Executive Magazine

From darkness to dilemma

by Rouba Bou Khzam January 3, 2024

written by Rouba Bou Khzam

In the midst of Lebanon’s power conundrum, Khaled, a schoolteacher living in northern Lebanon’s Akkar region, tells Executive: “There are relatives and neighbors of ours who sold gold to install solar energy and be able to light a room and a refrigerator to ensure the health of their food, at least. Where was the state electricity at that time?” This sentiment encapsulates the frustrations and challenges faced by Lebanese households in their pursuit of reliable and affordable electricity. He goes on to address what he sees as an injustice in the taxation system. “If [the public utility] Electricité du Liban raised the tariff in exchange for providing us with electricity over a period of hours that would allow us to abandon the generator subscription and install solar energy, then the issue could have been looked at from another angle,” he says. “But it’s unacceptable for the taxpayer to be forced to pay the price of a service that he does not receive.”

Like Khaled and his neighbors, many Lebanese live in monthly or even daily struggles for affordable power. They have in recent years had to contend with outsized electricity bills by nominally illegal private providers, or dip deeply into their savings to foot the bill for solar energy installations, usually a photovoltaic (PV) system and battery. While households grapple with the pressing issue of electricity supply in the best way they can, official state provider Electricité du Liban (EDL) has embarked on its own transformative journey of securing the country’s electricity by introducing a new pricing framework. Gathering anecdotal evidence from Lebanese households and small businesses, Executive examines EDL’s novel approach and dissects the cost versus supply dynamics during the pivotal Q2 and Q3 periods of 2023. The ongoing experiences of individuals from neighborhoods throughout the country portray a reality that extends beyond kilowatts and tariffs, revealing the profound impact of the nation’s power struggles on the daily lives and aspirations of its citizens.

A deficit that spans decades

Amid the profound financial collapse and economic turmoil since 2019, the Lebanese government and EDL were faced with only bad choices in their responsibility to provide citizens with electrical energy. Long practiced subsidy management of public electricity supply became fully impossible in the course of 2021, increasing energy poverty from lengthy power cuts in certain areas to an entire country without state-provided electricity for up to 24 hours, sometimes extending for consecutive days.

Strikingly, this crisis has roots spanning almost three decades, stemming from successive Lebanese governments’ mismanagement of EDL, resulting in widespread power outages. Its intensification into a cloak of darkness across almost all of the national territory was furthered by escalating fuel prices, the Lebanese central bank’s insufficient ability to provide hard currency for oil imports, and resulting challenges in procuring fuel in adequate quality and quantities to secure operation of state-owned power plants.

Many argue that the electricity sector stands as a key perpetrator behind the country’s financial collapse. According to the World Bank, EDL has been a significant contributor to the high government debt, costing the government over $40 billion with annual losses up to $1.5 billion between 1992 and 2018.

In response to the escalating crisis, the caretaker government, led by Prime Minister Najib Mikati, convened on January 18th of this year to address EDL’s status. Asserting that resolving the electricity problem could alleviate 50 percent of the country’s challenges, the Mikati administration presented a plan for improving EDL operations and output. Despite the plan’s initial promise to provide eight to ten hours of daily power, after three months, it proved insufficient, limiting supply to two to four hours on average.

EDL’s new billing system, tying electricity costs to the fluctuating black market dollar, has led to bills exceeding 1,000,000 LL per month, a sharp nominal increase from the previous scenario where a typical monthly bill for the base monthly subscription and respective consumption fees at 10 ampere might range from 50,000 LL to 300,000 LL. Given that a monthly EDL bill of 50,000 LL in the years between 1997 and 2019 was equal to $33.34 and the 1,000,000 LL fee, based on a dollar rate of 43,000 LL to $1 as it stood in December 2022, translated into $23, it is to be noted here that the price hike in EDL charges meant a great burden for earners of lira-denominated wages and salaries but a much smaller adjustment for households with access to dollar-denominated incomes.

In addition to pre-2022 tariffs not having been adjusted since the mid 1990s, resulting in collections that were — and, according to interviewees, still are — often lagging and haphazard, the state’s self-proclaimed will to reform and improve its monopoly provider EDL was highly distrusted.

In a press conference held in April 2023, the caretaker Minister of Energy and Water, Walid Fayad, acknowledged a slight relative success in the electricity plan, citing an increase in supply to a maximum of five hours per day. However, he emphasized the plan’s challenges, attributing the limited success to constraints in funding from the central bank and the Ministry of Finance, along with difficulties in procuring fuel. Despite efforts to enhance the electrical supply, citizens have to cope with only four to five hours of EDL-supplied and invoiced electricity at best.

Citizens, unable to rely solely on EDL, have resorted to private generators and solar energy as their primary power sources despite relatively high fuel costs and steep upfront payments for solar installation. Moreover, when confronted with demands by private generator owners to be paid hard cash (at a rate of near 89,000 LL to $1 throughout most of 2023), heads of households are considering cancellation of EDL electricity meters. Against this backdrop of a pricey and private group of strictly for-profit providers, and a state utility that has up to this time done little to earn the trust of its consumers, it is no wonder that individuals from all around Lebanon tell Executive how they continue to apply new coping strategies in the struggle for daily access to electricity.

The latest voices of users

In Ain Al-Rummaneh, Beirut, Saeed, a 45-year-old resident, transitioned to alternative energy more than a year ago, driven by the inconsistent rationing imposed by private generator owners. Saeed says that EDL “neglects its responsibilities and allows private generators to exploit the Lebanese population.” On the issue of costs, he says, “I question the logic behind receiving significant bills for minimal electricity supply,” raising concerns about the cost of state electricity reaching exorbitant amounts for just a couple of hours. Emphasizing the energy self-sufficiency he acquired through solar energy, Saeed tells Executive, “I did not invest in a solar installation to become vulnerable to high bills.”

Saeed’s lack of trust in EDL, which he views as “overburdened and worn out,” extends to doubts about the reliability and sufficiency of electricity provision. He sarcastically comments on EDL supplying electricity after midnight, a time he deems unnecessary, then states his reason for canceling the utility’s meter as, “we are accustomed to its absence, so I decided to abandon this service completely.”

Ali, an EDL employee who works directly in bill collection, on the other hand advises against the cancellation of meters, warning citizens about potential regrets if they choose to reverse this decision later on. Ali’s rationale behind this caution is a projected increase in meter installation fees. In his view, the state meter is indispensable, even in the face of perceived service inadequacies. According to him, “citizens, despite having solar energy solutions, still require access to electricity during winter for battery charging due to frequent cloud cover.”

This perspective aligns with Samar’s experience — a mother of three from Aley —who installed a solar energy system two years ago, a move that enabled her to abandon reliance on generators and their burdensome bills. Samar, who recently paid two million LL for state electricity covering the months of November and December 2022, highlights how her reliance on solar energy is seasonally augmented by usage of EDL power: “I depend on solar energy for all daily activities, reserving state electricity solely to charge our solar batteries during the winter days in Aley when sunlight is scarce.”

Adnan, a 60-year-old proprietor of a small hair salon in Aley, echoes the struggles of those grappling with the electricity crisis. Having paid $40 for state electricity covering December and January, Adnan expresses frustration at the predominantly nighttime supply that does not cover hours when customer traffic is highest. For Adnan, installing solar power is not only impractical in the foggy area of Aley where he works, but also expensive, with a system of ten ampere requiring an upfront investment of $4000. Adnan highlights the inadequacy of a $100 subscription fee for a five-ampere generator, prompting him to invest in his own generator, a crucial asset for 90 percent of his business, despite the diesel costs of around 100,000 LL per customer, which amounts to around $1.10 at the time of writing.

