As 17 October marks the International Day for the Eradication of Poverty, EuroMed Rights talked to Nabil Abdo, Middle East and North Africa Senior Policy Advisor at Oxfam, to get an in-depth look into the social and economic issues Lebanon faces.
A recent Oxfam report, regarding Lebanon, reads: “A huge increase in inequality is very likely. More austerity following this crisis will mean more uprisings, more inequality, and more conflict.” What is your reading of the development of the socio-economic situation in Lebanon in the months/years to come?
Nabil Abdo: Currently, there are no signs of positive developments in the country in the period to come. On the contrary, the situation is worsening by the day because of the health and economic crisis coupled with the inaction of those in power. Prices of goods have risen significantly. The cost of vegetables has increased 56%, eggs 96% and meat 167% since this time last year.
Every day, more people are becoming poorer and the foreign reserves that enable the country to import and to subsidise basic goods are depleting. This means that the prices of bread, gasoline, electricity and medicine, which were unchanged due to subsidies, will also skyrocket and deeply worsen the situation in the country.
What needs to happen to tackle Lebanon’s social justice crisis?
Deep and structural changes need to happen in Lebanon. This starts with restructuring the tax system towards more progressivity, especially instating a net wealth tax. Those who benefited from the economic policies that led to the crisis need to take on the largest burden of reforms. Oxfam found that if Lebanon had introduced a tax on net wealth at a rate of just 2% in 2010, by now it would have raised USD 12.8bn. This is more than enough to cover the loans pledged at the 2018 CEDRE [Conference for Economic Development and Reform through Enterprises] funding conference held in Paris. This is equivalent to 82% of its total foreign debt service payments since 2011. In addition to that, progressive taxation (instead of austerity and VAT) can generate revenues to ramp up social spending especially in terms of social protection and health.
There should also be an immediate restructuring negotiation between Lebanon and its private creditors, in a collective effort to bring the country’s debt back to a sustainable level. Private creditors should also pay their fair share towards the reform plan, as they have benefited from the now crumbling economic model. More should also be done in terms of labour rights, specifically granting workers the right to freedom of association in both the public and private sectors without needing a prior permit. This would be an important step to allow workers to organise themselves and advocate for better policies, particularly policies that help in formalising their employment.
However, the issue of transparency and accountability should not be forgotten and should be at the heart of any economic recovery by making sure that mechanisms of accountability, monitoring and overall citizen engagement are established. In this regard the international community has a responsibility to avoid perpetrating the same practices as before. Not only should the international community stop turning a blind eye to the lack of transparency and corruption but should also encourage the authorities to enact just policies around progressive taxation, universal public services and decent work instead of encouraging regressive policies of the past.
What will happen to the social movements that have marked Lebanon these past months and even years? Can civil society be a part of the solution?
Social movements will always shape Lebanon’s present and future, despite restrictions on civic space. For a recovery to be just, meaningful and useful to lay down the basis for a sustainable economy, the participation of social movements, organised labour, and civil society organisations is key. Otherwise there would be a replication of the past policies and the crumbling system.
Background information
Like any other parts of the world, people living in the MENA region are struggling to escape poverty. According to WorldBank data, as of 2018, an estimated 18.6 million people in the region were living on less than $1.90 per day. An additional 8.3 million people in the Arab region are expected to fall into poverty as a result of the pandemic. In the region, the Lebanese population has been hit by an increase in poverty and precarity more than any other society over the last months. Extreme poverty in Lebanon has tripled from 8% in 2019 to 23% in 2020. According to UN estimates, following the explosion in the port of Beirut on 4 August 2020, more than 55% of the population is “trapped in poverty and struggling for bare necessities”. This is almost double last year’s rate.