Tackling inflation and pension reform in Lebanon

April 20, 2016

In Lebanon, the elderly constitute a large share of its population; moreover, Lebanese seniors number the highest in the region. More than half live in poverty and face shortages in health services, water, electricity, and housing. Yet Lebanon’s retirement pension plan excludes many people from basic coverage. Those without formal employment are ineligible, so many street vendors, young people, freelancers, homemakers, and people living with disabilities are denied coverage. These people often resort to family members to meet their needs.

Over a period of five years, IDRC supported the Lebanese Economic Association to provide evidence and training to improve understanding ofthe rising cost of living and better options to care for the elderly.

Project leaders Jad Chaaban and Georgina Manok worked with economic experts and government officials with the national ministries of social affairs, economy and trade, providing training on public finance, statistical techniques for decision-making, and writing policy papers. The team reviewed price statistics for Lebanon, identifying opportunities to update the method used to calculate the cost of living and revise household surveys to reflect consumption patterns. Chaaban and Manok also prepared new indices, on the real estate and food imports prices, to provide more a comprehensive picture of inflation. 

Advancing work on pension reform

Researcher Mounir Rached oversaw work on pension reform, including a demographic analysis of needs, the potential impact on public finances, and opportunities for coverage in rural areas. Rached proposed non-contributory pension schemes for the elderly (over 65 years) who lack other sources of income. This proposal promises to alleviate poverty and promote a better quality of life, while supporting the local economy. Countries with greater inequality and lower income, including Brazil and Mali, have successfully implemented similar reforms. 

The research findings were featured in a media campaign to engage citizens and present solutions to problems such as the cost of living. Following the end of IDRC support, the Lebanese Economic Associationattracted additional funding from other donors to continue efforts toimprove the well-being of the citizens. Investments in training and evidence remain essential if government is to be accountable for better public services and social protection.

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