For Nancy, a student who hails from the Hasbaya region in southern Lebanon where her family’s home receives three to four hours of electricity per day, the case of EDL is one of deliberate avoidance of responsibility. She and her siblings see a stable electricity supply as “essential for our studies, charging phones, laptops, and accessing the internet,” she tells Executive, adding that her parents bear this increased cost. “In our area, we rely on the uninterrupted subscription of a generator, where the cost increased to $55 from the initial $35,” she adds.

EDL’s (re)actions of 2023

When EDL initiated the implementation of a new pricing system on November 2, 2022, with bill issuance commencing in February of 2023, it intended to combine a migration to a financially sustainable utility with a strategic move to curb network infringements. The intricacies of this pricing structure were detailed in a statement released by the corporation in November of 2022. The new scheme prices ten US cents for each of the first 100 kilowatt hours, followed by 27 cents for each kilowatt-hour exceeding 100. Additional charges include a fixed monthly tariff of 27 cents per ampere and a qualification allowance of $4.3 for subscriptions previously set at 5,000 LL per month, doubling to $8.6 for subscriptions calculated previously at 10,000 LL per month (which before 2019 equaled to $3,34 and $6.68, respectively).

The corporation clarified that the lira pricing would reflect the dollar exchange rate determined by the central bank. It added that its tariffs would be subject to adjustments every one or two months, under an aim to align prices to end users with real production costs based on global oil and oil derivatives prices.

However, in another statement, EDL disclosed that bills issued for electricity consumption in November and December of 2022 were calculated based on the exchange rate on the Sayrafa platform plus a 20 percent surcharge, amounting to 43,600 LL to the dollar. By this writer’s understanding, this calculation methodology persisted despite fluctuations in the exchange rate at the end of 2022.

Throughout the year to date, the corporation tirelessly reiterated that it cannot sell electrical energy without collecting its dues. In the most recent “final warning” to date, EDL called on public administrations to settle their electricity consumption bills, threatening electricity cutoffs for those defaulting.

Despite state promises to provide eight to ten hours of power per day under the emergency electricity plan from earlier this year, the reality remains stark. Subsequent to the announcement of the emergency plan, the central bank decided to limit financing advances on purchases of fuel for electricity production from $600 million to $300 million. In turn, EDL issued a warning to ministries and public administrations demanding cash payments in Lebanese pounds and not through bank transfers, giving an ultimatum of October 24 before starting to disconnect services to unpaid accounts.

A source at EDL emphasized the irreversibility of this warning to Executive, highlighting the need to combat inefficiencies, especially as EDL activates collections targeting Palestinian and Syrian refugee camps. As state institutions face mounting bills, and households grapple with insufficient power, critics argue that a new pricing system doesn’t resolve decades of mismanagement, and falls short of addressing the issue of inadequate supply.

While Lebanon has passed through another promising summer followed by both an unexpected regional shock and a continued absence of political reform, EDL’s pricing shift did not dispel the fears of the Lebanese, including Khaled from Akkar. He stresses that “regardless of the new tariff, there is no guarantee that the emergency plan will continue. If it stops, the citizen will remain obligated to pay the subscription fee without enjoying a moment of electricity!”

Some interviews have been translated from Arabic to English; names of a few individuals, whose identity is known to Executive, have been changed upon their request.

January 3, 2024 0 comments

Comment Energy Special Report

Oil wealth: one last chance for Lebanon

by Christina Abi Haidar January 3, 2024

written by Christina Abi Haidar

The quest for oil exploration in Lebanon began in the early years of the French mandate when French High Commissioner Henry de Jouvenel issued a decree permitting exploration, extraction and investment in oil and mineral mines. The initial official Lebanese regulation for oil exploration and extraction, numbered 139 and dated June 23, 1936, marked a further pivotal step. But despite numerous pre-World War II attempts by successive governments to extract oil and gas, especially from the Lebanese onshore, they faced various challenges, leading to unsuccessful outcomes.

Amidst the turbulent years of superpower confrontation in the second half of the past century, the Lebanese Civil War, spanning from 1975 to 1990, further impeded exploration endeavors. Despite post-conflict efforts by subsequent governments in Beirut, progress remained limited into the first decade of the 21st century when Israel announced the discovery of the Leviathan field. The massive find, rumored to contain at least 16 trillion cubic feet, spurred on great Lebanese interest due to it being situated in the region between the maritime borders of Palestine and Cyprus. Subsequently, the Karish field was identified near the southern Lebanese maritime borders.

In 2010, the Lebanese Parliament ratified the Petroleum Resources Law in Lebanese waters, leading to the establishment of the Lebanese Petroleum Authority. The offshore oil decrees were finalized in 2011, and in 2012 the Lebanese Petroleum Authority (LPA) was established. Six members were appointed according to a sectarian quota, and they continue their mission at time of this writing despite the end of the Authority’s tenure.

In 2013, the Ministry of Energy and Water (MoEW) announced the launch of the first licensing round in the Lebanese offshore waters, offering Blocks 4 and 9 for bidding. Numerous international companies applied for exploration rights. After a prolonged evaluation period, on December 14, 2017, the Lebanese government granted two exclusive licenses for oil exploration and production in the two blocks to a consortium comprising French multinational Total Energies, Rome-headquartered Eni S.p.A. and Siberia-based Novatek. Later on, Novatek, Russia’s second largest natural gas producer, withdrew from the consortium due to US sanctions, and was recently replaced by Qatar Energy.

Unfortunately, exploration operations in Block No. 4 did not begin until 2020. However, the initial exploratory well did not yield any gas reserves in commercial quantities, and the coalition did not pursue further exploratory attempts in Block No. 4. Exploration in Block No. 9 was delayed due to a dispute over maritime borders between Lebanon and Israel. In 2022, and after long and complex indirect negotiations, the US was able to reach a specific settlement to demarcate the maritime borders between the two countries, allowing exploration activities to begin.

Faced with this new and exciting fact, in August 2023 Total entered a contract with the American company “Transocean Barents,” the world’s second-largest offshore drilling contractor, to rent a rig for oil and gas exploration in Block 9. Unfortunately, the results from the exploration operations in this well were not promising.

These challenges were compounded by the outbreak of war in Gaza and a constitutional vacuum in Lebanon, marked by the failure to elect a new president and political disagreements over the current government’s role. These factors resulted in a slowdown of exploration operations and negotiations with the consortium for the next stage.

Despite these setbacks, it’s important to note that the initial exploration outcomes are not necessarily discouraging. Many countries have drilled numerous wells before discovering gas reservoirs. Some have drilled up to seven wells without success, only to find a reservoir in the eighth well. This pattern mirrors the experience in most current oil fields in the Eastern Mediterranean. For example, the largest gas field in the Mediterranean, which is the Zohr field located in Egypt’s Shorouk concession, hugs the maritime border between Egypt and Cyprus. The exploitation rights of this field belonged to Shell for 15 years, during which the company drilled several wells but failed to find any gas quantities. They then sold the exploration rights to Eni in 2015, which in turn drilled a well at a depth of 5100 meters to find the largest gas reserve in the eastern Mediterranean, estimated at 850 billion cubic meters. This indicates that the discovery of gas is not always achieved through the drilling of the first well.

