President Khuri, Vice-President Belhaj, Excellencies, Ladies and Gentlemen, on behalf of HE the Minister of Finance Ali Hassan Khalil, it is my pleasure to be here today at this very exciting dialogue on preparing our youth and our economy for the future.
I would like to begin by thanking the American University of Beirut for hosting this dialogue, and thank the World Bank for prioritizing this topic. And Ferid: it’s always good to have you back in your adopted country!
Preparing for the future is no doubt a vital topic. What we will hear today from the authors of the World Development Report and the Education Reports is of critical importance to the MENA region and to Lebanon in particular. It is about how the jobs of the future will be different from the jobs of today. Interestingly, I had the pleasure of hosting HEC’s director Peter Todd yesterday to precisely discuss, among others, this issue and how to help Lebanon’s youth prepare for the major shifts ahead, which says that our region is interesting to a lot of people in this regard. As Ferid said, the world is looking at our capacity to create jobs.
We will also hear today how technology is disrupting the world of work as we know it. Technology is creating new opportunities – exciting ones. But for countries to be ready for these new opportunities, much needs to happen. For Lebanon to be ready for the future, we have to try to anticipate how it may look like, and which infrastructure will be needed to secure a competitive edge, and when and at what cost we have to have it in
place. Visionary policies have to be developed, a strategic plan has to be implemented, and regulations have to be
adopted. And before anything else, our human capital will have to be skilled, enthusiastic, confident, and ready.
Despite a very harsh rise in inequalities and a deteriorating environment, Lebanon can still pride itself with its human capital. One only needs to look around at the youth of this distinguished university that is always
working on upgrading its ability to cater for the future, as we just heard– and other
universities – to see that. Yet, we also know that on one hand, our economy is not
producing jobs for the highly skilled, and on the other, not all our youth are well-equipped or skilled for the job market and that many are being left behind. And we saw that our index per the World Bank Human Capital Index was 0.54 (out of 1), and our ranking was 86 out of 157 countries. The 0.54 means that when a child born today in Lebanon reaches the age of 18, she will be only 54% productive as she could be if we had a better performing education and health system. And despite the fact that some of us are challenging this ratio, which still requires fine- tuning, among others to define whether it includes refugee children or not, this remains a big loss for the economy and a social time bomb. We are in a world where whatever you learn in your first year at university can
become obsolete when you graduate, which means that we have to change, and change fast.
As a Government, we are committed to working on improving our human capital. This is why we agreed to be an “Early Adopter of the Human Capital Project” at the Annual Meetings of the World Bank/IMF in Bali, Indonesia last October, where I had the privilege to announce it and be part of the launching by President Jim Kim. During our
very interesting closed meeting, many great experiences were shared and success stories were told, including Jack Ma’s, which is very relevant to us. And Lebanon also had a nice story to tell, in addition to commenting on the Human Capital Index methodology.
And being an Early Adopter of the Human Capital Project means that we will firstly, assess why the productivity of our future workforce is not as high as we aspire it to be. Secondly, the government will put in place an “Acceleration Plan” to improve our human capital outcomes. Thirdly, this Plan will be put
together through a “whole of government approach”. That is, we will work together as Ministries of Education, Health, Social Affairs, Labor, Economy and Finance, as well as bring in private players and institutions and other
stakeholders. And I am hoping that the goals and the expected positive impact on Lebanon’s youth and future generations should be a strong enough motivation for us to work together in harmony, and rise to the challenge.
Ladies and Gentlemen,
The World Development Report, which will be presented to you now, also brings up two additional interesting aspects of the changing nature of work that complement Human Capital – which we as a Ministry of Finance find very important. The first is the need to deeply rethink social protection in the digital era. Digital will expand job opportunities but traditional provisions of social protection that are based on a steady wage job, clear definitions of employers and employees, and a fixed point of retirement will have to change. Our social protection system in Lebanon is already not reaching half the population. Hence, we must rethink how to provide coverage to all our population, but it must also be fiscally achievable and sustainable. For that, it needs to be fair and
far-reaching, and not be biased toward lobbies’ interests of all kinds, and this requires some political courage. But if we succeed in this, it could be a trigger toward higher fairness and better redistribution in our economy.
The second point is how can we create the fiscal space for public financing of human capital development and social protection? At a time when the fiscal deficit is flirting with the double digits in percentage points, this is a big challenge for us, but we must look at where inefficiencies exist in our current spending and reprioritize. As a matter of fact, not only can we achieve a wider fiscal space, but with some political courage and sound policies, we could bring Lebanon’s back to manageable deficit and debt, much higher productivity and competitiveness, and, key to all, to the level of governance that the Lebanese deserve, after so much suffering
and given the amount of generosity they have shown. It is time for us to make the right decisions and stop ignoring what should be fixed. Having a big potential is one thing, and allowing it to blossom is something else. This something requires a common vision, a strong and united leadership, and a great willingness to do the right thing at all levels. And seeing so many talents around tells me that it is going to happen, for sure.
World Bank and AUB Event,
November 30, 2018
Mr. Alain Bifani