The influx of refugees from neighbouring Syria is hitting Lebanon’s economy hard. <br/>With GDP growth slowing to 1 percent in 2012, the crisis is set to get tougher this year as the flow of migrants shows no sign of slowing
The issue of syrian refugees is becoming increasingly problematic in Lebanon. Recent figures from the Lebanese government show that a staggering 900,000 Syrians now reside in the country. This massive influx has had significant repercussions on the Lebanese economy.
Hamra Street is bustling with activity on this Friday night. People walk by fashion boutiques and beggars hustle for money – to the untrained eye it’s business as usual. Many of the passers by, including the homeless, are speaking a Syrian dialect, an indication of the inpouring of Syrian refugees.
“It’s hard to overstate the magnitude of the refugee crisis in Lebanon,” say Rima Abou Chakra, a journalist who also raises funds for Syrian refugees.
According to UNDP figures released last year, the average number of hosted Syrian refugees per Lebanese household reached eight in the Bekaa and seven in northern Lebanon. In addition, 51 percent of homes in the north hosted refugees for more than a year and, in some cases, a very large group of 25 individuals.
“The Syrian refugee crisis has had a significant direct and indirect impact on the Lebanese economy,” highlights Marwan Mikhael, head economist at BLOM Bank.
Among the indirect consequences linked to the Syrian refugee problem in Lebanon is the deteriorating security situation of the country, with cases of transnational weapon and fighter smuggling as well as border clashes increasing.
“The security angle is the first and foremost issue in terms of the country’s economic impact. The picture is blurry as to who is entering Lebanon, with the number of security incidents rising, which in turn has reflected negatively on the level of uncertainty. And one has to keep in mind that investors do not like uncertainty,” adds Mikhael.
The economist underlines that uncertainty has resulted in an estimated 50 percent decline in foreign direct investment (FDI) between 2011 and 2012, although accurate figures have yet to be released. A negative trend that further exacerbated the country’s overall economic slowdown was GDP growth shrinking from 3 percent in 2011 to 1 percent in 2012.
A lack of security in border areas, which have seen clashes between the Syrian regime and rebels, as well as the presence of landmines in farming land, have prevented local populations from accessing their agricultural lands or grazing lots. “We cannot work our land because of the constant clashes between the Syrian army and local fighters,” complains Abou Francois, who owns land in Qaa along the border with Syria.
Another indirect impact from which local communities are suffering is the drop in border smuggling activity and trade. “In Wadi Khaled and Ersal, smuggling was one of the main sources of livelihood for many families,” explains Raghed Assi, programme manager at the UNDP.
Article continued on next page