Required roadmap:

The delay in exploration operations is distressing for the Lebanese population, already grappling with severe economic and financial challenges. The promised oil wealth represents a potential lifeline for them amid the current crisis. However, this delay can be turned to advantage by formulating a clear strategy to harness the benefits of the oil wealth. Approval of a roadmap for laws, decrees and regulations is crucial. Thus, effective and transparent discussions involving stakeholders, experts, legal professionals and parliament members are necessary. These discussions should revolve around a fundamental question: what are the Lebanese aspirations regarding oil wealth?

The initial step in answering this question is recognizing that oil wealth is a natural resource that should serve and benefit the citizens of Lebanon and future generations. Categorizing oil revenues into emergency and unsustainable funds is imperative. A portion of these funds can be allocated to developing infrastructure and essential public facilities, fostering industrial growth and other vital services. Simultaneously, there’s a need to realize that these revenues cannot solely sustain the state’s financial needs, prompting the creation of an independent internal Lebanese economy.

Achieving this requires coupling exploration and extraction operations with the establishment of a transparent, honest and highly competent government administration. This need extends beyond the oil sector to encompass all government authorities, an aspect sadly lacking in Lebanon. Many political forces view the promised wealth as their entitlement, potentially leading to activities that consolidate their control over Lebanese political life. Relying on such thinking risks creating another failed and bankrupt oil state.

Addressing the fundamental question outlined above necessitates outlining practical steps for the strategy. This involves developing both new and existing industries, leveraging the explored gas, particularly in electricity generation. Given that most electricity generation plants in Lebanon can utilize natural gas, establishing a coastal pipeline to supply major plants (Tyr, Al-Zahrani, Jiyyeh, Zouk Mikael and Deir Ammar) is vital. This not only reduces environmental pollution but also lessens the burden on the Lebanese treasury for oil imports. Additionally, it extends the lifespan of electrical production generators and ensures a diversified source of fuel. This is especially pertinent since the public utility, Electricite du Liban (EDL), which has the exclusive rights to generate electricity, currently relies on one sole source of oil—heavy fuel oil—for electricity generation. Dependence on gas will also open the door for other clean resources (such as hydro, solar and wind) to be involved in the production process.

To safeguard Lebanon’s self-sufficiency in explored gas before any exportation, the Parliament should enact legislation, following the example of numerous oil and gas-producing countries. This comprehensive approach is crucial for steering Lebanon away from the pitfalls of becoming a failed and financially unstable oil state.

Hydrocarbon extraction is a nascent industry in Lebanon, exerting a nuanced impact on the environment across various dimensions. Hence, Lebanon must prioritize environmental preservation and shield itself from any activities that may alter its ecological and touristic appeal. This involves enforcing global standards on exploration, transportation, and storage companies, with stringent monitoring and accountability measures in case of errors.

Border demarcation, regulation and legislative bodies

Lebanon must expedite the demarcation of its maritime borders with Cyprus to the west and with Syria to the north. This matter should not be underestimated as it ensures stability, which encourages reputable companies to participate in exploration operations in the blocks located in the two countries’ adjacent territorial waters.

The enactment of legislation governing oil and gas exploration on Lebanese territory, particularly onshore operations due to their cost-effectiveness, should be promptly completed. This process must carefully consider environmental conditions, safeguarding groundwater, riverbeds, antiquities and ensuring fair and prompt compensation for necessary expropriations.

Establishing a storing and transportation national oil and gas company to store petroleum extraction and handle transportation activities is imperative. This entity should replace the oil installation facilities in Tripoli and Zahrani, defining its legal, administrative, and financial structure clearly and effectively. Its core responsibilities should extend to the storage, transportation and export of gas, considering Lebanon’s significant oil reserves in Tripoli and Al-Zahrani, along with the need for the rehabilitation and development of existing oil refineries.

Additionally, a national oil company, modeled after those in other oil-rich countries, should be formed. Adhering to the principles of good governance, this company should collaborate with major international firms in operational activities. The primary objective behind establishing this national oil company is to ensure Lebanon’s security and energy independence, aligning with an economic policy that fosters collaboration with neighboring countries across various sectors.

Crucially, the establishment of a sovereign oil and gas wealth fund is required, dedicated to housing oil and gas revenues along with profits from its investment operations. Recognizing that oil revenues differ from conventional taxes, the fund should serve the interests of future generations. A portion of these funds can be utilized for the advancement of human development in Lebanon, supporting research centers, educational institutions, infrastructure, etc. The management of this fund must be independent, free of narrow political and sectarian influences and interference.

Before initiating these steps, the government, following the election of a new president, must promptly appoint experienced and transparent members to the LPA.

Lebanon’s leaders, study centers, and advocacy groups should capitalize on this opportunity to endorse and compel Parliament members and the anticipated government to adopt this comprehensive strategy. Clear, transparent regulatory provisions should be established to delineate the processes of extracting, transporting and benefiting from oil and gas, ensuring that Lebanon’s anticipated oil wealth becomes a boon rather than a curse. Drawing lessons from past experiences, Lebanon must seize this opportunity to harness its natural resources effectively, preventing any irreversible losses.

January 3, 2024 0 comments

Leaders

Frantically seeking energy for peace and growth

by Executive Editors January 3, 2024

written by Executive Editors

From the idyllic early-December perspective of Beirut’s waterfront promenade, with views up over Jounieh bay to the distant peaks of the Sannine range, the unseasonably warm weather and the dusty mountain flanks above a layer of atmospheric haze are not calling out for an early ski excursion. The vistas on this first Sunday of the last month in 2023 clearly invite sailing and leisure crafting off the shore, while for the many land-dwelling pleasure seekers the conditions today favor cycling, skating, and indulging in a curbside argileh encouraged by music-players. And that’s what people are doing.

But such an observation, which one might have filed into personal memory as a simple indication of outdoor revelry options just 10 or 15 years ago, has in this winter completely lost its innocence. How can one endeavor to muse innocuously about weather and leisure at a juncture of time and space where less than 300 kilometers to our south another conurbation – on the exact same coast as Beirut – is being subjected to indescribable suffering? And when four hours flying time away in the other direction, about an estimated 100,000 denizens of the world are engaged in hot debates over our climate and energy future?

Or, to turn the question around into an actionable approach, nothing could be seemlier for a resident of Lebanon than to dedicate herself or himself today to efforts of thwarting war in regional arenas and to seeking constructive answers to the towering problems of mismanaging the planet and its resources on the global level. Truly, taking a proactive approach when thinking through both of these regional and global challenges is incredibly appropriate from a Lebanese perspective. In principle, this is because a determined and constructive mindset of solutions is certainly the best approach open – and the only viable approach left – to responsible Lebanese citizens at the end of another year of inactivity in the important fields of public policy making and political decision making.

A new risk order

The gravest risk and most immediate survival need that Lebanon finds itself engulfed in today, is of course to find a way out of the cross-border skirmishes hurting its villages and towns and out of ongoing warfare south of its borders (which had for more than a decade been preceded by a series of imbalanced and thus ultimately insincere attempts at solving the Middle East compunction) into a sustainable Arabian peace. In this regard, it seems almost superfluous to emphasize in these pages that on the Palestine front, the threat of regional conflict engulfs Lebanon as it does all people in the Near East, regardless of their religion and nationality.

The urgent quest of an Arab and Lebanese energy transition, the broad topic of this special report, poses an embedded challenge of a very different sort: with regards to global and regional needs for climate risk mitigation and climate change adaptation, Lebanon’s need for developing renewable energy and implementing a smart and sustainable energy transition, is that of a very small country.

This is to say that on one hand, Lebanon’s energy transition will not make a huge or even mid-sized dent in the shrinking “carbon balance” of human activities. On the other hand, Lebanon’s extensive recent experiences with crises, including an energy and electricity crisis, along with its high potential for developing renewable energy (RE) sources and very quickly making an integrated energy transition, imply a national responsibility that is significantly larger than achieving energy sufficiency and equity for the people in this country.

