With the unemployment rate among youth reaching 19%, waves of Lebanese graduates continue to leave their homes for more promising jobs overseas, especially the UAE. With unemployment and underemployment driving this trend, Lebanon must find a way to increase its employment opportunities to avoid a national brain-drain as the best and brightest look for better opportunities outside the country.
A recent report by the Consultation and Research Institute for the Friedrich Ebert Foundation criticized the Lebanese economy's heavy reliance on the service sector for its inability to create major opportunities for employment. The report estimated that 80% of Lebanese GDP is led by the service sector, the vast majority of which is small firms employing fewer than five employees a piece. These small businesses have limited growth capacity and a limited ability to provide employment opportunities. As Tom Friedman and others have pointed out recently, it is not enough to have jobs - there must be company growth to boost an economy. Lebanon's youth unemployment conundrum is further complicated by findings in the report indicating that improving the education system had a limited impact on employment.
With a growing youth population in the Syria-Lebanon-Jordan region (over 50% of this population is below the age of 24), Lebanese authorities need to aggressively pursue job growth. One solution proposed by Lebanese economic adviser Toufic Gaspard, is for the public sector to prioritize the role of manufacturing in order to spur job creation. To enable this, the Lebanese government needs to pass a series of economic reforms that would establish incentives for investment in the manufacturing sector. By creating a favorable environment for manufacturing, the private sector will more easily enter the market and play its role in expanding these job opportunities.
Alongside investments in manufacturing, the government should provide greater support to the tourism sector and begin addressing youth unemployment as a national issue as opposed to leaving this issue to the private sector alone. This is no easy task for Lebanese government. This game plan is hindered by lack of national unity that fosters increasing political indecision as well as a staggering $53.9 billion national debt, which effectively depletes any additional finances the government would draw upon for incentives and investment.
Another factor significant to Lebanon's unemployment puzzle is the informal economy. The report estimated that nearly 67% of the labor force was informal employment, which compels Lebanese workers to accept lower-paying unregulated jobs and locks them into a cycle of poverty.
Despite this increasingly difficult economy, the US has a unique opportunity to create tangible results in the Middle East that will improve economic stability and potentially political stability and security by working toward employment opportunities in this Lebanon and the region. The US State Department is already assisting countries in transition in the region, as testified by Assistant Secretary of State Jeffrey Feltman at the House Foreign Affairs Committee yesterday. Feltman said the Bureau of Near Eastern Affairs has "reconceptualized" its strategy to promote political and economic reform.. recognizing the importance of economic development and growth.
By establishing programs linking entrepreneurs and businesses, and establishing partnership models that leverage public and private sector resources, the United States can play an influential role in helping to spur economic growth in the Lebanon and the Middle East. Specifically, programs that link Lebanese and American businesses can tap into an educated youth demographic that will create economic opportunities for both countries while also creating positive, non-political, relationships in the region. Government-level reforms in Lebanon are necessary to turning the tide of underemployment and unemployment in Lebanon, but US-led measures to create greater economic opportunity can stem regional and domestic conflict while also allowing Lebanon to retain its talented youth and graduates.