Targeted Interventions Needed to Deliver More and Better Jobs for North Lebanon

Stocks and Financial Services Press Releases Thursday September 28, 2017 08:18
Beirut--28 Sep--World Bank

Beirut, September 27, 2017 — Addressing the employment gap in North Lebanon requires a comprehensive approach that targets both the private sector and the workers, according to a new World Bank report entitled "Jobs for North Lebanon – Value Chains, Labor Markets, Skills and Investment Climate in Tripoli and the North". The report highlights the opportunities that exist for targeted interventions to support bottom-up, private sector-led initiatives to drive investment and jobs growth in the North, and across Lebanon, despite the weak macro environment and stalled national reforms

The report was presented today to a large gathering of government officials, private sector representatives, civil society members, academicians, researchers and youth, at the Chamber of Commerce, Industry and Agriculture of Tripoli and the North, under the auspices of their Excellencies Minister of Economy and Trade and Minister of Labor.

The labor market provides only one salaried job for every five working age adults in North Lebanon. While the labor force in the North is amongst the largest in the country, the participation rate of the workforce is amongst the lowest. This high inactivity is driven by the very low participation rates amongst women and youth in the labor market; only one in five working age women participate in the labor market, compared to 73 percent among working age men. Moreover, the vast majority of those who are working in North Lebanon are trapped in poor quality, low productivity jobs. The crux of the problem lies on the demand side: the private sector fails to create enough good productive jobs, in part due to low productivity and weak integration into regional and global markets.

"The North of Lebanon faces structural and socio-economic challenges. Political, community, and social insecurity have impeded investment, curtailed growth and job creation, and fostered out-migration of talent. The influx of large numbers of Syrian refugees has further exacerbated employment challenges, particularly for the poorest", said Saroj Kumar Jha, World Bank Mashreq Regional Director. "Increasing private sector investment and ensuring the right skills can be found in the labor market is the challenge for this region. This challenge must be taken up with a keen sense of what is possible and where the regional economy can advance over the short, medium and long term. These also require innovative solutions for greater private sector risk-taking and investment in fragile settings, that create economic opportunities for everyone".

The North Lebanon market is dominated by small and micro businesses with limited job creation capacity and growth potential. Future employment creation in the absence of new investment is highly constrained. In the absence of national level policy reforms, selective short and longer term interventions can help address these constraints. Over the shorter term, this entails a focus on Small and Medium Enterprises (SMEs) and self-employment to improve market performance and develop new market niches, taking as given the current policy and infrastructure environment. Over the longer term, an increased focus on higher potential value chains – through selective reforms and supporting investments – can mobilize new private investment.

Interventions to support the development of competitive value chains should be complemented with efforts to bring labor force supply closer to private sector needs. This means raising skills levels (soft and technical) and making them more relevant to the evolving demands of the private sector. It also requires improving matching between workers and jobs through more effective registration and profiling of the labor force and improved information flows between public employment and training institutions and the private sector.

"The Ministry of Labor is fully committed to implement an integrated skills development and employment services program in coordination with the private sector, with a focus on youth and women, to help boost the labor market with the much-needed skilled workers" said Mohammad Kabbara, Minister of Labor. "Tripoli enjoys several major assets: an international fair, a port, a refinery, an airport, and the forthcoming establishment of the Special Economic Zone, which is expected to be a major driver of the economy in the North and the rest of Lebanon".

Along the way, it will be critical to strengthen the competitive position of North Lebanon by building on the new infrastructure investments already underway and looking to the region's other key economic assets. This involves targeted investments in high priority projects, including: developing the Port of Tripoli as a leading container terminal for regional shipping; extending transport infrastructure to improve connectivity between Tripoli, the rest of the country and the other economies in the region; establishing the Tripoli Special Economic Zone to support a competitive, regional manufacturing and logistics sector; upgrading urban infrastructure and municipal capacity to promote improved "livability" for residents of Tripoli; and positioning Tripoli and the North region to support post-conflict reconstruction in Syria.

"Analytical reports, accompanied by further dialogue with the key public and private sector professionals, can serve to inform the design of much needed development programs", said Raed Khoury, Minister of Economy and Trade. "We are happy to see that this initial value chain analysis will form the basis for a jobs-focused program of support for North Lebanon, that can also be replicated in other high-priority lagging regions and have a significant positive impact on the national economy scale."

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