Potential new leaders in energy transition

Therefore, it is of great significance for Lebanese decision makers and solution seekers that on the global energy front, the annual climate carnival of the “conference of parties” (COP) reached its 28th edition in an Arab setting. Held this year at Expo City in Dubai, the organizers’ count on the UNFCC website lists over 50,000 registered delegates, 15,000 non-governmental organizations, and almost 1,300 media organizations.

From Dubai as the year’s geographic reference point on the importance of planetary sustainability, come important climate and energy transition news to the Arab thinker. In one example, one with direct relevance to the Arab world, a study from the International Labour Organization (ILO) trumpets that the Middle East and North Africa (MENA) region “could create 10 million new jobs, and accelerate GDP to 7.2 percent [growth] and employment to 5.3 percent in less than three decades, through strong industrial and climate development policies,” with an ILO official additionally noting that “the world finds itself in the middle of an accelerating global energy transition. The MENA region has the potential to become a new leader in this transition.”

This encouraging headline offers perhaps more realistic prospects to the region than an expectant tallying of UN climate-connotated funds could. Actually, as Executive’s inquiries into accessible climate funding in Lebanon have reconfirmed during research for this special report, prospects for local funding appear dim when perusing literature such as the Special Climate Change Fund (SCCF), the Least Developed Countries Fund (LDCF) and the Adaptation Fund (all of 2001), the famed Green Climate Fund (GCF) of 2010, or the new Loss and Damages Fund, which after considerable and time-consuming setup quibbles, received initial pledges in Dubai on the first day of COP 28.

Good will and unweildy collaboration

A Lebanese participant in COP 28 tells of good will and sincerity. But to the distant spectator of the media and press releases around the climate event, much of the energy needed for mitigating and adapting seems rife with disagreements and alarmism. Instead of demonstrating solutions and showing models of technical, political, and behavioral adaptation, many climate change responses, at COP 28 as at previous iterations, fit with the historic human pattern of addressing big challenges of the public good with verbose statements. The question is how many of all those declarations will turn out to deliver real benefits.

With energy security and climate management, it is the same question as with so many other historic calamities from starvation and pandemics to war. How many political promises will be enacted and how much of real behavior change will still be attempted by a sufficient number of people once the deafeningly loud alarm bells – and their amplification by media – have been superseded by other fears and more recent waves of news and propaganda?

Clear local priorities

For Lebanon, visibility on utilization of renewable energy and a path to energy security is obfuscated by energy multinationals (never mind that many of these corporate giants with ongoing exploration in Lebanese waters are vocal at COP 28 and yet do not provide any local interviews on their strategy and vision in a small market like Lebanon), by institutional weaknesses, and by the known obstacles to finding investments. But most of all the vision of and path to energy security is obstructed by the common trilemma regulatory and legislative failures, by politics and vain self-interests of local power players.

Not withstanding the small size of the Lebanese economy, Lebanon can contribute meaningfully to the human capacity for climate risk mitigation and climate change adaptation. But from the perspective of having to fight energy poverty for its population today, the more serious problem is that the country needs to take action. It is not in a luxury position of debating energy security under a carbon-neutral horizon, because there is no energy sufficiency at this moment.

What exacerbates two of our time’s fundamental problems – war and climate threat – from the Lebanese perspective, is that they are interrelated. It is obvious that the challenges of building future energy security with a high share of RE sources and of reaching a sustainable peace in the Middle East, have this year become intertwined to a degree that makes finding a joint solution imperative.

Thus, in the context of energy security as a priority need of Arab countries – the theme of this special report and issue of Executive – the very soil and rocky ground on this eastern shore of the Mediterranean is crying out. No statement of global solidarity vis-a-vis threats of planetary nature will hold fundamental value until there is a breakthrough in liberating these lands from reiterative cycles of conflicts and mind-numbing hypocrisies of global, regional, and sub-regional power brokers. Development of humanly sustainable living by peoples in the Middle East since the end of the Cold War, have been delayed by self-interests, and worse, the disinterest, of historic participants in colonialism and various present-day global power players, towards mandating and supporting real regional peace.

Indeed, without regional peace for all peoples in this part of the world – for the last 40 years one of the two most volatile and dangerous confrontation zones on the planet – all talk about food security, energy security, social security, or improved dignity and equality, will be nothing but the noisy clanging of political cymbals or fool’s bells. Thus, from the Beirut vantage point and with Lebanon as energy insecurity frontline, it is easy to see the linkages between Arab climate responsibility and the imperative of negotiating sustainable peace.

January 3, 2024 0 comments

Comment Energy Special Report

A project for greater energy efficiency

by Mario Ghoraieb January 3, 2024

written by Mario Ghoraieb

Harnessed energy constitutes the juice of life for industrial and post-industrial, knowledge and information based, economic activity. Crucial for our quality of living, electricity powers, among other things, our refrigerators, washing machines, LED lights, and domestic shrines to entertainment. It powers industrial equipment, whether programmable machine tool solutions – the machines used to make tools and precision parts for other machines – or the most powerful or most efficient electricity-driven manufacturing units. It is indispensable for the knowledge economy and information societies in the 21st century, with electricity driving computers and communication networks and even the transformation of money (remember, for example, how big an issue electricity is in the context of cryptocurrency exchanges and Bitcoin mining).

Without continued economic growth, the dispersal of economic equality and achievement of universal societal wealth, both within and between countries, is unachievable. But economic production is only one, and sometimes brutally overemphasized, factor in human existence and the wellbeing of our species. What the universal role of electricity in shaping the quality of our mundane lives and the reliance on it for economic production and productivity also mean, however, is the inescapable presence of irresponsible use. Thoughtless squander, and even deliberate abuse of this essential ingredient is rife in modern times. Alongside the fact that most of energy is expended in the production of energy, the wasting of this resource makes rationalizing electricity usage a crucial need for future economic growth and for the preservation of living quality.

Part of such a rationalization are energy audits, improvements in the efficiency of our everyday appliances, upgrading household electricity conduits, investments in advanced machinery and methods of production, and adoption of optimal power solutions for public venues, institutions and systems. Such rationalization efforts, which by Executive’s past observations were often driven by corporate need for savings but led by energy consultants and academically inspired tech startups, can be found in Lebanon, albeit historically not in the needed, broad coverage of private and public life.

Responding to the challenge

Under the current challenge of rebuilding and revitalizing economic activities in the country, it is moreover notable that energy audits are embedded into today’s rare opportunities of renewable energy finance for enterprises (listen to Executive’s Renewable Energy Finance podcast with Nadine Tawk and Danny Maalouly of USAID).

Still, the awareness and practice of energy conservation among private householders remains underdeveloped. Furthermore, the attention given to reduction of electricity and energy wastage by public administrators appears to be amiss as one among many deficiencies in Lebanese institutions. Additionally, energy conservation in small, medium and tiny enterprises needs to be incentivized much more, as career environmental advocate and energy conservation practitioner Mario Ghoraieb describes in the following story of ongoing civil society-led and EU-supported efforts for pushing the agenda of energy preservation forward (For more on Mario Ghoraieb’s views, also listen to our podcast on Lebanon’s energy transition and its prospects of conservation, regulation and security).

