainable upgrade of internal road networks connecting North Bekaa to the rest of the country would facilitate growth and boost the region’s role in the transport sector, especially when export markets that require transit through Syria open up again. The core of such a transport upgrade will be the construction of the Baalbeck-Zamrani Highway to facilitate cross-border transport as well as the upgrade of the existing Aynata-Arz Road to increase access to markets across the country.
Incentivize Formalisation of Work: Informal work results in vulnerable employment that dissuades investment and sustainable development. Government and development players must incentivize businesses to transition toward formal structures, offering legitimate access to capital, credit, and capacity-building programmes.
Organize Labour Production: Current labour organizations are inadequate and overly-politicized.
In order to protect and strengthen cooperation among Arsali producers, future labour organisations must focus on economically viable association to access contracts, product quality and economies of scale. The development of appropriate legal and financial infrastructure will also necessary to enable contract farming, as well as public agricultural extension services.
Integrated Authority: Arsali enterprises, farmers, national stakeholders, and development organisations must cooperate for reforms to take hold. Hence, it is recommended that a dedicated body be established and tasked with value chain development in Arsal and North Bekaa under the authority of the National Economic and Social Council.
Near-term Actionable Recommendations:
Agribusiness Development: Prioritization tables included in this report should be utilized to identify select crops ripe for development and export. Following selection, government and development agencies should conduct rigorous product-testing so as to ensure quality appropriate to demand. Products can then be ranked by cost, revenue-generating potential, and market access. Finally, farmers should be encouraged to adopt the most viable crops and products.
Cash for Work: Employ Syrian refugees in community construction projects to rehabilitate infrastructure, redevelop agricultural land and bolster social cohesion.
New Schools: Invest in second shift schools for Syrian refugees that educate underserved communities and employ both Syrian and Lebanese women.
Reforestation: Encourage cooperation between the Higher Relief Council, Green Plan, and Ministry of Agriculture to jumpstart the process of replanting orchards, groves, and vineyards.
Proliferation of Green Houses: Supply farmers with 100 more green houses to meet demand for vegetables and cultivate agribusiness skills in the labour market.
As Arsal recovers from conflict, national stakeholders have a unique opportunity to transform a dependent, informal economy into a productive, formalised, and prosperous exemplar of post-conflict revival. For a town that has borne so much of the fallout from the Syrian conflict, a true sustainable economic recovery in Arsal would prove a shining example to emulate across Lebanon and further afield. Arsal is an opportunity that cannot be missed.