The World Bank has approved a $246 million new project to provide emergency cash transfers and access to social services to approximately 786,000 poor and vulnerable Lebanese reeling under the pressure of the country’s economic and Covid-19 crises.
The Lebanon Emergency Crisis and COVID-19 Response Social Safety Net Project (ESSN) is a three-year project which aims to arrest the increase in extreme poverty and to preserve the human capital of teenage children enrolled in public schools.
Based on World Bank estimates of Lebanese GDP growth and inflation rates in the first half of 2020, extreme food poverty rate reached 22 percent, and the overall poverty rate was 45 percent.
This translates to about 1.7 million people (350,000 households) falling under the poverty line, of which 841,000 people (156,000 households) are under the food poverty line.
The ESSN project will help the extreme poor and vulnerable in Lebanon through four components:
- $204 million in cash transfers through a pre-paid electronic card to cover an estimated 147,000 households.
- $23 million to combat risk of children dropping out of school through top-up cash transfers.
- $10 million to strengthen the capacity and systems of the Ministry of Social Affairs and its Social Development Centres.
- $9 million to support the creation and strengthening of social safety net delivery systems including building a National Social Registry.
Beneficiaries will receive all their cash-based assistance in LBP. The conversion rate for the loan funds is based on a preferential rate obtained for this project and equal to 1.6 times the Central Bank Sayrafa electronic platform of LBP3,900 per US dollar.
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The 147,000 extreme poor Lebanese households will receive cash assistance for one year. Eligible households will receive a monthly transfer of LBP100,000 per household member (capped at six members), plus a flat amount of LBP200,000 per household.
Simulations conducted by the World Bank suggest that if perfectly targeted, the project will result in a reduction in the poverty gap from 13.9 to 9.2 percent, and the extreme poverty gap from 5.6 percent to 3.6 percent.
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The World Bank said a severe economic crisis has led to a projected 19.2 percent decline in GDP in 2020, triple digit inflation and a projected increase in poverty to 45 percent and in extreme poverty to 22 percent. The situation has been further compounded by the Covid-19 and the devastating economic impact of lockdowns on jobs and livelihoods.
The Port of Beirut explosion on August 4 also resulted in the loss of lives and livelihoods, with damage estimated in the range of $3.8-4.6 billion.
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