An EU-funded initiative for Lebanon’s SMSEs

Reestart (Renewable Energy and Energy Efficiency for Sustainable Energy Transition and Reinforced Trust between SMEs and ESCOs) is a European Union funded project, with a budget of 2.5 million Euros over three years beginning in November of 2019. Instituto per la Cooperazione Universitaria (ICU) is the lead implementer alongside local and international partners including the Lebanese Solar Energy Society (LSES), the Italian National Agency for New Technologies, Energy, and Sustainable Development (ENEA); and the Federazione Nazionale delle Esco (FEDERESCO).

The project was designed starting from the identification of two main market criticalities. The demand side saw a significant need for renewable energy (RE) and greater energy efficiency (EE) technologies for small and medium-sized enterprises (SMEs) due to the lack of financial resources to invest in RE/EE and weak access to available SE finance. On the supply side, the project identified significant difficulties in making full use of alternative financing models to support RE/EE investments.

Challenges on the supply side were traced back to a lack of know-how within energy companies, and the absence of successful and replicable models at the national level. Reestart aimed to address both the demand and supply side to foster increased uptake and improved quality of the RE/EE services and solutions provided to the local market. It focused on reinforcing energy service companies (ESCOs), due to their potential to act as game changers in the national sustainable energy transition

Identifying deficiencies, capacity building, and partnering for success

Reestart’s strategy focused on ESCOs’ business development through empowerment and fostering of a supportive ecosystem and, mainly, trust-building through successful SMEs-ESCOs co-operation. Duly empowered, ESCOs can provide alternative financing models for RE/EE, and through successful partnership with SMEs within a supportive ecosystem, both ESCOs and SMEs can develop mutual trust. By fostering this trust, Reestart aimed to trigger a breakthrough that would lead to wider RE/EE adoption and ESCOs market growth. In turn, the cascading effects would include an increased RE share in national energy consumption, reduced overall electricity consumption and reliance on the national electricity grid as well as private generators, and increased access to stable and secure green energy supply, thus contributing to Lebanese economic growth.

Specifically, participants in Reestart included all ESCOs listed under the Lebanese Center for Energy Conservation (LCEC) framework (their qualification process evaluates indicators such as the company’s experience in the sector, financial revenues and services provided, and World Energy Council membership), 35 SMEs, and 20 energy and finance companies from both the public and private sector. The project endeavoured to pilot innovative technologies and business models, support access to available sustainable energy finance, and create a supportive institutional environment for ESCOs.

However, given the lack of know-how within most local energy companies concerning energy auditing, ESCO business models and proper methods of implementation, it was critical to develop these capacities and skills. Towards this end, ICU collaborated with the AEE (Association of Energy Engineers), to deliver a three-module training certification program to the selected companies on energy management (CEM), measurement and verification (CMVP) and performance contracting and financing (PCF). The program covered technical, financial and contractual aspects of ESCOs’ business. Both qualified and aspiring ESCOs need to reinforce their overall capabilities. For ESCOs with LCEC qualification, this meant improving the quality and soundness of the services delivered and underlying contracts in order to consolidate their customer base and grow their business and financial capacity. On the other hand, aspiring ESCOs need to enhance their energy savings and performance contracting (ESPCs) and gain the technical skills needed to be acknowledged as qualified ESCOs, thus becoming more competitive on the local market. Once the energy companies received certification in the three above mentioned modules, they were ready to lead on the energy audits for the selected pilot implementation projects.

That said, it is of utmost importance to acknowledge that the partnership between the SME and ESCO is one of the fundamentals of the ESCO model. This is why ICU adopted the Decentralized Renewable Energy Power Generation (DREG) which matches and empowers the partnership between ESCOs and SMEs, enabling them to apply to the project jointly. The purpose of ESCOs nominating SMEs through this method is to build trust and foster a supportive ecosystem for successful cases of SMEs-ESCOs cooperation.

Another one of Reestart’s objectives was to build a pilot of the ESCO business model through the ESCOs and SMEs involved in the project. This enabled the involved energy companies, newly considered as ESCOs, matched with their SMEs, to perform energy audits based on the developed Scope of Work (SOW) of the energy audit, the agreement signed between ICU and the energy company, and the notice signed by the SMEs (allowing ICU to perform and facilitate the audit) as well as the ESPC contract to be signed between the ESCO and the SME guaranteeing the savings.

The final selection of the six pilot projects was based on the grading of the SMEs and assessment of the ESCOs. The six pilot projects were financially supported by a donation of 110,000 Euros each. Each ESCO will secure the remaining amount from the participating SMEs through the return on investment of the implemented measures and based on the proposed savings.

In parallel with the selection of the six pilot projects, it was of crucial importance to develop the ESPC contract that framed the contractual relationship between the ESCO and the SME, a pillar for the ESCO business model. Therefore, we approached this matter in the following way:

Step 1: Designing a successful ESPC framework

The first step in designing a capacious ESPC framework is data collection and research. The project reviewed successful, longstanding ESPC programs in other countries, namely within the USA and UAE, in order to identify specific best practices that could be incorporated into the program’s design. Additionally, the project collected data on the current status of the ESPC market in Lebanon.

Step 2: Strategic outreach plan

The second phase of the project included developing a strategic outreach plan in order to provide the necessary information and awareness to stakeholders (specifically facility owners and managers) involved in the ESPC process. The strategic outreach plan included a compiled document that describes the importance and process of ESPC (from audit to contract to implementation) as well as the responsibilities and duties of each involved party.

Step 3: ESPC Development and creation of standard templates and model documents

The development and creation of standardized templates and model documents was necessary to successfully guide the procurement and contracting process for involved stakeholders. Usually, there are two main approaches to solicit an ESCO: ESCO Pre- Qualification, and solicitation through a standard request for proposal. Since the project only considers ESCOs for a pool of a pre-qualified ESCOs, the ESCO solicitation with ESCO Pre-Qualification was used. This phase included the development of the eleven documents and templates.

In conclusion, the Reestart project, generously funded by the EU and spearheaded by the ICU and its partners, embodies a transformative endeavor to redefine Lebanon’s energy landscape. Beyond meeting immediate energy needs, Reestart envisions a future where economic prosperity harmonizes with environmental sustainability. It not only represents a project for greater energy efficiency but a testament to international collaboration, strategic planning, and a commitment to fostering positive change. As Lebanon navigates the challenges of rebuilding and revitalizing economic activities, Reestart stands as a beacon, illuminating the path towards a more sustainable and energy-efficient future.

Mario Ghoraïeb is the energy and private sector unit manager at ICU

January 3, 2024 0 comments

Energy Infographics Special Report

Consuming energy

by Executive Editors January 3, 2024

written by Executive Editors

Arab countries are witnessing a fundamental recalibration of their different roles in the global game of energy. The world’s accelerated awareness of energy security priorities and still growing climate risks necessitates a, however reluctant, global rethinking of energy policies and politics, which for the past century had cast exploiters and consumers of fossil energy sources into corresponding positions of innate strengths and urgent needs. No longer is the Arab world easily compartmentalized into rich or richer oil exporters with no other concern than the optimization of hydrocarbon production and under-affluent oil importers whose expanding population numbers are their blessing and bane.

