Lebanon Jobs Pilot April 18, 2016

Lebanon: The highest displaced per capita country in the world Newcomers represent over a quarter of the Lebanese pre-crisis population (around 4.2 million), leading to the highest refugee per capita ratio in the world

9/13/2018 5.9 m population (4.2 m 5 years ago) 1.5 m displaced Syrians (1.1 registered) 1.5 m vulnerable Lebanese 320,000 Palestinian refugees 56% of population vulnerable (27% 5 years ago) Since the onset of the Syrian crisis in February 2011, around 1.1 million Syrians have crossed the border between Lebanon and Syria and are officially registered as refugees Refugee influx started in April 2011, small numbers Between January 2012 and July 2014, almost 1.2 million people arrived Official numbers have declined slightly since GOL introduced new entry requirements in January 2015, limiting entry of Syrians to 9 categories, with very limited options for humanitarian entry of refugees Currently 1.07 million registered – estimates of non-registered vary, maybe between 100,000 and 200,000 UNHCR registration – iris scans, renewals every 12 to 18 months Some may be leaving either to Syria, or onward migration to Europe, majority of departures before the new Turkish visa requirements were of Syrians coming from Syria and transiting directly through Lebanon in 24 hours No camps, refugees live all over the country, in over 1,600 locations Almost 20% live in informal settlements 50% live in substandard shelter – informal settlements, garages, basement, unfinished buildings

Brief context 25% of the Lebanese pre-crisis population Deeply exacerbated local pre-crisis jobs challenge Weak and insufficient job creation  main causes of high unemployment rates Lebanese labor force is expected to increase by around 35% Competition for low-quality, low-skilled jobs will likely become intense  contributing to higher levels of unemployment and poverty 92% of refugees are working Crisis impacting Lebanon’s own development prospect Unprecedented supply side shock  innovative solutions and initiatives Measures needed not only to manage and mitigate supply side outcomes but also, critically, to stimulate the demand for jobs  GOL proposing a flagship program to trigger private sector business expansion and create formal jobs for both Lebanese workers and Syrian refugees. First piloted to assess its credibility, effectiveness and impact Embedded impact evaluation design . Deeply exacerbating local Lebanese jobs challenge which the country was facing even before the Syrian conflict started. Weak and insufficient private sector job creation is one of the main causes of persistently high unemployment rates, estimated at 11% in 2009 (especially amongst youth at 34 percent), and as high as 20% by the end of 2014. Hugh supply shock happening when lebanon faces difficuluties in : Creating jobs Attracting investment While not all of Syrian refugees are of working age or active in the labor force, they face an immediate struggle for their livelihood and pressures to generate income, and are thus more likely to enter the labor market than either the Lebanese host population or than Syrians in their home market. The 2013 WB study for example, estimated that women of working age coming to Lebanon are four times more likely to enter the labor market - while only 12% of women aged 24-34 participated in the labor market in Syria, 47% of the refugees do. It is estimated that the Lebanese labor force is expected to increase by around 35%, with major changes taking place among women and youth. Competition between Lebanese and Syrian workers for low-quality, low-skilled jobs will likely become intense, contributing to higher levels of unemployment and poverty among the host population. 92% of refugees are working and indications are that their LFPR is higher than Lebanese

Lebanon Pilot: Capital for Jobs (C4J) SPECIAL SAVINGS SCHEME FOR SYRIAN CONNECTING WORKERS TO JOBS CREATING JOBS Many programs have supported SMEs to promote growth, competitiveness, productivity, but here the support is focused on creating jobs. But in providing those services some might subsidies labor for capital but we do not want that, we want them to create jobs for the services they receive. Services are provided with a conditionality (such as a 3 years time period) and we will be monitoring them to make sure that they create jobs. We could for example provide some portion of the grant at the end, we could provide penalizes for those who do not meet the requirements (penalties, etc). This will all depend on the design. Demand side interventions to promote investments in MSMEs conditional on job creation Supply side interventions to connect Lebanese and Syrians to jobs A special savings scheme for Syrian workers employed through the program that can only be cashed out once they leave the country Counseling Access to markets Identification, registration Identification, registration Wage subsidy Matching grants Interventions (employment services) Financial/non-financial services Intermediation, job search assistance Managerial practices Delivery mechanism Delivery mechanism Training Advisory services

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