This ETF assessment provides an analysis based on the outcomes of the National Torino Process report of Lebanon (ETF, 2020) and other secondary sources from national and international literature. The national report was compiled under the supervision of the Ministry of Education and Higher Education (MEHE) and endorsed by the national stakeholders. A written consultation was organised in June 2020, involving Lebanese stakeholders and international donors and organisations active in VET in Lebanon.

The assessment summarises the main challenges for the development and use of human capital in the country and discusses how education (in particular VET) and labour market policies in the country are addressing them and can contribute to their resolution. The assessment process generated a high level of interest from national stakeholders as well as the international community active in skills development and employment. This augurs well for a high level of policy uptake and ownership of this analysis and related recommendations, notably potentially providing an impetus to the implementation of the National Strategic Framework and the post-2020 programming of the EU and other donors.

Within the regional policy dialogue, the findings and recommendations of the ETF Torino Process assessment provide elements to inform future regional initiatives within the Southern and Eastern Mediterranean area, as well as the ongoing discussions on post-2020 programming. The findings of this report will also feed into the current dialogue, led by the Union for the Mediterranean and the European Commission, on monitoring the progress of the 2019 Ministerial Declaration on Employment and Labour that underlines a range of issues, including the importance of reforming education and training systems in a way that responds to the challenges presented by ensuring employment, employability, and decent work[13] For the importance of investment in education, higher education and training systems, including vocational education and training (VET), as well as lifelong reskilling and upskilling of workers to prepare them for constant changes in the world of work, see Ministerial Declaration on Employment and Labour, April 2019, p. 4.
. A cross-country report will consolidate all the Southern and Eastern Mediterranean Torino process assessments' outcomes and will contribute to the monitoring and evaluation framework intended to be developed as a concrete output of the Declaration[14] The labour Ministers asked the Union for the Mediterranean (UfM) Secretariat to coordinate, with the contribution of volunteering countries, the setting up of a framework for national monitoring processes, notably by organising meetings, providing relevant information, contact making and networking, as well as cooperating with countries' stakeholders and international organisations. The Ministers invited the European Commission and the relevant EU agencies, in particular the European Training Foundation, to provide relevant expertise to this work. See the Ministerial Declaration on Employment and Labour, paragraph 29, April 2019.
.

Given the very limited official and comparable data, the primary source of this assessment analysis is the Torino Process national report, using a standardised questionnaire (National Reporting Framework – NRF) and the related working groups' consultations, including national and international stakeholders, organised between July 2019 and February 2020. The secondary sources of information drawn upon are international data and publications (see the References). At the time the current report was being finalised, the Central Administration of Statistics (CAS) made available the preliminary key findings of the Labour Force and Households' Living Conditions Survey (LFHLCS; conducted in 2018/2019 with the support of the ILO and the EU Delegation) on the labour market situation. These statistics have been incorporated here to complement the analysis. However, the COVID-19 health crisis and its possible consequences for the socio-economic context, labour market perspectives and key HCD issues are not included in the analysis. The impact of the health crisis will certainly make the current socio-economic situation even worse, while new opportunities could emerge to secure and accelerate system change.

The assessment process included an extensive phase of desk research based on responses to a standardised questionnaire (the NRF), analysis of other relevant studies, and the preparation of an issue paper containing an overview of themes to be discussed in the present report, which were then finalised in consultation with the ETF country and thematic teams responsible for Lebanon.

As with other ETF assessments, this paper is not meant to be exhaustive. The national report for Lebanon covers a broad selection of problems around human capital development and use, while the focus here is on the challenges that the ETF recommends addressing as a matter of priority.

Lebanon is characterised by its unique political structure, which was put in place after independence in 1943 to guarantee a balance of powers among the different religious groups. Although this special arrangement has guaranteed a certain general stability over the years, the balance remains very delicate and the current tensions in the region place the country's security and socio-political stability at risk. In addition, the need to always guarantee the representation and involvement of all religious groups at all levels slows down or even blocks the decision-making process. The abolition of this sectarian governance system is the main demand of the ongoing protests.

Lebanese economic growth has decreased significantly in the last 10 years. The country's GDP fell from an average of 9.2% in 2007–2010 to 0.2% in 2018 (2.0% in 2011–2014, 0.7% in 2015–2018)[15] World Bank and OECD National Accounts data.
. Moreover, the precarious context is exacerbated by a high and growing public debt[16] McKinsey & Company, Lebanon Economic Vision Report, 2018
, coupled with a significant decrease in foreign direct investment inflows[17] International Monetary Fund, Balance of Payment Database.
.

Figure 1: GDP Annual % Growth

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Source: World Bank and OECD National Accounts data.

Nevertheless, Lebanon's economy remains resilient despite periods of political, demographic and socio-economic turbulence. The government favours a strong role for the private sector through a free-market economy and the country has a strong laissez-faire commercial tradition. There are no restrictions on the movement of capital and goods by residents or non‐residents, including on firms' entry or exit, or on access to foreign exchange, which makes Lebanon a supportive system for private sector development. In addition to the free-market and liberal financial environment, the population is well educated and possesses a strong entrepreneurial drive, which has helped the economy to weather the frequent political upheavals.

