Consultancy For Economic & Market Analysis - Lebanon

Background Oxfam is seeking an international and national consultant to undertake the research as a team. Individual consultants may apply separately and the work will be expected to be delivered as a joint effort. As the Syria crisis approaches the end of its fourth year, the impacts on neighbouring countries is increasingly apparent. Lebanon has been particularly affected with over 1.5 Syrians estimated to have sought refuge in Lebanon. The majority of these is found living in informal settlements or has moved to urban centres such as Beirut. This is in addition to existing long-standing Palestinian refugee populations living for the most part in official UNRWA camps, and who are also receiving Palestinian refugees from Syria (PRS) who have also fled the fighting into Lebanon (approximately 42,000 PRS are registered with UNRWA).   The Lebanese economy has traditionally been comprised of several key sectors including banking, agriculture, metal production, and transport equipment. The largest growth sectors have been tourism, construction, and domestic service with a considerable informal economy developing in those same sectors. The instability in neighbouring Syria and across the region as a whole has resulted in a dramatic decline of the tourist industry in particular, as Gulf Arabs – a large part of Lebanese tourists – have cut back on visits. Similarly investments from the Gulf in construction and second home purchasing has impacted on the construction economy – compounded by the increase in cheap manual labour looking to work in the sector. The agricultural sector – which was a net exporter prior to the Syria crisis – is now looking inwards to the Lebanese market to absorb national production, as well as absorbing increases in casual, predominantly informal labour. Yet economic data suggests the agricultural sector was already retracting prior to the Syria crisis[1], with a net reduction in jobs between 2004 & 2009.   Certainly the labour market appears to have been massively affected by the influx; however, the Lebanese economy has also seen restrictions in traditional export markets with, for example, border limitations and a reduction in land export routes through Syria resulting in a major drop in demand for agricultural produce – and subsequent drop in prices. This is matched by a drop in (manual) labour costs and therefore salaries and, in many cases, corresponding increases in unemployment particularly for those population groups who previously undertook lower paid, often manual/informal labour functions. As purchasing power has dropped amongst poorer parts of the population, housing costs – particularly rent – have risen due to a large increase in demand for low-cost housing.   The full socio-economic impacts of such huge changes in the Lebanese economy have been, to date, poorly understood. While the average man in the street cites inflation, increases in rent and living costs, and increasing unemployment, a limited number of formal studies have taken place so far to fully assess the economic changes over the last four years. Similarly, the rollout of a massive international aid operation – primarily focusing on a response to Syrians arriving in Lebanon – has also received limited attention in terms of assessing multiplier effects and potential positive and negative impacts on local and national markets. Related to this are national policies for employment, notably around employing Palestinians and, increasingly, Syrians. While longstanding cooperation agreements between Syria and Lebanon have historically led to considerable economic migration – often seasonal – between the two countries, with high numbers of Syrian agricultural and construction workers seeking regular employment in Lebanon – the Lebanese authorities are increasingly looking to restrict access to employment for Syrians in an effort to respond to concerns around Lebanese employment figures and deteriorating trends in popular sentiment towards Syrians in Lebanon.   The most recent unemployment figures for Lebanon – which on the most part exclude informal employment for groups such as Palestinians – indicate as many as 20% of Lebanese are currently unemployed and around 20% of Lebanese employed are in the informal sector. In some urban centres such as Tripoli, Lebanon’s second largest city, this rises to as many as 35% in a city where as many as 23% of the population are living on less than 2 USD per day. Youth unemployment is a particular concern. Indeed, the national youth unemployment rate is believed to be as high as 35%[2] - this is not limited to the poorer parts of society: university graduates are believed to face a 30% unemployment rate on graduation, with many leaving Lebanon for employment abroad. Amongst Palestinian youth, these figures can reach up to 46%[3].   Rationale Oxfam believes that humanitarian aid interventions have to be coupled with longer-term economic support if Lebanon is to continue to absorb the negative socio-economic impacts of the Syria crisis successfully.   A number of factors, not least economic, are increasingly contributing to a deterioration of quality of asylum for Syrians currently in Lebanon – this should be seen as directly linked to a deterioration of public service provision for Lebanese and Palestinian populations as a whole. There is increasingly a reinforcing dynamic between resource allocations & employment opportunities for Lebanese and a reduction in social cohesion between Lebanese and non-Lebanese communities: but also between Lebanese communities. Against a backdrop of regional – strongly sectarian – conflict dynamics, and Lebanon’s carefully balanced sectarian society, the current trends represent considerable risk for the country. However, while the impact of the Syria crisis is relatively recent, many of the trends or challenges to poverty reduction within Lebanon are longstanding. It is essential therefore that any attempt to respond is fully recognisant of historical trends and dynamics predating, but in many cases exacerbated by, the Syria crisis and refugee influx.   Any response also needs to be comprehensive, not only focusing on the basic needs of the poorest populations, but also helping the ‘less poor, at risk’(primarily Lebanese) groups – across sectarian and community divides - cope with the effects of what is essentially a reduction in resources against a massive increase in population. A focus on the particular challenges – and opportunities – for youth is anticipated, in both rural and urban settings where poverty rates and refugee presence are high.   