28.5 percent of Lebanese live in poverty - study

from The Daily Star

Report notes regional disparities

BEIRUT: An international study estimates that the poverty ratio in Lebanon is around 28.5 of the population, accounting for almost a million Lebanese, with 8 percent of the population, or almost 300,000 individuals, living under conditions of extreme poverty. These figures were disclosed by the International Poverty Center (IPC), an institute jointly supported by the Brazilian Institute for Applied Economic Research (IPEA) and the Bureau for Development Policy at the United Nations Development Program.

"This means that the ratio of the nonpoor in Lebanon is at 71.5 percent. This level compares well to that prevailing around 10 years ago in 1997, as national accounts statistics suggest that the growth in real per-capita private consumption was at a notable average of 2.75 percent annually, since 1997," said the study, which was published by Bank Audi's Lebanon Weekly Monitor on Tuesday.

But the IPC stressed that the distribution of this growth in consumption across different regions within Lebanon was again uneven.

"It was the highest in Beirut, at around 5 percent annually, which is not surprising, considering the widespread investment and job creation that took place in the capital after 1997. Also, a higher-than-average growth rate was observed in the South and Bekaa, as it reached 4 percent annually. On the other hand, Mount Lebanon and the North saw trivial growth in consumption, which translated into a relative decline in their mean per-capita expenditure compared to the overall average," the IPC said.

In parallel, the report sheds light on key elements to form a poverty-reduction strategy in Lebanon. It suggests the country is fully capable of meeting the Millennium Development Goals (MDG) targets of halving the proportion of people living in extreme poverty by 2015. It can also make considerable progress in reducing inter-regional disparities.

According to the latest available figures, the study suggests that average per-capita annual nominal consumption reached LL3,975,000 in 2004-2005.

"However, when taking regional price differentials into consideration, this annual per-capita real consumption is found to be 1 percent lower," the report said.

The study noted significant disparities in consumption in different areas of the country. In fact, it concludes that most of the inequality in Lebanon arises from regional inequalities.

"While Beirut has the highest mean per-capita consumption, which is more than 1.5 times the national average, the North has the lowest of around three-quarters the national average," the report said.

The report also highlighted discrepancies in the distribution of expenditure within different income groups.

"The poorest 20 percent account for only 7 percent of overall consumption in the country, while the richest 20 percent account for 43 percent. Still, this inequality is similar to that in other middle-income countries," the study said.

The study said that the poor are heavily concentrated among unemployed and unskilled workers, who in turn, are concentrated in the construction and agriculture sectors.

"Those two sectors were found to employ around 38 percent of all the poor. Thus, there should be an implementation of an economic agenda that promotes sustained growth, and thereby increased employment, in such sectors," the report recommended.

It added that the second pillar, which involves expanding educational opportunities, targets the unskilled workers.

"Improving the educational level of the poor enables them to have better access to social and economic opportunities. Moreover, it raises their productivity, which induces higher economic growth for Lebanon," the report said.

The study said that the third element of the poverty reduction strategy should be promoting a more balanced regional development.

The report clearly indicates that some regions, such as the North, lag behind in development and therefore more efforts should be exerted to create job opportunities and to promote further education in such regions.