INTRODUCTION
The right to social security is an internationally established principle, yet the practice remains low despite progress in recent years to expand on social protection across parts of the world.1 According to the International Labour Organisation (ILO), as of 2020, almost half of the global population were effectively covered by at least one form of social protection2 while the rest remain entirely unprotected.
The coverage is very low for marginalized groups such as children where only 35 per cent, approximately one in three, benefit from child allowances that would ensure they receive childcare, nutrition and education. 3 In the Middle East and North Africa (MENA) region, vulnerable households face various challenges to access social protection schemes including deep-routed features of the economic model, labor market structures, unequal distribution on spending and coverage, demographic pressures, conflict and displacement, gender barriers, and more. As such, only 40 per cent of the population in the region enjoy effective coverage of at least one area of social protection4. The situation is much worse in conflict-affected areas in the MENA region where only 20 per cent of the population are effectively covered5.
As a result, vulnerable households are susceptible to the adverse effects of shocks with minimal to no capacity to respond impeding their ability to achieve self-reliance or graduate from poverty.
In Lebanon, social protection has historically suffered from insufficient funding and a relatively feeble structure. Prior to 2019, the social protection system primarily served a fortunate minority, but at considerable expenses. Consequently, most of the population, especially the impoverished and most at-risk individuals, were left without adequate protection.
These vulnerable groups depended on assistance from their relatives residing outside Lebanon, relied on services offered by non-governmental organizations (NGOs) or received support from political leaders who frequently utilized social aid as a means of political favoritism. A study conducted by UNDP in 2022 “The Increasing Role and Importance of Remittances in Lebanon” demonstrates that Lebanon’s remittances stood at 37.8%6 of GDP, which represents the highest ratio in the MENA region. However, those types of assistance are not to be considered safety nets as they lack consistency, are needs based, and do not address the lifecycle approach to social protection7.
After 2019, there have been some initiatives and reforms aimed at improving social protection due to the multiple crises that hit Lebanon. These initiatives including the National Strategy for Social Protection, which aims to establish a universal and life-cycle approach to social protection, and the expansion of social assistance for the extremely poor under the National Poverty program. However, despite the efforts, these programs still lack solid coverage and do not respond to the dire needs, especially for refugees who are left without any form of governmental social protection support. The economic and financial crisis that the country has been facing, combined with the impact of the COVID-19 pandemic and the Beirut Port explosion have further highlighted the urgent need for stronger social safety nets.
Lebanon is currently facing a series of unprecedented crises that have had, and continue to have, major repercussions on the population, with minimal capacity of the government to respond. The Government of Lebanon was not prepared to respond to shocks, let alone an economic crisis ranked among the “most severe crises episodes globally since the mid-nineteenth century,”8 with inflation rates recording highest in the world at 139 per cent followed by Zimbabwe and Argentina9, the COVID-19 pandemic rated between the top 6 worst pandemics in history10, and the Beirut port explosion rated as one of the biggest non-nuclear explosions in recent history11.
The country’s real Gross Domestic Product (GDP) has contracted by 37.3 per cent between 2018 and 202212, erasing 15 years of economic growth and hindering the prospects of recovery. Prior to the crisis, poverty, and extreme poverty13 were already on the rise, with estimates indicating an increase from 25.6 per cent to 37 per cent and from 10 per cent to 16.2 per cent, respectively, between 2012 and 201914. Moreover, over the past two years, poverty and food insecurity continued to rise, with findings from the Integrated Food Security Phase Classification (IPC) estimating around 1.4 million people facing high acute food insecurity15.
Those challenges impose serious threats on the fiscal space for social protection. As lower tax revenues and increased demand for social services increase due to rising unemployment and poverty rates, funding for social protection is hindered by the inability of the government to allocate sufficient budget to ensure vulnerable communities have access to safety nets.
The crises have had various impacts on the context in Lebanon. In April 2023, driven by record high currency depreciation, Lebanon recorded the highest nominal food price inflation rate in the world at 350 percent, as reported by the World Bank16. In addition, the local currency has lost up to 98 per cent of its value reaching LBP 100,000/USD amidst rising tensions, bank strikes, and limited foreign exchange interventions by the central bank, Banque du Liban (BDL). Furthermore, the financial and economic crises have impeded the ability of businesses to operate leading to an increase in unemployment rates reaching as high as 30% in January 202217.