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Multidimensional poverty in Lebanon: A proposed measurement framework, and an assessment of the socioeconomic crisis

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The deteriorating economic activity and domestic political instability witnessed in Lebanon since 2019 have increased pressure on the fixed exchange rate, and caused a devaluation of the country’s currency, higher inflation, a decline in purchasing power, and stalled international remittances. These multiple shocks have significantly increased poverty, especially among the Lebanese population.

The ongoing crises, including the energy and utilities crisis, have resulted in business shutdowns, layoffs and unemployment. Layoffs owing to lockdown measures alone have led to an estimated 43 per cent reduction in earnings, and a 52 per cent reduction in working hours. Moreover, even before these adverse impacts caused by the COVID-19 pandemic, the large influx of Syrian refugees had stretched the State’s capacity, which was already obstructed by inadequate spending on safety nets and low health insurance coverage.

Coping strategies to tackle these overlapping crises have varied. Many, especially middle and lower-middle income households, have resorted to selling domestic assets such as land, cars, gold, and other basic livelihood assets, which also increases their vulnerability to future shocks. A significant drop in school and university enrolment rates was also recorded along with rising drop-out rates.

In sum, few in Lebanon have been spared the consequences of these multiple and overlapping shocks. Nearly all population groups have been exposed to one shock or another via different channels. ESCWA (2020) estimated that more than half of the population in Lebanon is now trapped in poverty.

Given this context, and based on a request from Lebanon in 2019, ESCWA contacted the Lebanese Central Administration of Statistics (CAS) and embarked on a multidimensional poverty assessment using a proposed technical multidimensional poverty index (MPI). The aim is to encourage and contribute to a national discussion on the impact of socioeconomic crises on multidimensional poverty in Lebanon, and thus on remedial policy actions . Accordingly, the present paper has two objectives. Firstly, it explains the conceptual framework used to design the technical MPI. Secondly, the paper fleshes out a methodology used to nowcast data from the 2019 labour force and household living conditions survey (LFHLCS), by simulating the impact of these overlapping shocks between mid-2019 and mid-2021, and reporting a comparative of general results and baseline results at the national and subnational levels.