Bringing Palestinians back into the workforce

A new law entitling Palestinians to specific work could be positive for the Lebanese economy

Employment integration: a political economic threat or a deserved right?

The recent decree issued by the minister of labor, Trad Hamadeh, allowing Palestinians born in Lebanon to work in a range of private sector jobs previously restricted to Lebanese citizens is a positive development in the provision of human rights but one which needs further research, infrastructure and regulation before it is fully implemented.

After 20 years of banning over 70 jobs to Palestinian refugees, work at around 50 unspecified manual and clerical jobs in the country is now allowed. Seventeen professions – such as medicine, engineering and law – remain banned, a ruling no doubt based on the fear of permanent settlement and a subsequent sectarian imbalance. These Palestinian refugees, the majority of whom are now the descendents of the generation that fled their homes after the creation of Israel in 1948, have, as well as being denied employment, no access to property rights or citizenship. The resulting living conditions of the 399,152 registered Palestinian refugees (56% live in 12 squalid camps) are a national disgrace and decision-makers must find an alternative arrangement.

Legal framework: international refugee law

The United Nation’s 1951 Refugee Convention asserts that “contracting states shall accord to refugees lawfully staying in their territory the most favorable treatment accorded to nationals of a foreign country in the same circumstances, as regards the right to engage in wage-earning employment.” The 1967 Protocol states that every receiving state should respect and ensure to whom it chooses to accord temporary protection: “access to employment in cases of prolonged stay.” By February 1997, 134 states had ratified either the UN Refugee Convention or the 1967 Protocol, and 126 had ratified both. However, there are still more than 50 states which have ratified neither the convention nor the protocol. Lebanon is one them.

Before pointing fingers at the state for not being an eager host to floods of incoming refugees, it is essential to understand the history of displacement and internal political affairs. The subject of Palestinian integration in the Lebanese labor market is interlinked with many other issues: the debate on disarmament of Palestinians in Lebanon; the reciprocity clause; memory of the civil war in the minds of the Lebanese; image and identity of the Palestinians; sectoral divisions of faiths in Lebanon; permanent settlement versus the right of return; naturalization and citizenship; and the Arab-Israeli conflict, to name but a few. However an argument can be made that Palestinian integration into the Lebanese labor market – if properly implemented – can be beneficial to both the Palestinians and the Lebanese.

Palestinians and employment in Lebanon:

The five main sources of income of Palestinian refugees in Lebanon are: employment with the United Nations Relief and Works Agency (UNRWA); remittances from relatives working abroad; employment in Palestinian organizations; employment in agriculture and Lebanese companies; and employment in shops and enterprises within the refugee camps. Semi-official statistics indicate that for more than 50% of Palestinian refugees in Lebanon, monthly income does not exceed $90, much below Lebanon’s poverty line. UNRWA reports a rise in Palestinian unemployment reaching 85% in some camps and refugee concentrations (a statistic that does nothing to help prevent the number of youths who take up arms). A previous influx of Syrian laborers over the past three decades (estimated at 1 million workers by the Crisis Group Middle East Report during the mid-1990s boom), has been a major reason for the prohibition of full usage of Palestinian cheap labor thus far.

Lebanese labor laws stipulate that only members of Lebanese professional associations can receive licenses in order to work in any skilled profession. Associations are created freely; however, for foreigners, they are controlled by the reciprocity clause (Ministerial Decree no. 17561 of 10 July 1962), and thus Palestinians, as stateless people, cannot form associations.

How much can the Lebanese labor market take?

Despite warnings from international agencies that Lebanese economic life could be derailed by political upheaval, the consensus is that some degree of stability is on the way. The domestic political scene has been undeniably reshaped for the better: starting from the widespread local and international condemnation of the assassination of former prime minister Rafik Hariri, the unprecedented convergence of the Lebanese on key strategic issues, the speeding-up of the implementation of the Taif Accord, the formation of a new government, the organization of parliamentary elections, and the subsequent initiation of a new era in Lebanon’s contemporary political history. All such developments restore confidence in the state’s institutions and its adjustment processes are apt to rapidly bridge the gap between actual and potential output and raise capacity utilization from its current 55% to 60% range to the normal 85% to 90% range that prevails in most strong developing economies.

Just like post-war enhancement of Lebanon’s productive apparatus and the rehabilitation of the country’s basic infrastructure helped generate an increased output capacity in the private sector, raising potential output at full employment to above US$30 billion, today’s adjustment perception and growth outlook in fact is making Arab Gulf investors and recently foreign institutional portfolio investors put Lebanon on the high priority list. Lower risk premiums driven by structural adjustment makes Lebanon more attractive when compared to peer emerging countries.

It is therefore prime time to re-boost a sector such as construction which is an important growth catalyst of the economy, but one which has slowed down in the first quarter of this year (26.1% decline in permits issued) due to lower investment and the recent out-migration of Syrian laborers. Same for industry, which was hit hard and its exports retreated by a significant 15.3% over the first quarter of 2005, amounting to US$382 million, against US$451 million over the same quarter of the previous year.

Work in these sectors is now allowed for Palestinians in Lebanon and is of high importance to the economy.

