Lebanon + 1 more

Household Economy Analysis (HEA) Outcome Analysis: Beirut, Akkar and Baalbek (March – May 2022)

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Author(s): Amelia Charles, FSL Technical Advisor, Save the Children Lebanon

Summary

Lebanon is experiencing overlapping crises: a severe economic and financial crisis, the COVID-19 pandemic, the Port of Beirut explosion and most recently a food security crisis compounded by the conflict in Ukraine. According to the World Bank, the country’s nominal GDP has contracted by 58% since 2019 having plummeted from close to US$52 billion in 2019 to a projected US$21.8 billion in 2021.1 The exchange rate continues to deteriorate sharply, keeping inflation rates at triple digits.

Faced with political inaction, these unresolved crises have created long-lasting scars on Lebanon's economy and society: basic public services are failing, unemployment is rising unabatedly, and human capital is severely depleted largely due to emigration. The private sector is severely constrained by a paralyzed financial system. Lower firm productivity and revenue generation have caused widespread layoffs and bankruptcies. Without policy reform, real GDP is projected to contract by over 6% in 2022, extending this poverty crisis and further eroding household resilience. While exacerbating social hardships, Lebanon’s crises are disproportionately impacting poor and vulnerable households and reinforcing inequality, with children bearing the brunt of each crisis.

In this context, Save the Children’s Household Economy Analysis (HEA) of Lebanese households in Beirut, Akkar and Baalbek Governorates has found that;

1- The economic crisis in Lebanon is affecting most aspects of children’s lives, including access to education and healthcare, engagement in labour, and food security, as well as their general safety in light of the deteriorating security situation in the country. The crisis will have lasting impacts on children, affecting their future livelihoods and physical and psychological wellbeing.

2- During the reference years in all locations analysed, child labour was not a common practice amongst Lebanese households.3 While still not seen as “typical” of any wealth group, multiple sources indicate that there is a notable increase in the number of Lebanese families engaging children in work as a direct result of increasing poverty. As a “bad year” coping strategy, child labour may increasingly lower school attendance in order for children to work.

3- The prices of basic food items have increased dramatically compared to overall inflation rates, which despite being alarming, overall inflation rates are substantially lower than the inflation of the cost of food. Given the increased proportion of food in current household expenditures among the poor wealth groups, it is clear that they are disproportionately affected by this discrepancy. Families are spending more on food but with inflation, they get less for their money. The consequence is that families have less to eat and have less to spend on children’s other basic needs, most notably, on education.

4- All wealth groups in all locations are regularly taking on new debt used increasingly as a strategy to secure food in the short term. Reliance on gifts and aid is increasingly prominent, particularly in Beirut, where aid (either formal or informal) or gifts from family or neighbours are a major new source of food for all income groups, including Middle income families.

5- Compared to October 2021, there have been additional decreases in the quality and diversity of foods. Notably, overall food insecurity for households in Beirut is higher than for their equivalent counterparts in Akkar and Baalbek, regardless of their wealth group.

6- Overall, households have moved away from consuming more nutritious foods and have increased their intake of carbohydrates – predominantly bulghur and rice. Less natural products are being consumed with an increased reliance on cheaper processed food. The consumption of vegetables, dairy, eggs, and meats continues to decline.

7- Similar to the October 2021 analysis, households in the Very Poor wealth group in Baalbek are still the most vulnerable, and are barely meeting their Survival threshold.4 Without assistance, any sudden market shock may cause Very Poor in Baalbek to face hunger in the near future, and they will not recover from the ongoing poverty crisis without significant external assistance. A further economic deterioration will result in the Very Poor in Baalbek facing Survival deficits, which may result in fatalities.

8- Middle income households in Akkar and Beirut are now facing Livelihood Protection deficits, which if sustained will lead to their increasing impoverishment.