Oxfam envisages undertaking such a response through strong engagement with the Lebanese private sector, and a specific focus on policy & governance implications (ie private sector and employment regulations, social protection legislation, particularly for casual labour/informal sectors). Specifically, we are seeking to understand a) historical trends and how the Lebanese market economy structure has changed and adapted to the economic impacts of the Syria crisis; b) what markets are currently functioning in Lebanon with absorptive capacity, and lastly; c) key systems and structures of 3-4 core markets within the Lebanese economy. The regulatory and policy framework to all of the above represent crucial aspects of this understanding.   Expected Outputs   1)      Overview of Lebanon’s economy, historically and as impacted by the crisis & population influxes   This is expected to cover questions such as:   -       What is the general situation of the Lebanese economy? What were the key trends prior to the Syria crisis? -       What are the key challenges to economic development in Lebanon (start-up, productivity, regulatory environment, market share, skill-sets, market access, investment...)? -       What have been the key changes over the past 4 years, including in the policy environment? -       Which sectors are functioning well in terms of production and trade? Of those sectors that have been most impacted are there parts that could be rejuvenated? Are there potential ‘new’ markets for development? -       What is the commercial trade situation? What are the cash and investment flows to support the private sector, and how are benefits re-invested? -       What is the situation of local production, industries, business and services –including business support services sector? -       What existing support & positive examples of support to social enterprise or small business innovation can be found in Lebanon? -       What is the situation of women and their power in markets? -       What are the risks and vulnerabilities including environmental aspects?   2)      Identification of 3-4 potential markets for engagement according to set criteria with the highest potential for positive change   This is likely to look at, among other things:   -       Sector targeting:  Select sub-sectors using set of criteria which could include some of the following; -       Which markets hold the highest potential for improving livelihoods & economic independence within the framework of support that OGB can provide? -       Are there market sectors and sub-sectors with unmet or growing demand according to potential buyers? -       Which of these market sub-sectors are the most attractive based on profitability, technical feasibility and strategic fit for the target group (short list)? -       Is there sufficient market demand in the selected sub-sectors to absorb the production of additional producers? -       What is sustainability potential for opportunity markets (thinking about eg impact of price fluctuations / impact of low private sector investment)?   3)      Markets System Analysis for 3-4 identified opportunity markets   This should include, for each value chain:   a) Value Chain analysis   -       Who are the key stakeholders in the value chain today and what are the profit margins in each step of the value chain? -       Identify key stakeholders whom we can work with to influence the market system. -       How the value of the product changes as it moves up the chain. Does the increase in product price accurately reflect the costs and risks at each step? -       What are the volumes of production and trade - the physical flow of commodities along the chain? -       What is the demand versus supply ratio? Are there opportunities to scale up? -       Identify capacity gaps in the market system (e.g. gaps on resources, skills, information, technology, infrastructure etc.)   b) Key Infrastructure, inputs and market- support services and Market Environment   -          How does the market environment, infrastructure and service provision influence the value chain? -          Are all market and financial services available (especially for women) to make the value chain work? -          Is processing capacity in the value chain available or able to be made available? -          Have the main risks in the value chain been identified?   c) Market maps for the selected markets   d) Oxfam staff on the job training in the Value Chain Analysis and gendered Market Mapping   4)      Preliminary analysis & recommendations for business development and livelihoods support, including pilot proposals for interventions   -       What is the potential for selected markets to improve livelihoods? -       What are the proposed intervention type, size and actors involved? -       How will the upgraded market maps look? -       What are the risks and assumptions linked to upgrading the market?     Expected Deliverables   -       Up to 100 pages total documentation of analysis and recommendations comprising 3 clear components as follows: Overview as per point 1 above Identification of 3-4 opportunity markets for livelihood development according to set criteria with the highest potential for positive change and in-depth Market Analysis for each as per points 2 & 3 above Preliminary analysis for business development and livelihoods support including pilot project proposals as per point 4 above Annexes including stakeholder consultations and mapping of actors engaged in the process Develop a long-term (3-5 years) and short term (1-2 years) plans to implement the recommendations Short (up to 25 pages) summary of findings suitable for publishing         Methodology    The consultant(s) is (are) requested to propose a detailed methodology for undertaking the above and delivering the agreed outputs.   However, we also anticipate a considerable review of secondary data; published guidance, reports on Lebanese economy and livelihoods, meetings with relevant stakeholder in the Lebanon economic and enterprise sector, in depth interviews with market actors and target population, and collecting and analysis of primary data where necessary.   It should be noted that other research studies will be happening along similar timeframes and of relevance to the above, notably poverty analysis, social protection and governance studies. Every effort should be made to coordinate   In country support & timeframes   Oxfam will provide support for in-country facilitation, translation where relevant, transportation, accommodation etc in addition to ensuring Oxfam staff time in support of the research – particularly our existing food security staff and programme managers. The timeframe for completion of the full research study is up to 5 months.   Oxfam is seeking an international and national consultant to undertake the research as a team. Individual consultants may apply separately and the work will be expected to be delivered as a joint effort. For further information, please contact REichholz@oxfam.org.uk [1] World Bank, 2014 - http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2... [2] July 2014 NCSR figures quoted in Lebanon media. Earlier figures – 2012-2013 – were nearer 25% [3] ANERA 2014