Open Letter to the World Bank

January 21, 2021

Is the World Bank response to the ‘deliberate depression’ suitable?

Dear Mr. Saroj Kumar Jha:

We, the undersigning below, members of the Collective of Social Protection Experts, are writing to the World Bank concerning the latest agreement on a loan for the Emergency Social Safety Net (ESSN).

In its Fall 2020 Lebanon Economic Monitor, the World Bank explicitly declared that the country ‘is in a deliberate depression with unprecedented consequences for its human capital, stability, and prosperity’. In echo with other international organisations, the World Bank has once again flagged bad governance and corruption as root causes of Lebanon’s political and economic failures and the incompetent state elite was accused of the compounded crises. In fact, the ruling  elite has continuously and increasingly trespassed and instrumentalised state institutions and laws in a policy making process which solely aimed at the distribution of rents, benefits, and spoils. Long standing state dysfunction and finally yielded multiple macro-economic, fiscal, monetary, and health crises in Lebanon. The August 4 Beirut blast has globally exposed the nefarious regime and the limits of the prevailing system. In turn, we are obfuscated to see that the same political forces are trusted with this loan agreement and its implementation. Needless to say that the ESSN will provide a breather for the current officials that we all believe has deliberately took state, society and economy in a down spiral, complicating our struggle for change, and jamming any urgent structural reform.

In the context of this, the limitations of the ESSN must be seen against the backcloth of social and political development. Lebanon has a hybrid, highly privatized, and fragmented system of social protection that is not rooted in broader social development strategy with clear goals. It has resulted in an inefficient and ineffective system that leaves a significant part of the population largely unprotected. Consequently, and even purposefully, citizens increasingly rely on services provided by non-state actors, thereby weakening even further citizenship and social cohesion. Therefore, the Collective, along with numerous international and national stakeholders, have repeatedly expressed that the only relevant solution to durable poverty, and most importantly inequality is the eminent and urgent foundation of a right-based universal social protection framework and any social assistance initiative must fall under this framework. As a matter of fact, in its Fall 2020 Lebanon Economic Monitor, the World Bank recommended the ‘approval of a National Social Protection Strategy’ as a first short-term step to mitigate the deepening of overall and extreme poverty. The strategy is to be complemented by the ESSN Program. However, the ESSN is currently presented as the only policy solution, regardless of the local and international voices opposing such a standalone program at this particular juncture.  

With staggering levels of poverty and projections of increase, the relevance of limited targeting schemes – even when broadened - becomes obsolete. Embedded in an ‘allotment state’, poverty targeting would intrinsically follow longstanding clientelist underpinnings in selection and distribution, increasingly weaken the relationship of citizens to their state. In praxis, we are uncertain whether the expansion of the National Poverty Targeting Program (NPTP) per the ESSN, in this same political context and lackluster governance, will succeed in addressing the shortcomings of the NPTP such as the limited coordination among the different units, opaque data collection and storage, exclusion and inclusion errors, over hiring of social workers, lack of an exit strategy, etc.  Moreover, some components of the ESSN overlaps and sidelines the relevant need and demand for compulsory free education and universal healthcare coverage, and creates an additional category/layer of beneficiaries within the current fragmented social assistance interventions in place. Unfortunately, the allocated budget will be distributed in the national currency according to a new exchange rate ($1 equivalent to 1.6 * 3. 900= 6.240L.L.), which deducts 30 per cent from the total fund  while the government of Lebanon is expected to reimburse the loan in foreign currency.

More significant outcomes require the expansion toward the universalization of social provision in Lebanon. However, the biggest constraint to universalization and pro-poor policies tend to be the lack of political will to confront the entrenched interest of ruling elite and embarking in structural changes, while instead resorting to the magic bullet of targeting which is easier to implement and funded by a generous loan that will become an additional burden in a highly indebted nation.

Finally, even if one-day poverty decreases in Lebanon, addressing the structural reasons behind durable and alarming inequality remains the principal approach against pauperism. In turn, we urge you to support the efforts exerted by national and international organizations that are diligently promoting the urgency of universal social protection today which we believe is an important step towards structural reforms, and the first step on the way to disentangle social policies from deeply rooted patron-client relations and the restoration of trust in state institutions which we deeply and urgently need to embark on.

We urge the World Bank to support a much needed universal social protection framework and cease its support to the deeply corrupted political class which are conditions to an imaginary of a new system of rule and more importantly a new society. A universal social protection strategy is a sine qua non condition for a complementary rather than a standalone ESSN which should be heavily guarded and secured with rigorous monitoring, total transparency, and much-needed accountability measures.