Lebanon + 1 more

Market Assessment in Saida & Nabatieh Districts: Identifying Income Generating Opportunities in Agro-Food & Environment Saida - Lebanon, July 2018

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Executive Summary

The labor market in Lebanon continues to be characterized by high unemployment rates, amidst the Syrian Crisis in its seventh year. While World Bank estimates the national unemployment rate to be 11%, the Ministry of Labor reports an even higher estimate, 25% national unemployment rate with 37% for youth under 35 years of age, and 18% for women. The picture in the South does not differ much from the national one. The official statistics indicate 65% of the Palestinians and 89% of Syrian Palestinian refugees are living below the poverty line and adopting negative coping strategies, be it selling household goods, cutting food intake, or withdrawing children from schools. Improving the situation of such vulnerable communities requires support to integrate in the labor market, and access income generating opportunities, in high performing economic sectors that are strategic to the regions and those that provide both employment and business opportunities.
Identifying such high performing economic sectors required an assessment, carried out by PU-AMI to understand the current labor market in Saida, Nabatieh, and Jezzine districts, through interviews with different stakeholders, namely small and medium enterprises and identify opportunities for supporting vulnerable populations to access market opportunities, whether employment or selfemployment, providing recommendations to the organization on how to increase access to such opportunities and develop programs that lead to meaningful impact within the coming two years.

The assessment provided a snapshot of the labor market in the regions, mapping the different livelihoods interventions undertaken by different local and international associations working in the region, namely in the form of vocational training provisions, within the bundle of social services offered to different age groups. The mapping indicted that accelerated education or market-based skills training provided by international organizations are more compatible with market demand, based on in-depth analysis of skills gap in the current labor market. However, challenges exist for all organizations, namely in lack of investment in the region to improve economic conditions and create jobs, shortage of funds and sustainability of training programs, fluctuation of the Labor Market, making it difficult to address through proper training programs, restriction on work for Palestinians and The continuous change in governmental regulations regarding right to work for Syrians.

When it comes to analyzing labor demand, the assessment interviewed a sample of 20 enterprises, across the three regions, varying in their size (micro, small, and medium), and domain of operation within the various subsectors. Among the main findings from the interviews with different companies are:

The Syrian Crisis, political uncertainties and the worsened security situation around the Palestinian camps have significantly impacted the various businesses, regardless of the sectors in which they operate. Investments have shifted to other ‘more secure’ regions, and businesses have been left along to mitigate the impact. The decrease in demand due to Syrian crisis, though increased first at beginning but then declined, and increased overhead costs have been the main result of the crisis, let alone the overall economic stagnation that is influencing the whole nation.

Due to the current situation, companies have become more susceptible to global market shocks, given the high dependency on imports, sourcing small or large portion of their raw materials from abroad, more clearly visible in the diagram below. It is important to note that this applies to both small and large businesses interviewed.

Marketing and Access to markets is the foremost challenge unanimously highlighted by the various enterprises interviewed. Marketing is viewed as a challenge as enterprises have at least one marketing element missing or not properly functioning: distribution channels, or consumer profiling & targeting, or lack of clear marketing strategy.

The lack of skilled workers is a main challenge across all sectors, especially in the oriental sweets sector, as the new generation lacks the interest in learning the craft and thus having relevant skills fade away. This may require manufacturers to hire older ones, and pay higher wages to secure their employment, thus increasing cost of Labor.

When it comes to recruitment processes for new employees, traditional recruitment methods remain prevalent in the region, relying on personal connections for identifying new candidates, and walk-ins or having the potential candidates approach the company and fill in application. The walk-in is more common for larger enterprises that have retails outlets/branches such as the oriental sweets manufacturers. For the rest, personal connections and word of mouth is the main recruitment method.

Among the main findings from the focus group discussions- supply of labor are:

The majority of the people interviewed are living in extreme poverty conditions, be it in informal settlements in rural areas or unfinished houses in urban areas. Almost all participants emphasized the need for support to have ends meet and rent paid, be it through direct cash support or access to work to pay the rent.

Women, in general, face many challenges in their lives, but the cultural barriers are the most challenging and hindering factor against their integration in labor market. Whether single, or married with children, women are not able to apply for a full time job or be employed as either their husbands oppose the idea or employers prefer to have single women without children.

Majority of male participants interviewed, continuously try to look for any type of work without clear direction and guidance. Some rely on word of mouth, referrals from their friends or family members as to who is employing, but as it is daily or seasonal work, they cannot rely fully on it so go on daily basis to urban spots looking for work. Majority indicated that the work is always temporary, and they work one day and then 10 days no work. They are rather involved in low-paid, low-skilled daily jobs to sustain their living.

The high cost of renewing permits, lack of opportunities, and discrimination are major challenges facing Syrian and Palestinian refugees in their daily lives, and in their job search.

They claim wages are very minimal and more often they do not get paid the right amount or none at all, and they face discrimination in that employers do not want to hire Syrians or that they treat them unfairly The main recommendations, from both labor demand and supply findings, feed into program design that targets both host and refugee communities, focused on creating income generating opportunities, whether employment or self-employment. Building up skills of such communities is a key yet approach to such build-up differs across those communities.

Agriculture and food industry sectors are important pillars and offer significant opportunities for employment and self-employment, in addition to the emerging rural tourism sector. For Agriculture,
Avocados, Cherimoya and other fruits are in higher demand and fetch higher prices than citrus or vegetables. It is recommended to work on upgrading the technical skills of the value chain actors, mainly the workers of both nationalities, providing on the job-training in Fertilization, Planting,
Weeding, & Harvesting. Landscaping is another sub-sector that can be targeted, especially in Saida through hand-on training on gardening and public space maintenance skills, linking them to municipality for employment. Self-employment opportunities exist for refugees in agriculture grants provision, for renting plots of land for fruit and vegetable cropping which could be sold either to small retailers, or directly to refugees.

The Food Industry sub-sector provides opportunities for both Syrian and Lebanese communities and for both genders as well, in Saida, Nabatieh, and Jezzine districts. Majority of the actors in the sector are small and medium enterprises (SMEs) that are currently working with limited capacity yet can grow and expand if provided with proper support. It is best to have such support tailored to the needs of the enterprises, business coaching or training on specific skills to improve overall management and skills of labor as well. Food Handling, Food Safety, & Cooking (assisting in preparation, planning) seem to be the topics mostly in demand, and ones that will also have positive spill-over onto other related sectors such as healthcare (in nutrition kitchens, hospitals, catering).

Hospitality and Rural tourism sub-sectors present potential opportunities for income generation targeting both communities. In urban regions such as Saida, supporting traditional food industries can help first to maintain artisan industries that make up the identity of the region. In Nabatieh, rural tourism presents opportunities, given the current focus of the government on promoting rural tourism.

Thus, interventions can target skills build-up of labor for future, namely in hospitality such as guest house management, tourism route development and promoting local products manufactured by women groups.

Regardless of the option that will be further developed by the organization, empowering beneficiaries with soft skills is necessary to ensure success and sustainability of the designed interventions. In terms of non-technical skills, financial literacy, digital literacy and entrepreneurship skills are required. Finally, it is recommended to have a hands-on approach across all the sectors under consideration. Theoretical training is necessary but the practical training is one that proved to be more effective, especially on the job training, or learning by doing. Its effect is more sustainable on the long term.