The Lebanese economy has traditionally focused on non-productive services' sub-sectors, such as real estate and banking. However, these occupations do not generate enough jobs to meet the huge demand in the labour market. In addition, during the last decade there has been a substantial economic regression. This, paired with the absence of skills anticipation and matching mechanisms, weak public employment services, and issues related to VET governance, financing and provision, creates a high risk of skills falling out of step with future changes in the job market.

The country's limited institutional capacity and resources, together with a serious lack of data, are issues which not only hamper policy making and reform but also impact on the question of ownership, and thus the continuity and sustainability of any national or donor-led reform initiatives. In the skills development sector, this situation has reinforced inequity in education and the labour market, and is one of the main reasons for the long-lasting and significant disconnection of the VET sector from labour market needs.

Lebanon's total population has increased by 45% over the last decade, rising from 4.7 million in 2008 to over 6.8 million in 2018[10] UN Department of Economic and Social Affairs Population Division, UNDESA World Population Prospects Database.
. The influx of an estimated 1.5 million Syrian refugees since 2011, in addition to the presence of Palestinian refugees, has placed a great strain on public finances, infrastructure and service delivery. On the other hand, the country is experiencing a high level of emigration of its labour force (generally the young and educated). This demographic transition has exerted considerable pressure on the labour market and the education sector, to the detriment of their outcomes.

The main priorities identified in the Lebanon Voluntary National Review of Sustainable Development Goals (2018) are poverty eradication, upgrading public sector education, reducing unemployment (especially amongst young people), enhancing the critical infrastructures, conserving natural resources, and addressing the impacts of the Syrian crisis on sustainable development. Education and training institutions are reporting to this monitoring exercise although they are facing significant development challenges.

These four human capital issues are described in Chapter 2 and the analysis of the related policy answers, gaps and recommendations are dealt with in Chapter 3. While this report focuses on the first two human capital issues, the recommendations cover, by extension, the other two, broader, issues (demographic transformation and sustainable development).

It is widely recognised that centralised governance is one the main factors that hampers the effectiveness of VET in Lebanon. This issue covers the national, sectoral and local levels and impedes both VET's effectiveness and its attractiveness to learners and employers. The current recommendation proposes a comprehensive and coherent approach to addressing this urgent issue by fostering the conditions conducive to a multi-level and multi-stakeholder governance ecosystem that can steer skills development to respond effectively to the country's socio-economic needs.

National: Reactivate and operationalise the Higher Council for VET and foster all kinds of PPP;

Sectoral: Set up skills councils in priority/growing sectors;

Local: Reinforce schools' autonomy and integration with their environment.

The Torino Process National Report (ETF, 2020) and other studies have pointed to the problems of VET provision in the country, discussed in section 3.1.1. These issues call for a revision of the uneven distribution of students, teachers and schools, updating the curricula, further professional development for teachers, with a revision of their status and mode of recruitment, the upgrading of infrastructure and equipment, and the expansion of career guidance services, etc.

The National Strategic Framework also specifies detailed actions that should be undertaken to improve VET provision. The current recommendations have multiple aspects and focus on the main provision issues that need to be tackled as a matter of priority to achieve better responsiveness to labour market needs.

Improve the teaching and learning environment for effective VET provision;

Mainstreaming key competences with a focus on digitalisation and entrepreneurship.

The issues of education, training and employment are currently considered as part of a single process, the school-to-work transition, defined typically as the period between the end of compulsory schooling and the attainment of full-time, stable employment. In the case of Lebanon, this transition can be painful for VET graduates due to the gaps between education and training supply and labour market needs, among other issues. Professional mobility and work-to-work transition is also difficult due to limited or inadequate policies and the weak institutional capacity for reform, notably in the areas of labour market measures, career guidance services, work-based learning and apprenticeship, etc.

Review and consolidate a comprehensive and more effective career guidance system;

Reinforce the role of the National Employment Office (NEO) to fully accomplish its role of labour market intermediation;

Regulate and extend work-based learning for more effective and faster transition into employment.

In the effort to bridge the gap of skills mismatch and improve employability, the completion and institutionalisation of previous endeavours to develop frameworks, such us Quality Assurance (QA), the National Qualifications Framework (NQF) or the Validation of Non Formal and Informal Learning (VNFIL) should be considered. These frameworks, if implemented, would also confer benefits on vulnerable populations such us migrants, NEETs (people aged 15–24 who are Not in Education, Employment or Training), women and those with a low level of education.

Develop a quality assurance framework (QAF);

Complete and formalise the National Qualifications Framework (NQF);

Set up a system for the validation of non-formal and informal learning (VNFIL).

The second series of recommendations focuses on policy-making capacity and the reinforcement of institutional arrangements and organisational settings in order to ensure more policy coherence, consolidation and ownership. The momentum created around the national VET strategic framework and the prospective political transition could present an opportunity to put the agreed measures into action, avoiding past mistakes and political constraints. The National Strategic Framework (NSF) defines the mission of VET reform in the following terms: '... The VET system in Lebanon will be tripartite-led, fit for purpose and inclusive. It will provide competencies and life skills to meet the skills demand in the labour market, forming part of a larger education system with multiple pathways to encourage lifelong learning.'