Let us not forget former examples of the contribution of Palestinians to the Lebanese economy: the Farajallah Company was the first in Lebanon to distribute newspapers and printed material; the Atallah Freij chain was first in the clothing industry; George Doumani was the first to hoist the Lebanese flag after making it to the Antarctic; Edwin Abella was the first to establish chains of supermarkets together with a famous chain of restaurants; Basem Fares was a pioneer in establishing the first insurance company; Fouad Saba and Karim Khouri founded the first auditing company; and Hanna Hawwa was the first pilot to fly a jumbo jet for Middle East Airlines.

Fast growth is now needed and indeed being facilitated, and the number of workers must be brought back to the number employed during days of economic boom. Both integration and growth have to happen side by side, as integration is needed for growth, while growth provides infrastructure needed for proper integration in the labor market.

Benefit for the Lebanese and Palestinians?

The recent labor law will help appease the dire situation of the Palestinian camps. The phenomenon of child labor will decrease when other sources of income are provided to Palestinian families, while the significant violence within the camps is predicted to drop. To effectively improve their socio-economic status through employment, however, education and skill-building is needed.

But the integration discussed here is not only beneficial to the Palestinians. The director general of UNRWA in Lebanon, Richard Cook, asserted that a healthier environment in the Palestinian camps will mean less diseases and epidemics spreading to the Lebanese as well as the Palestinians. Also, while other foreign workers send their remittances to their families abroad, Palestinians refugees with families residing in Lebanon, would spend their salaries inside Lebanon, thus contributing as consumers to the economy. With the government trying to reduce public debt which amounts to more than $35 billion (a staggering 185% of Lebanon’s gross domestic product) through VAT, Lebanon needs consumers able to afford it.

Aid collected from world monetary organizations such as the World Bank and the European Investment Bank plus lending countries and humanitarian organizations will be boosted when Lebanon is an obvious supporter of the Palestinian refugee situation. Lebanon’s treatment of Palestinian refugees is currently viewed as amounting to the abuse of human rights, by organizations such as Human Rights Watch and Amnesty International.

In addition, as tourism is a priority for the Lebanese economy, the view of the slums remains a bruise in the marvels that Lebanon has to show visitors.

Issues pending consideration:

Jobs now allowed for the Palestinians are ones that were often already performed by them illegally. What jobs will be included in the new law? How can other professions be gradually included? Dr. Mario Aoun, head of the Medical Association, stated that 200 to 300 Lebanese doctors graduate annually; there is an overload of medics and a high unemployment rate amongst them. In any case, to work in Lebanon, foreign doctors have only to pay LL500 million once. And yet, according to this law, no Palestinian doctor is able to practice in Lebanon.

A regulation of jobs will surely guarantee rights of the employee and the employer. It is unclear however, whether social security and other benefits will be provided to Palestinian laborers. If they are provided, this entails a cost to the employing sector; if they are not provided, this is a sure loss to the Lebanese employees (assuming they would agree to laborious work) who could face discrimination when a company prefers to employ other laborers without benefits.

It is easier to note the limitations of the new law from the Palestinian perspective: in addition to hoping that laws facilitating land and real-estate ownership follow, interviewees have already expressed frustration that there are professionals amongst them still unable to practice in Lebanon. Some fear they will still be looked upon as manual laborers only. One interviewee noted that “Syrian workers could accept low-paying jobs as they had no family in Lebanon to support and no rent to pay. They lived in buildings with other workers.” Other interviewees expect they will be seen as competition and work permits – if granted at all – will be granted upon several strict conditions. The question of benefits and social security arose repeatedly. And everyone hoped for a permanent and secure income.

So far, Hamadeh has not said how many of the 390,000 Palestinian registered refugees would benefit from the new rules. Ninety percent of these refugees were born in Lebanon and anyone aged 57 and below should benefit from the work permit. If an accurate estimate of the resulting expenses facing the government can be made, only then can the government assess whether such a change is possible. The Rassemblement Canadien Pour le Liban (RCPL), for example, ran an intensive study on the skills and capabilities of incoming Lebanese migrants in Quebec. This helped the Canadian government assess where and how their contributions to the economy can best be utilized. Conditions for issuing work permits must be fair, consistent and accessible. For example, suitable examinations can be facilitated to assess and choose qualified employees.

The question of competition feared by some (due to an overall unemployment rate at over 18%), was challenged by Palestinian writer Fatthi Kleib who argued that there were one million foreign workers, in addition to the 2.6 million Lebanese workforce, and the issue of competition never arose until the Palestinians were to be integrated. Kleib also asks why a rise in competition is not feared when discussing manual labor such as construction; agriculture; cleaning services; and work in gas stations or bakeries; although most existing foreign workers already work in those fields. Additionally, the Lebanese Ministry of Labor recently commissioned a study on Syrian workers in Lebanon with a sectoral breakdown suggesting that only 7% of Syrian workers were employed in the industrial sector, which includes construction.

So long as the larger picture of the Arab-Israeli conflict is not solved – or an agreement is reached regarding the right of return of Palestinian refugees, the Palestinian refugee situation remains a Pandora’s box. The Palestinians insist on their desire to return to their homes, the Lebanese fear a due settlement in Lebanon instead, and any procedure such as the relaxation of employment laws, is seen as a threat to all parties concerned (except for the Israelis). While many articles following the recent labor law tackled the issue of permanent settlement versus the right of return, rarely was the subject of the rights of the individuals concerned put forward.

Further work must be done if the recent labor law is indeed to be implemented. Regulation, infrastructure and accessibility are key words for the protection of employers, employees and consumers. What do all individuals want after all? If a sustainable access to a decent and dignified life is not what we all strive for, then what is it?


 

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