Source: United Nations Framework Convention on Climate Change

In the changing world energy order, climate risk mitigation, climate change adaptation, and renewables are trumps of a more sustainable future under the perspective of energy security, while perceptions of risks affiliated with energy sources such as nuclear and hydrocarbons have flipped from wild enthusiasm to rejection. In the context of population growth, annual increases in electricity consumption of 2 percent on global level, and long-unabated rises in damaging carbon emissions (they doubled for example in the three decades since climate alarms were rung at the Earth Summit in Rio de Janeiro back in 1992), energy security is the aspiration to have affordable, diversified, sustainable, and adequate/reliable access to progressively cleaner energy. Over this period, electricity production and consumption data of Arab countries show an increase from 309 terawatt hours (TWH, or 309 billion kilowatt hours) in 1993 to some 1389 TWH in 2022. In terms of individual consumption, the numbers in the region show immense variance between countries, to the point that the “average” Lebanese supposedly consumes slighty more than the global average in electricity and thus uses as much of this resource in 10 days as is afforded to the average Yemeni in a year… not to speak of the discrepancy between top Arab consumers of electricity and the global average or bottom, where Yemen is situated. In the global context of climate risk alertness, Arab countries are now classified by most indices on the matter as highly vulnerable and sufferers of energy insecurity, with Lebanon and its Arab neighbors among the most vulnerable. Bets are on for diversification, renewability, and reduction/conservation of energy, not for extracting the most in temporal profits at any cost.

The new rules and strategies of the energy game appear to favor and reward diversification and collaboration, win-win strategies of mutually profitable exchange and inter-territorial sharing of energy that is produced from renewable resources. At the same time, the long track record of ever more intense production and relentlessly increasing consumption shows that the status quo of dependency on fossil sources and mercantile organization, with international mechanisms of energy finance and major roles for producer conglomerates such as OPEC, are not fated to vanish from economic and political visibility like smoke from an extinguished wood fire.

January 3, 2024 0 comments

Special Report

Energy Security

by Executive Editors November 28, 2023

written by Executive Editors

Executive talks to Mrs. Nadine Tawk, a business development trade lead at USAID Trade & Investment Facilitation (TIF) project and Mr. Danny Maalouly, Investment Lead at USAID Trade & Investment Facilitation (TIF) project about access to finance for satisfaction of Lebanon’s energy sufficiency needs and long-term aim of sustainable energy security

November 28, 2023 0 comments

Special Report

Energy security: National and regional outlooks

by Executive Editors November 24, 2023

written by Executive Editors

Executive talks to Mrs. Christina Abi Haidar, a lawyer and a legal expert on energy and Mr. Mario Ghoraieb, the energy program manager at ICU, about energy conservation in Lebanon and the state of regulation and facilitation of renewable energy at the government level, as well as the regional outlook for energy security.

November 24, 2023 0 comments

Brand Voice

The difference between smoke and aerosol

by Philip Morris Lebanon October 19, 2023

written by Philip Morris Lebanon

If you hear the word aerosol, you might think of a can of deodorant, but it’s actually much more than that. Aerosol is the scientific, umbrella term for solid and liquid particles suspended in gas – such as a cloud. Smoke is actually a type of aerosol that is generated during combustion, the scientific name for ‘burning.’ And while smoke is an aerosol, not all aerosols are smoke.

Smoke-free products, while not risk-free—are a better choice for adults who already smoke. Science and technology have allowed the production of alternative products that don’t burn tobacco, therefore don’t produce smoke—they are in fact, smoke-free. When scientifically substantiated and subject to appropriate quality and safety requirements, smoke-free products do not create smoke and therefore should not be a source of second-hand smoke or ash. The absence of smoke can significantly reduce the average levels of harmful chemicals compared to cigarettes. Whilst not risk-free and delivering nicotine which is addictive, this makes them a better alternative for adults to continued smoking.

WHAT IS SMOKE?

Smoke is the result of combustion or burning. When a cigarette is lit is burns tobacco at temperatures up to 900°C. That creates smoke which contains approximately 6,000 chemicals, around 100 of which have been classified by public health authorities as harmful or potentially harmful. If the temperature is reduced to a level where tobacco or nicotine containing liquid is heated rather than burned, the smoke is removed.

WHAT IS AEROSOL?

Aerosol is not associated with combustion. Smoke-free products, whilst not risk-free, have the potential to significantly reduce the average levels of harmful chemicals compared to cigarette smoke. Consumers typically use the term “vapor” to refer to the aerosol generated from heated tobacco products or other nicotine-containing products.

Quitting tobacco and nicotine altogether is the best choice for health. Existing tobacco control measures designed to discourage initiation and encourage cessation should continue.
However, despite these efforts, millions of people continue to smoke. Science-backed, smoke-free products can play a role in moving adults who would otherwise continue to smoke away from cigarettes. With the right regulatory encouragement and support from civil society, together we can deliver a smoke-free future more quickly than relying on traditional measures alone.

THESE ARE THE FACTS. BROUGHT TO YOU BY PHILIP MORRIS LEBANON

October 19, 2023 0 comments

Economics & Policy

Women in data science

by Sana El Hajj July 5, 2023

written by Sana El Hajj

Countries in the Middle East have started to realize that meeting their long-term economic development goals depends on their ability to join the ‘Fourth Industrial Revolution.’ The United Arab Emirates (UAE) for example, has set a National Artificial Intelligence Strategy for 2031 and appointed the world’s first minister of state for artificial intelligence in 2017. In Dubai, “One Million Arab Coders” was launched in 2017; an educational platform that offers free programs for individuals interested to develop digital skills. It is described as the largest initiative of its kind in the Arab world addressed at employing a growing youth population in the expanding digital economy.

As part of Vision2030, the government of Saudi Arabia has created the Digital Government Authority and the Saudi Data and AI Authority to spearhead the digital transformation program. According to the Saudi government, it has implemented eight digital policies which have aligned 130 government departments and recorded more than 510 million transactions with a user base exceeding 22 million people (Saudi’s population is 32 million, according to latest statistics). In 2022, UAE and Saudi Arabia ranked 24^th and 41^st respectively in the Government AI Readiness Index by Oxford Insights.

The Oxford Insights Government AI Readiness Index 2022 seeks to address the question of how ready governments around the globe are to implement Artificial Intelligence (AI) in the delivery of public services to its citizens. The index measures 39 indicators across ten dimensions, and three pillars: Government, Technology Sector, and Data & Infrastructure. The data is derived from a variety of resources, ranging from databases such as the number of registered AI startups on Crunchbase, to indices such as the United Nations eGovernment Development Index.

Despite the multi-layer crisis, Lebanon has been able to improve its position in the eGovernment AI Readiness Index from 112 in 2019, to 73 in 2022, and there is still ample opportunity for advancement. The private sector and higher educational institutions have been instrumental in this endeavor.

Arab women have been playing a key role in the advancement of the data science field. Some of these women include May Habib, a Lebanese entrepreneur who co-founded Writer, an artificial intelligence writing assistance for teams. Jordanian Reema Diab was named as an AI Global Ambassador from global AI network SwissCognitive and is a consultant for Tesla and the World Bank. Kinda AlTarbouch (Syrian), founder and CEO of Lableb, was named for MIT Technology Review’s Innovators Under 35 list. Manal Jalloul (Lebanese) is the cofounder of AI-Lab, which is the certified partner of NVIDIA in Europe, the Middle East and Africa. AI-Lab aims to provide specialized hands-on training and consulting services in the fields of Artificial Intelligence, Accelerated Computing, and Data Analytics to the industry in the Middle East region.

Lebanon’s role in promoting women in tech

The American University of Beirut (AUB) held their seventh annual event to promote women in data science (WiDS) earlier this year. It is a great platform for promoting women’s accomplishments in the field and pushing for more. This year during the April conference, the women leaders presented an array of trendy topics on the role of data science in disaster planning, public policy, smart cities, social good, and healthcare.

