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Distributional Impacts of COVID-19 in MENA
refugees has not kept up with the soaring levels of inflation, leading to minimal mitigation of the effects of the crises. Another issue is that Lebanon has large informal markets, with poorer workers in precarious employment conditions. Informal enterprises often have limited financial cushioning and would naturally resort to wage cuts and job cuts or suspensions in times of crisis (ILO 2020). Where governmental regulation may offer support to workers, informal workers fall outside the remit of such benefits. Given its ubiquity, unemployment in the informal sector affects the most vulnerable, including refugees. While some refugees have benefited from expansions in humanitarian cash assistance and food programs, which may have partially buffered the impact of the crises, most refugees have been forced into increased borrowing and reduced consumption.
Sensitivity Analysis Since food price inflation is considerably higher in Lebanon than overall CPI inflation (figure 9.1), and because the food consumption share of the consumer basket is likely to have become larger as a result of the economic downturn, this study also uses food price inflation to present an upperbound projection of the change in poverty. The results at the higher food price inflation show a larger increase in poverty than overall CPI inflation (figure 9.7). Indeed, they suggest that at this upper bound, poverty among the Lebanese population would have increased by around 35 percentage points and 47 points at the international and national poverty lines, respectively, by the end of 2020, and by 47 and 51 percentage points, respectively, by the end of 2021, compared with the baseline. These correspond to an increase of 1.8 million poor individuals by the end of 2020, up to 2.5 million poor individuals by the end of 2021, at the international poverty line compared with the baseline. At the national poverty line, these correspond to an increase of 2.5 million poor individuals among the Lebanese population in 2020, and 2.7 million by the end of 2021. For the Syrian refugees, under this scenario, poverty is expected to increase by 58 percentage points at the international poverty line and 29 points at the national poverty line by 2020, and 68 points and 31 points, respectively, by the end of 2021, compared with the baseline. In population terms, these numbers suggest that 863,000 more Syrian refugees fell under the international poverty line by the end of 2020, and up to a million did so by the end of 2021. At the national poverty line, an increase of around 440,000 poor individuals is expected by the end of 2020, and around 457,000 poor individuals by end of 2021, compared with the baseline.
