For Many Universities in Lebanon, Survival May Be at Stake

BEIRUT—The economic crisis that has plunged half of Lebanon’s population into poverty threatens the future of its schools and universities too, leading economists say.

“The Lebanese economy is in a state of clinical death,” said Alia Moubayed, chief economist for an investment bank. “The next government should declare a state of economic emergency.”

Walid Marrouch, an associate professor of economics at the Lebanese American University, agrees that “the future is very bleak as Lebanon suffers from a combination of economic and banking depression.” Institutions, including educational establishments, “are in an economic destruction mode,” he said.

“It is unlikely that banks which exist today will be able to survive, and the same applies to schools and universities,” Marrouch said. “I believe that the number of universities will shrink and just a few will be able to overcome the crisis.”

Lebanon is in urgent need of a comprehensive economic stabilization and growth recovery program to stop the hemorrhage that is draining its coffers and causing a brain drain among its youth and professionals, Moubayed said.

“The GDP shrank from some $50 billion in 2019 to less than $20 billion in 2020,” she said. “Inflation soared by 130 percent, along with the steep devaluation of the local currency, … and more than 50 percent of the Lebanese population fell under the poverty line.” (See a related article, “Lebanon’s Double Crisis Crushes Both Students and Universities.”)

Shift From Private to Public Schools

Although education is usually an expense on which Lebanese households do not compromise, an unprecedented number of families have transferred their children from private to public schools.

“There is a big trend of migration from costly schools to cheaper ones in both the private and public systems,” observed Adnan El Amine, a fellow consultant on education with the Issam Fares Institute for Public Policy and International Affairs at the American University of Beirut.

The cost of education “has become a heavy load on the parents after the economic crisis,” El Amine said. “Schools and universities don’t have the same educational facilities as before the crisis,” he  added, “and the quality of education has declined in all establishments regardless of their ranking.”

According to the Ministry of Education, some 40,000 students switched during the current academic year from private to public education. The difficulty of paying the fees of private education is cited as the main reason for transferring.

“The student population did not decline despite the economic crisis. Lebanon still has the highest ratio of students per capita in the region,” El Amine said. “However, the choice of university has become very limited for those who cannot afford costly fees.”

Concerns at the University Level

Lebanon has 48 universities and higher-education establishments, an unusually large number for a country with a population estimated at six million. (See a related article, “Lebanese Universities: A Battle of  Quality and Quantity.”)

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Universities are resorting to different means to sustain their operations, including layoffs of staff and faculty. American-affiliated universities seek U.S. aid and donor support, while Francophone universities receive French support. (See a related article, “University Professors Feel the Pain of Lebanon’s Worsening Crisis.”)

However, the Lebanese University, the only public university in Lebanon, and non-affiliated low-cost private universities have no funding from the bankrupt government.

The country has had only a caretaker administration since August 2020, when the last government resigned in the wake of a huge explosion that killed more than 200 people and devastated much of the area around the port of Beirut. (See a related article, “Beirut Blast Cripples an Educational and Cultural Capital.”)

“What might be seen as affordable education does not necessarily mean a quality education,” Marrouch said.  “I expect that many universities will either lower the quality of services they provide or simply cease to exist. Keeping a good standard is costly in normal times, it is more so in a crisis situation. In other words, students will get what they pay for.”

Consequences of Economic Decline

Meanwhile, Lebanon is heading towards a cash economy, which is globally associated with rampant poverty.

“Any modern economy in the 21st century cannot perform without a functional banking system,” Marrouch said. “Banks stopped playing their role as financial intermediary, pushing Lebanon into a cash economy whereby the pound’s value is determined by the cash market instead of banks and economic activity.”

Prior to the crisis, the World Bank classified Lebanon as an upper-middle-income economy, but it is expected to slip to lower-middle-income in the 2021 classification.

“The classification affects the future employability of Lebanese graduates in the region and globally,” Marrouch said. “There is anecdotal evidence that Lebanese working in the Arab Gulf are getting less pay than before, and this is largely due to the falling economic standing of Lebanon. The less the status is, the less the ability to negotiate better pay.”

Accordng to Moubayed, the first phase of any plan to achieve economic stabilization and growth recovery should include restructuring debt, establishing a single exchange rate for the dollar to curb black markets, and securing foreign financial support to inject liquidity and shore up the private sector.

Other necessary steps, she said, include reforming the public sector to increase efficiency and transparency and curb corruption, restructuring the banking system, and modernizing capital markets to attract private-sector investment in infrastructure projects.