An efficient and coherent LMIS system has to rely on the institutional arrangements and procedures that coordinate the collection, processing, storage, retrieval and dissemination of labour market information. As there is no general blueprint for a single and effective LMIS, a first step would be to define the aim, scope (education, employment, economy, etc.) and level (national, regional, sectoral) of the most-needed analysis. The VET system is an important part of an LMIS and should build its own information system. The main purpose of data collection and analysis should be to provide labour market actors with the necessary information to bridge skills gaps and any labour/job market mismatches in general, but it also needs to support career guidance services and adapt ALMPs to skills requirements in specific sectors. This requires a substantial reinforcement of capacity building and high levels of cooperation with the private sector, CAS, the Ministry of Labour (MoL) and the NEO.

A shared governance approach to addressing policy priorities should also cover VET financing and the diversification of its sources. The ETF recommends initiating this reform through a review of the current budget formation and allocation procedure and VET providers' efficiency in providing the right skills. This should lead to:

Developing an agreed costing methodology to ensure accurate and sustainable budget formation and execution;

Diversifying funding sources and increasing the share of non-state resources to implement the current ambitious strategy and engage the private sector in practical ways.

Moving towards a more performance-oriented approach to resource allocation. Currently, the budget is determined by a simple historic incremental approach.

Give more management and financial autonomy to VET schools so that they can respond to local labour market needs and promote innovation.

Policy planning should take into account the various sources of funding, both public and private (including private VET providers and donors' contributions), in order to bridge the current gap between strategies and actual achievements, while ensuring greater visibility and transparency and making the policy more credible.

This is a generic and important recommendation for policy makers to ensure greater relevance, coherence and sustainability in the field of skills development in Lebanon. Policy makers should gradually take the helm in terms of VET planning, implementation and monitoring. This will require organisational and capacity review and reinforcement.

Full ownership would require a broader base of stakeholder commitment and collaboration.

Policy uptake and ownership means also having the financial capacity and autonomy to support reforms.

A monitoring and evaluation system needs to be established to assess the progress of policy implementation.

Lebanon remains in need of extensive support from the international community because of its limited capacity and resources, as well as its substantial deficits in the area of human capital development and use. Current and upcoming development and aid support should clearly anticipate the need for appropriation activities as well as an exit strategy so that the outcomes can be sustained.

Emigration is a key aspect of Lebanese history and its present socio-economic situation, but its potential has not been sufficiently exploited in relation to local development and job creation. Further investment should be dedicated to supporting Lebanese emigrants, including those in the pre-departure stage, the diaspora and returnees. Investment, particularly in promoting the employability of emigrants, can positively impact on the development of both the receiving countries and Lebanon, yielding economic returns that could potentially be much higher than the initial investment (ETF, 2017b). Incentives and new schemes for remittances could also be created to redirect such sums away from consumption and towards productive activities that could generate jobs and increase the amount of migrant inward investment, which has decreased from 18% of GDP in 2010 to 12.5% in 2019[11] World Bank estimates based on IMF balance of payments data and OECD GDP estimates.
.

This calls for more engagement on the part of the international private sector, in particular the Lebanese diaspora, to generate social, cultural and economic benefits in Lebanon. This could include activities such as:

Mapping the profile of Lebanese emigrants (including returnees);

Exchange programmes for Lebanese nationals studying and working abroad to attract them back to the country (even temporarily);

Business management and entrepreneurship training for returnees;

Micro-credit schemes;

Remittance schemes for investing in productive activities in Lebanon, including components such as skills development[12] Recommendations of the ETF, Migrant Support Measures from an Employment and Skills Perspective (MISMES): Lebanon report, September 2017.
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The private sector is a strong asset in Lebanon that should be given more space in national policy making and socio-economic development and monitoring. If it were fully involved in the policy cycle, as proposed by almost all the recommendations of this analysis, the private sector could play a more prominent role in improving employability and reducing skills gaps and mismatch at both the national and international (see R.2.8) levels. This involvement could range from contributing to VET governance and financing to the amelioration and reinforcement of skills provision and monitoring.

The NRF confirms the absence of regulations related to lifelong learning (LLL) and the detachment of VET authorities and public providers from adult education and training (AET). This has obvious and negative consequences for human capital development and utilisation, such as exclusion, unemployment and skills mismatch, and affects economic productivity and competitiveness in general. In addition, the situation of young people remains problematic in Lebanon, with persistently high numbers of NEETs and refugees. In order to moderate this negative impact, the ETF recommends that the authorities should urgently develop a lifelong learning policy aimed at improving knowledge, skills and/or qualifications for personal, social and/or professional reasons. Lifelong learning is a conceptual and policy approach that optimises formal, non-formal and informal learning on a continuous basis throughout the life course.