The Public Policy Track was particularly interesting because it showed the type of work that has contributed to Lebanon’s improved ranking over the last three years. Carole Alsharabati, PhD, a Professor at Saint Joseph University in Beirut and a Founding Partner at Siren Analytics, presented on how the public sector can be transformed with technology and artificial intelligence. She showed how AI can help strengthen civic culture by giving example from her work on IMPACT (Inter-Municipal & Ministerial Platform for Assessment Coordination and Tracking), the platform that many Lebanese became familiar with during the lockdown periods of the Covid-19 pandemic. IMPACT was used to manage the Covid-19 vaccination process, helping avoid an additional 6,330 deaths between January and September 2021, according to an analysis by Siren Analytics. In addition, it insured fair and inclusive aid distribution to households under extreme poverty through the Proxy Means Test (PMT) during the economic crisis; 550,000 households registered, 250,000 visited, and more than 80,000 enrolled through PMT, according to data collated by IMPACT.

Accountability measures have been built into IMPACT to enhance digital auditing procedures. By combining data analytics with international best-practice methodologies, users of the platform can identify irregularities, assess effectiveness across all public administration and at municipal level, and recommend remedial or improvement actions.

In addition, in the security sector, huge efforts were mobilized to reduce crimes through Intelligence-Led Policing. Crime occurrences were reduced by about 30 percent between 2017 and 2018 because of hotspot analysis and other analytical tools. There have also been many cases of effective crime resolution due to access to information and connecting data points together.

Another project focused on detecting disinformation, fake news and the promotion of constructive journalism withArabic Natural Language Processing. Dalil is a factchecker platform deployed across seven Middle East and North Africa countries, including Lebanon, that uses AI in detecting propaganda and false news posted in Arabic.

In one example, in comparing two newspapers in Lebanon during the month of April of 2023, the content of the first one showed a 33 percent bias and 17 percent propaganda, whereas for the second it showed a 20 percent bias and 11 percent propaganda allowing to index media and – in the future – journalists by level of objectivity.

**Turnitout The Deceit Detector (work in progress)**
*Source: Siren Associates*

A lesser-known project under IMPACT is the forest fire prediction model. The predictive model of fires comes from an AI-driven algorithm developed by the Centre National de Recherche Scientifique (CNRS). The CNRS fire prediction model has successfully anticipated, at least 48 hours prior to their occurrence, 30 percent of the fires that have taken place from September 2020 till June 20, according to a report by Sirens Analytics.

Angela Elzir Assy, a labor market specialist at the World Bank, at the WiDS event spoke about how leveraging big data can inform policy for more relevant skills development programs. The numbers were alarming. For example, the World Economic Forum launched its ‘Reskilling Revolution’ program in 2020, with the aim of empowering one billion people with better skills, education and economic opportunity by 2030. A new report from the National Skills Coalition, an American skills advocacy organization , used data from 43 million online job postings to assess digital skills demand. The findings reveal that 92 percent of jobs now require some type of digital skills.

Open access to open the future

The urgent need for large accessible databases is crucial to drive efficiency, quality, sustainability, and resilience. Once integrated into the processes, AI can help gain efficiency, bring fairness, control fraud, preempt deceit, and much more. AI and machine learning insights need to be exploited to accelerate problem solving.

In Lebanon, many leaders are still reluctant to advance technologies and best practices that allow data to be easily accessed, shared, and analyzed by a broad range of users because of the transparency and accountability it brings.

In some cases, state actors try to stop, sabotage or intimidate champions of change. The risks of compromising secrecy and privacy stand also in the way of data democratization. Civil society, think tanks, private sector and media need to lobby for change.

Major policy measures need to be implemented to accelerate AI adoption and promote digital transformation; these include and are not limited to:

Establishing independent research centers supported by universities to develop market driven technologies and present smart business solutions;
Creating a national council for AI and innovation and onboarding schools and universities;
Anticipating the jobs of the future and revamping educational programs accordingly;
Renaming the Ministry of Education and Higher Education as ‘Ministry of Education and Innovation’;
Increasing data literacy among civil servants and the wider community;
Establishing and replicating AI Hubs that present great job creation opportunities.

Women can be the drivers of change in the public and private sector to quickly embrace data-driven decision processes. They are often strong communicators, collaborators, and problem solvers, which can lead to better decision-making and more effective teamwork.

The women who presented in the AUB WIDS conference have grasped that the complexity and uncertainty of today’s global challenges require us to open up access to data, collaborate and move towards data-driven work in the private, public and social sectors.

Although Lebanon has taken a few steps in the right direction, there is a dire need to revisit Lebanon’s Digital Transformation National Strategy and make it on par with the ambitious strategies that other countries in the region have set for themselves. What is more important is that it gets implemented and does not stay on paper. Women have proved that they can make huge contributions and even lead the way in that direction. It is time for the Lebanese government to introduce more inclusive laws that encourage the role of women in the field of data science and artificial intelligence.

Sana El Hajj is a lecturer at the Suliman S. Olayan School of Business at the American University of Beirut

July 5, 2023 0 comments

Analysis Education Special Report

The Critical Future of Lebanon’s Teacher Supply Chain

by Michael Maalouf June 9, 2023

written by Michael Maalouf

During the last four years, Lebanon’s education sector has undergone major changes due to the economic crisis, political instability and social challenges which resulted from the Covid-19 pandemic. As teachers became affected by the worsening economic conditions, schools started witnessing the migration of key members of their faculties, which in turn has led to the deterioration of the quality of the education system as a whole. The Lebanese government, along with public and private educational institutions so far have failed to form a sustainable plan to help teachers cope with the crisis, leaving the future of Lebanon’s education uncertain.

Public school teachers have been among the most impacted by the economic crisis and the relentless depreciation – interspersed with an ineffectual and insufficient official devaluation – of the Lebanese pound. A survey and study conducted in 2022 (prior to the official 90 percent devaluation of the Lebanese pound) by the Center for Lebanese Studies (CLS) on Lebanon’s education sector challenges indicated that an estimated 39,000 public school teachers and 50,000 teachers in the private sector have been placed under austerity. Recent indications of purchase power degradation of teachers’ salaries denominated in the Lebanese currency are compelling not only in the form of local price inflation data but also in the form of labor action through desperate teacher strikes and demonstrations in front of the Ministry of Education and Higher Education (MEHE). All indicators leave no doubt that the income situation of the vast majority of teachers has worsened by a further magnitude in the first quarter of 2023.

There are more private schools in Lebanon’s education sector than public; there are over 1,600 private schools and 1,256 public schools. The extreme depreciation of the Lebanese pound means teachers have watched their salaries lose more than 98 percent of their value since 2019. Once considered a stable – if underpaid – profession, teachers are now struggling to meet basic needs as transportation, electricity, and medicine prices have all undergone three-digit inflation rates, placing them out of reach for huge swathes of the population. For example, as per the CLS report, the average estimated commuting cost per month last year was $128, and the average salary amounted to $131. The disparity has left many teachers unable to go to work. Some teachers had to resort to coping strategies, whether having to borrow money to cover their living expenses or seeking secondary incomes from jobs such as working in restaurants, sales or setting up online shops.

Brain drain

Migrating to teach abroad has emerged as one of the few viable options for Lebanese teachers. The 2022 CLS study estimated that three-quarters of teachers are planning to leave Lebanon. However, a skills gap is hindering some from meeting the standards required to teach at international institutions, and as a result many have reportedly been going back to university to pursue master’s degrees in education before traveling. In tune with Lebanon’s widespread data scarcity, it is difficult to source an exact number of teachers who have emigrated since the crisis aside from anecdotal evidence. However, Karim Bassil, a primary school teacher who moved to teach in Kuwait last year, tells Executive that his school and other schools in Kuwait have recently recruited Lebanese teachers, who with their education degrees and extensive years of experience are in high demand by schools in Gulf Cooperation Council countries, as well as Iraq, Egypt and Africa.