Lebanon is an upper-middle-income economy with one of the highest rates of GDP per capita in the region ($13 058 GDP per capita in 2018[18] World Bank, WDI Database.
). At the same time, one-third of its population is considered poor[19] United Nations Economic and Social Commission for Western Asia (ESCWA), 21 Sept. 2018.
, living below the poverty line on less than $3.84 a day[20] UNRWA, Protection in Lebanon, Update 2019: https://www.unrwa.org/activity/protection-lebanon
, that is a situation which disproportionately affects immigrant groups: 69% of the displaced Syrians; 65% of the Palestinians and 89% of Syrian Palestinians. Regional/territorial disparities are also a striking feature, with most of the poor living in areas outside of Beirut and Mount Lebanon. These regions are significantly lagging behind the national average, with much lower labour force participation, higher unemployment, and greater reliance on self-employment.

The conflict in Syria has massively contributed to this situation by adding 1.5 million registered Syrians to the existing population of 490 000 Palestinian[21] UNRWA, United Nations Relief and Works Agency for Palestine Refugees 2019.
refugees, making Lebanon the country with the highest number of refugees per capita in the world, at an estimated 30% of the population[22] UN Population Division (2019), UNHCR (2018), UNRWA (2019).
(see Figure 8).

The sectoral gross value added expressed as a percentage of GDP highlights the vital and increasing role of the banking and service sector in the Lebanese economy (75% of GDP in 2018), to the detriment of both industry and agriculture, which have both seen a steady decrease in value over the last decade, and in 2018 comprised only 14% and 3% of GDP respectively[23] World Bank and OECD National Accounts data.
.

Figure 2: Sector's Gross Value Added as % of GDP

Image

Source: World Bank and OECD National Accounts data.

The tourism, agriculture and health sectors have potential for growth, which could lead to the creation of hundreds of jobs if appropriate policy measures are designed and implemented, notably in the areas of enterprise growth and support for start-ups. The oil and gas sector is a promising sector for development in Lebanon. Projections show a high reserve of gas in the offshore area, and this is expected to create about 5 000 new jobs, mainly for medium-skilled employees (ETF, 2015a).

The labour market is characterised by low employment rates (43.3%), a limited overall labour force participation rate (48.8%), especially for young people aged 15–24 (39.2%) and women (29.3%, as opposed to 70.4% for men), as well as an increasingly large informal sector (55% of total employment) (CAS, 2019), a high influx of foreign workers and refugees, and a significant number of skilled Lebanese workers finding employment abroad.^. This situation is inflated by poor or obsolete policies addressing the country's socio-economic issues, a lack of mechanisms to anticipate and bridge any skills gaps and mismatch, weak public employment services and active labour market policies (ALMPs), and the absence of an LMIS.

Traditionally, Lebanon had an advanced education structure, and well‐trained technicians and engineers. Beirut used to serve as an education centre for the region. However, a substantial part of this human capital was lost during the 1975–1990 conflict, and the educational system and infrastructure suffered significant damage and lack of investment. However, in spite of such turmoil, the national educational system has survived and is still highly valued by the Lebanese. The Constitution attributes a key role to education in the country's socio-economic development, stating that '…the even development among regions on the educational, social, and economic levels shall be a basic pillar of the unity of the state and the stability of the system'.

One distinctive characteristic of the education and training system in Lebanon is the high proportion of private providers. The share of private enrolment in general education is relatively high and always above 50% (see Figure 3). Private education also accounts for 54% of the total number of schools, while in higher education there is only one public university and 47 private ones.

Figure 3: Public vs. Private Schools Enrolment, 2018

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Source: UNESCO, UIS Database.

The VET sector follows the same trend, with roughly 60% of its schools privately run[24] General Directorate for Vocational and Technical Education and Brite Indicators and Trends, 2019.
. There are two types of VET private providers, non-profit and for-profit. The non-profit private VET schools are mainly run by charitable and social work NGOs. These NGOs are mostly community-based, with strong regional and religious ties. NGOs have been the developers of this sector since the 1950s, even before the creation of the Directorate General for VTE in Lebanon; DGVTE. The larger for-profit private VET schools are concentrated around the major cities and population centres, and offer highly competitive training. Some belong to European or North American networks and provide internationally recognised degrees and certificates guaranteed by accredited quality-control systems and credentials.

Figure 4: VET Institutions and VET Providers

Image

Source: General Directorate for Vocational and Technical Education and Brite Indicators and Trends (2019).

Thus, private spending on education is high and far exceeds public spending. Typically, household spending on education surpasses 10% of the household's total expenditure. This compensates for low government spending, but is contingent on families' ability to pay. The country's rising poverty rates could explain the increase in public VET provision at the expense of private schools over the past decade, as shown in Figure 4.

