Lebanon's AUB faces staff cuts and department closures over budget crisis

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Hind Al Soulia - Riyadh - The American University of Beirut is facing massive staff cuts, department closures and pay reviews as the impact of the country's current economic crisis and the global coronavirus pandemic are expected to shrink revenue by $360 million next year.

Describing it as the greatest challenge since the school was founded in 1866, AUB President Fadlo Khuri admitted in a letter on Tuesday that "most organizations do not survive such rapid and severe drops in revenue". But he sought to assure staff and students that the administration was working around the clock to save one of the region's top education institutions.

"Anything that is not deemed mission essential will likely prove to be a luxury that we can no longer afford, given the accelerating pace of Lebanon's economic meltdown, the Covid-19 pandemic, and the expected global economic depression," wrote Mr Khuri.

A demonstrator is seen next to a burning fire in front of a bank during a protest against growing economic hardship in Sidon, Lebanon. Reuters

A detained demonstrator stands near Lebanese army soldiers during a protest against growing economic hardship in Sidon, Lebanon. Reuters

Interior view of a damaged bank that was set ablaze by protesters in Tripoli, northern Lebanon. EPA

Lebanese people inspect a burnt out car of the Lebanese Internal Security Forces which was set ablaze by protesters in Tripoli, northern Lebanon. EPA

Anti-government protesters shout slogans during a protest against the collapsing Lebanese currency and the price hikes of goods, in front the central bank in Beirut, Lebanon. EPA

Anti-government protesters ride their motorcycles during a protest against the collapsing Lebanese currency and the price hikes of goods, in front the central bank in Beirut, Lebanon. EPA

Lebanese men inspect a burnt out car of the Lebanese Internal Security Forces which was set ablaze by protesters in Tripoli, northern Lebanon. EPA

Workers install metallic barriers on the facade of a bank as a protective measure against vandalism in Tripoli, northern Lebanon. EPA

Exterior view of a damaged bank that was set ablaze by protesters in Tripoli, northern Lebanon. EPA

Workers install metallic barriers along the facade of a bank as a protective measure against vandalism in the Lebanese capital Beirut. AFP

Anti-government protesters shout slogans during a protest against the collapsing Lebanese currency and the price hikes of goods, in front the central bank in Beirut, Lebanon. EPA

Lebanese riot control police watch as annti-government protesters gather during a demonstration against the collapsing Lebanese currency and the price hikes of goods, in Beirut, Lebanon. EPA

Anti-government protesters ride their motorcycles during a protest against the collapsing Lebanese currency and the price hikes of goods, in front the central bank in Beirut, Lebanon. EPA

A demonstrator smashes a window of a bank during a protest against growing economic hardship in Sidon, Lebanon. Reuters

In a dire warning of difficult days ahead, he added: "Make no question and have no doubts, everyone will be affected — from our senior leadership which will take significant pay reductions, to faculty members who have seen their buying power reduced..."

He said that for 2019/20 the university expected to raise $609 million but now anticipate a loss of $30 million. For the next academic year, revenue is projected to be $249 million – 60 per cent below this year's target. He said this year's losses would almost totally wipe out contingency funds that the university has built up.

"Under the best market circumstances, this deficit is beyond the capacity of the university to absorb for even one year. The economic situation in Lebanon is unlikely to change this picture for the better for some years to come."

The cuts, he said, would have to come from almost every area of the university.

"Steps we are exploring and will need to undertake are many. But they may well include the closure of an as-yet-undetermined number of programs and departments, the departure of a number of our community members, furloughs, a halt to capital expenditures, a near-complete cancellation of university-sponsored travels, leaves and conferences for the foreseeable future, and a review of the current benefits system," he said.

He said that management would now hold consultations with internal committees to draft a new budget to be presented on June 15 when more details would be given to staff and students in a letter.

The announcement caused shockwaves through faculty and students, with one of three staff members who spoke to The National saying it was "the worst crisis in AUB's history".

The university has weathered numerous emergencies over the years and remained open throughout much of the 1975-1990 Lebanese civil war, even as two presidents and a number of staff members were assassinated, kidnapped or killed.

Staff said that they knew the situation had been difficult even before the country's economic crisis reached a boiling point last October causing massive protests and freefall in the value of the national currency, but said they were surprised by the extent of the announcement.

While some praised the president's candour, others have objected to Mr Khuri's management of the crisis so far.

"I did not see any consultative efforts that include everybody's priorities. There is a big problem lying ahead," said one AUB employee. "Faculty members and students want to take part in the decision making before accepting sacrifices."

Another said, "the extended hand in Fadlo Khuri's last letter is rather hypocritical, coming so late in the process."

All three pointed to financial issues at the American University of Beirut Medical Centre as playing a part in the crisis.

AUB did not respond to a request for comment.

One source worried about the impact that a hiring and salary freeze would have on AUB's standing and reputation.

"We have faculty members already leaving the campus because of the pandemic and the crisis in Lebanon. If they leave AUB, it harms the university. We pride ourselves on being a leading institution in the region, but the reason we are in the top position is because of the research we produce," said the source.

But another source among faculty staff supported the management's approach to the crisis.

"Critics are not being responsible enough. They don't realise that we are not alone in this. All big universities in the world are trying to weather the storm," said one source.

He pointed out that some faculty members are trying to negotiate salary increases with management because of the falling value of the Lebanese lira making goods more expensive. But this, he said, is unrealistic.

"We are trying to adjust to protect students and faculty members. But some faculty members say that we cannot change tuition costs and at the same time, ask to be paid in dollars," he said.

The source said a brain drain from AUB was unlikely. "We have no option about packing up and leaving. The world is closing down," he said.

Mr Khuri's letter caused waves not only within AUB circles but also among the Lebanese community across the world.

Many have strong feelings towards the historic University which was ranked second in the region by QS last year, just behind King Fahd University of Petroleum in Saudi Arabia.

News of AUB's crisis upset Van Meguerditchian, 32, who studied at AUB and currently works as a journalist abroad.

"I grew up in a Beirut divided by the civil war and its imaginary wall. But AUB represented modernity and success. It was, in a way, the antidote to the war that devastated the city," he said.

Updated: May 6, 2020 06:12 PM

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