“The dire economic conditions and outdated Lebanese school curriculum have made education professionals feel out of place and unable to be innovative and creative in their teaching [and] this in turn motivated them to leave the country,” Bassil says. He adds that most of the teachers who have left are receiving wages ranging from $1,500 to $3,000, as well as house allowance and insurance from the schools they joined. Even with the financial boon, however, challenges remain, like adapting to a new education system and cultural setting, especially in non-international schools in the Gulf where Lebanese teachers had to adjust their teaching approach.

Those left behind

For teachers remaining in Lebanon, coping with what World Bank researchers called one of the worst economic depressions globally since the mid-19th century, has been a difficult task. Besides the aforementioned coping mechanisms such as borrowing and taking on a second or third job, schools have been witnessing frequent teacher absenteeism caused by the surge in transportation costs which has made the simple act of going to school complicated. Abdallah Bou Enek, an education activist and teacher at a major private school in Beirut, tells Executive that teachers have had to also offer private tutoring lessons or have set up a side business; an added stress considering the long hours which are dedicated to working at school. Bou Enek says teachers have stayed for one of the following reasons: a patriotic sense of duty toward the future of the country’s education, free tuition benefits for their children, or the inability to move abroad given the gap in their skills. After many teachers left for more profitable secondary jobs or to teach abroad, private schools have become unable to find and recruit new teachers, which has resulted in lower-skilled teachers filling the gap. “The teacher shortage, along with the economic and social challenges have led to a disappearance of the standards of education that Lebanon was known for,” Bou Enek points out. Some private schools have been able to provide better wages for the teachers by the dollarization of their fees, however, such measures were mostly witnessed in high-end schools that are known to host students from wealthy families.

Public schools, at the behest of the state, are in a complex condition. With salaries fixed by the government which has neglected implementing any financial support measures or legal rulings, the state sector is struggling to function. “We haven’t been able to open the school in a constant manner as not all teachers are able to give the needed sessions,” the principal of a public primary school located in one of Beirut’s working-class suburbs, explains to Executive. The principal asked not to be identified by name. Due to the ongoing strikes and limited capabilities, both teachers and students have been out of the classroom. The principal says that the school is trying to provide children with an education based on the available resources and capabilities, though this is not sustainable. Eventually, some form of external support will be needed for their survival. According to the principal, there are some schemes from local NGOs that have been working on supporting public schools, although this has been limited and mostly involves schools in remote villages.

The teachers syndicates’ fight for rights

Both the public and private school teacher syndicates have been working on pressuring both MEHE and operators of private schools for better work conditions for teachers. While each of the syndicates has its own problems and methods of dealing with the situation, both reportedly suffer from internal political divisions, do not have a clear vision of the future and have been unable to secure the rights of the teachers. Teacher strikes have always been a phenomenon in Lebanon and occurred even before the start of the 2019 economic crisis. However, this time the strikes come against a backdrop of school disruption from the pandemic, meaning students have been out of school for concerningly long periods. In January, the public school teachers syndicate announced an open-ended strike which has been ongoing. The head of the committee for contractual professors in public education Nisrine Chahine, tells Executive that teaching, “especially in the private sector has been looked down upon, and there has been a major inequality in the government approach to public and private education.” After several confrontations with the MEHE, Chahine was revoked of her teaching rights within the public school system. In this context, Chahine says, “We are being faced with disciplinary measures for simply asking for our rights, however, we must continue fighting for our rights no matter what happens.”

In the field of private education, Nehme Mahfoud, the head of the private teacher’s syndicate, called for a strike in March, although it lasted for only a few days and was limited to a few schools. He tells Executive that the strikes are a measure taken by the syndicate to pressure some private schools to give better wages or at least provide the teachers with temporary relief to help them cope with the crisis. As the situation does not improve, the syndicate is expected to continue calling for strikes. “Syndicates from all professions must unite and call for a national strike in order to pressure the political system and reach a sustainable solution to the economic crisis in Lebanon,” Mahfoud says.

The government position

A Lebanese man takes his children back home from school in a mixed Beirut district as some schools shut down on January 18, 2011 amid rising tensions in the Lebanese captial after doezens of young men appeared on the streets prompting fears of violence related to Lebanon’s political crisis, following the announcement that the prosecutor of the Special Tribunal for Lebanon filed his indictment on January 17 for the 2005 murder of former premier Rafiq Hariri. AFP PHOTO/JOSEPH EID (Photo by JOSEPH EID / AFP)

The MEHE has not yet formulated a strategy to tackle the challenges faced by teachers. Instead, it has only offered temporary solutions, such as financial compensations for public school teachers. One recent measure was a $300 support allowance that was supposed to be disbursed in two stages in March, along with a promised transportation allowance. However, as reported by the National News Agency, the distribution only partly materialized. The transportation subsidy was criticized while others alleged it was not distributed at all. Some teachers regard these compensations as a measure just aimed to avoid further teacher strikes.

Imad Achkar, the Director General of Education at MEHE, tells Executive that there is not a plan to solve the issue of teacher supply as the effects of the economic crisis, especially the depreciation of the Lebanese pound, have created obstacles which stand in the way of forming a sustainable plan. As the situation is worsening, Achkar and other figures from the sector are expecting a reform in the education system to take place by next year. The reform will most probably include the nationwide merge of public schools to ensure more efficiency and decrease costs, considering the number of half-empty public schools running at financial losses.

“Instead of having three half-empty schools in a certain area we can merge them into one with the best facilities and focus on it,” Achkar says. This move will indirectly remove the surplus of teachers in some public schools and will give priority to qualified and skilled teachers. Achkar acknowledges that Lebanon’s supply chain of teachers is in a critical position, especially since the number of people choosing to study teaching has dropped. For example, the Lebanese University, which usually has the largest share of education degrees students, currently has around 120 education students. He adds that well-skilled teachers have left the country, while the teachers who remain are shifting to other industries to make a living. The country will eventually face a total collapse of the educational sector if the economic and political situation does not improve, Achkar says.

Band-aid relief

Despite the critical position of public and private schools, answers to the problem are limited by a lack of funding. However, even when external financial support has materialized in the past, it has been reported that the MEHE and private schools have poorly managed funds donated by international organizations such as the United Nations and the World Bank. Experts have called on donor and funding organizations to form transparency and accountability mechanisms, such as producing public evaluation reports about funded projects, recruitment mechanisms, and spending and decision-making, to curb opportunities for misuse.

Amidst all the trouble, Antoine Medawar, the general director of Collège Saint Pierre in the rural town of Baskinta, was able to provide funding for the school during the past three years, and as such managed to maintain the school’s teacher supply. “There are three rules that a school director must follow to maintain the school’s teacher supply,” Medawar tells Executive. “The first one is treating the teachers with respect and dignity, [second is] making teachers feel as if they are partners with the school, and finally, giving them a salary that meets their basic needs.” The funds were provided in coordination with various NGOs, and to gain their trust Medawar followed a transparent approach. He gave these organizations access to balance sheets and invited them to visit the school to check the progress for themselves. In addition, the school is giving the donors a monthly report that includes the expenses, receipts and projects that it is doing. This approach has attracted many donors to come and support the school. But as the situation for education in Lebanon remains precarious, the options to confront such challenges might remain limited to private initiatives like Medawar’s, which lay the groundwork for continued positive action amid the crisis.

June 9, 2023 0 comments