Conversely, public expenditure on education is not only low, but is also highly dependent on external donor funding (BankMed, 2014). While general and higher education have been the focus of attention and regarded as a priority, VET has remained historically isolated from the other parts of the education system and attracts much lower student numbers: only 15.5% of all secondary education pupils were enrolled in a vocational programme in 2018[25] UNESCO, UIS Database.
.

Figure 5: Secondary Vocational Education Students: Total, Lower and Upper

Image

Source: UNESCO, UIS Database.

VET in Lebanon dates back to 1863 when a religious mission established the first vocational school, and since then new technical schools have been built in many regions. In 1993, a dedicated Ministry of Technical and Vocational Education was established for the first time. Following a further reorganization in 2000, all education streams are now administered under a single Ministry of Education and Higher Education, with responsibility for VET being assigned to a Directorate General for Vocational and Technical Education (DGVTE). By law, the public administration is supported by a Higher Council for VET, headed by the Minister of Education and Higher Education with representatives from other ministries, public administration bodies, and the private sectors ,as well as public VET schools, private VET schools and the Centre for Educational Research and Development (CERD). Until recently, this Council has not been operational.

Currently, the VET system remains highly centralised, with little autonomy given to the schools or the organisations involved in shaping the system. The main challenges to the effectiveness and development of the VET sector in Lebanon are its governance, financing and institutional arrangements, as well as coordination of the relevant actors.

The government's recent economic vision, developed through the McKinsey study carried out in 2018 (Middle East Consultancy, 2018), aims at increasing economic growth and reducing fiscal deficit and unemployment through 'quick wins', such as developing an investment banking hub, establishing a construction zone for pre-fabricated housing, and providing support for tourism and industrial zones as well as agriculture, through legalising cannabis and investing in the pharmaceutical sector.

In a parallel process, the VET sector for the first time endorsed a National Strategic Framework for TVET (NSF 2018–2022) through a wide range of consultations with key VET stakeholders led by UNICEF-ILO. These sessions involved an extensive array of stakeholders, including the Ministry of Education and Higher Education (MEHE), the Ministry of Labour (MOL), the Ministry of Agriculture (MOA), the Ministry of Social Affairs (MOSA), the National Employment Office (NEO), the National Vocational Training Centre (NVTC), private sector representatives and NGOs. The NSF is intended to pave the way for a common roadmap and action plans for the VET sector in the coming years.

So far, there has been no specific employment strategy or action plan for employment in Lebanon. The Ministry of Labour has issued a kind of strategy document called 'Decent work country program for Lebanon 2017–2020' that sets three main priorities for employment with the cooperation of social partners and the ILO: (i) improving labour governance; (ii) enhancing productive employment; and (iii) increasing social security provision. The latest developments in the country might result in pushing the national authorities towards a more strategic approach, leading to an employment strategy that is aligned with the relevant education policies and frameworks, including the NSF for VET.

The government has also requested support from the international community, notably to address young people's aspirations and enhance equality of opportunity. Both the Lebanon Crisis Response Plan (LCRP) 2017–2020 and the government's presentations at the Brussels Conferences in April 2017, April 2018 and March 2019 emphasised the importance of broadening educational opportunities for refugees and displaced persons. To this end, the LCRP supports the development of competency-based approach and apprenticeships in non-formal settings. The LCRP also prioritises modernising VET curricula and enhancing linkages with the private sector. In parallel, the government is also developing a youth strategy that includes a vocational training component, targeting 500 000 at-risk young people (UNICEF-ILO, 2018).

In line with these priorities and the Comprehensive Refugee Response Framework, adopted in 2016 as part of the New York Declaration for Refugees and Migrants, the EU Regional Trust Fund in Response to the Syrian Crisis (the 'Madad Fund') pools an increasing share of the EU's aid to Lebanon. The Fund primarily addresses the educational, economic and social needs of Syrian refugees, while also supporting overstretched local communities and their administrations. This important initiative also contributes to Lebanon's investments in education and training, job creation and the integration of jobseekers into the labour market, for both local communities and refugees, especially with regard to vulnerable groups such as women and young people.

Furthermore, education and training are assigned a major role in the realisation of the European Union (EU) association agreement. Currently, an EU-funded project on work-based learning (ProVET) and career guidance is being implemented by GIZ. The EU has also funded the first Labour Force Survey (LFS) in the country, with the support of the ILO and CAS. The preliminary results of this survey were made available at the end of 2019.

The ongoing protests in the country combine political and economic grievances and seek to bring down the country's sectarian political system, which has failed to provide the most basic of services, while economic growth has decreased significantly over the last 10 years (GDP dropped from an average of 9.2% in 2007–2010 to 0.2% in 2018[26] World Bank and OECD National Accounts data
). This report appears at an important point in the political and strategic development of the country and is expected to complement and support these positive trends for reform by setting out priorities for action for national policy makers, the EU and international organisations.