Before the Sun Sets on Lebanon’s Competitive Edge

Those of us in the business of higher education can no longer hide their concern, indeed their anxiety, over Lebanon’s rapid deterioration of hard-earned competitive advantage. Such advantage was gained over a century of hard work and solid achievements in education (K-12 and higher), and healthcare. We seem to be moving at an accelerating speed from leading the region to tailing it, with an ever-increasing gap that makes recovery and catching up considerably more difficult, if at all possible. Unless the tide is reversed, the sun may well be setting over Lebanon’s days of glory and leadership. This is a call for action while action is still feasible.

Gone are the days when the elite of the Arab World, specifically the Gulf area, would share happy memories of their school and university days in Lebanon, or how they and their loved ones found better healthcare in Lebanon than countries much farther afield. The list would include, inter-alia, heads of state, prime ministers, top physicians and engineers, business leaders, and opinion makers. Lebanon was a hub for education and healthcare at least half a century before the civil war and even the war years could not take this away. Suddenly, and with the onset of the current crisis, it started melting away before our very eyes. Some disturbing facts:

• Over 3,000 physicians and healthcare workers have already left the country and many more are trying.

• Healthcare delivery institutions are on the verge of bankruptcy with vexing problems of all sorts multiplying by the day. 

• Near total meltdown of local currency which has lost over 90 percent of its value since fall 2019.

• Serious exodus of highly qualified university professors and staff members who could no longer make ends meet on salaries that were eroded by inflation.

• By the same token, serious contraction of university budgets due to exchange rate chaos to the point of dysfunctionality. 

• Several major universities, including LAU, had to put a freeze on employment, salary increases, and capital projects, all extremely detrimental steps in the long run. Some, with endowments, also had to dip into their endowments to pay part of faculty and staff salaries in fresh dollars. This is obviously unsustainable. The biggest dilemma facing institutions of higher learning that are all tuition fee-driven was changing fees in local currency while their expenses have long been dollarized. The fuel bill alone for LAU is upwards of $10 million fresh dollars.

• Some of our institutions plunged into online delivery unprepared, which further impacted quality.

• The near-total shift to fresh dollars affecting every sector of the economy and adding further daily woes on most Lebanese.

What should be equally clear is that the same crisis that affected universities and hospitals also affected with greater ferocity K-12 Schools. Our feeder lines are as essential to quality higher education as any other strategic factor.

For three consecutive years, the K-12 sector has been crisis-ridden, often interrupted, and by any standard extremely chaotic. The lifeline and supply chain of our universities is giving increasing signals of being under more stress than it can handle. This is bound to seriously disrupt the value chain with enormous symptoms that are already apparent.

Some Visible Symptoms 

1. Faculty, physicians, staff and health workers depletion without the prospect of effective replenishing of human capital.

2. Low morale and a day-to-day approach to decision-making.

3. Local and regional employment bottlenecks affecting graduates due to economic as well as sociopolitical reasons.

4. Serious cracks in our business model(s) and financial viability issues getting in the way of long-range planning and sustainability.

5. Real shortages in conference, research and academic innovation budgets.

6. Across the board, inability to access resources necessary for the delivery of excellence. 

In Search of Sustainability

The relentless crisis of the past three years which seems pretty open-ended at this point, has revealed a fatal flaw in our business model insofar as major non-profit private universities are concerned. This fatal flaw relates to dependence in excess of 90 percent on tuition revenue for both operating and capital expenditure. It is also to be seen in the very few universities that have endowments to draw upon as a safety cushion against the meltdown of local currency. The de facto sequestering of local dollar reserves, and the odd situation of having your revenues in local currency while your expenditures are in fresh dollars add to the problem. Safety cushion or not, the bottom line is that the current situation is neither healthy nor sustainable. It poses multiple threats at varying levels of gravity.

A Scenario to Avoid

The entire higher education / healthcare sector is showing severe signs of stress that are getting dangerously close to the tipping point. Should it collapse, there will be incalculable damage to future generations and no illusions about chances for reversing the momentum. Lebanon will lose a century of leadership and plunge into an abyss with no visible bottom. Our universities will diminish, employment prospects will suffer, quality levels will drop, and a new cloud of marginalization will hang over our universities and medical centers.

A Call to Action

The doomsday scenario outlined above should be avoided at all costs. This is still possible should we manage to successfully implement a number of measures namely:

1. Major universities and medical centers working together to achieve economies of scale and scope not available individually to any of them.

2. Introducing specific measures such as student cross-registration, cross-institutional patient referral, and facility-sharing given that none of this exists at the moment.

3. Intensifying our joint efforts to apply for external grants from all sources available. This entails building partnerships with regional and international universities in pursuit of cooperative schemes.

4. Streamlining our academic programs and delivery modalities to optimize human resources and find ways to do more with less.

5. Building strong symbiotic links with industry locally, regionally and globally to leverage resources, stay connected, and practice much-needed synergy.

6. Elevating sustainability into a cardinal precept of all that we do including rethinking our business model(s), delivery strategy, healthcare system and our approach to academic planning.

7. Finding new sources of fresh cash outside Lebanon to sustain the operation at home. LAU is already taking steps in that direction.

This is a time to be brave and bold. The hour has come for out-of-the-box thinking where education becomes tantamount to innovation and healthcare delivery is elevated from a practice to a system. Hard-earned positioning is eroding on our watch and the moment to act is now before the counter-tide becomes irreversible. When survival is at stake, dare we procrastinate?