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The Syrian crisis that reached its 5th year in March 2015 persists to weigh on the economy of Lebanon. The parliament has still not been in a position to elect a head of state from May 2014 as its directive was prolonged two times in two years, for the initial time from the end of the civil war of 1975 to 1990. The cabinet, which is the final resort of influence, has been destabilized by domestic divisions and it appears to be struggling to evade a crash. Lebanon, a state comprising of several political and institutional challenges, has recorded 1.1 million refugees from Syria. Apart from several thousands of those not yet registered, this figure makes a quarter of the country’s entire population. Therefore, the influx of Syrian refugees has arguably assisted the Lebanese economy to resist the negative impact of its neighbor’s civil war.
Lebanon’s Policy Response to Syrian Refugee Flow
Lebanon has so far been considerably impacted by the Syrian civil war a great deal as compared to any other nation in the region. It has turned out to be a humanitarian crisis, an enormous load as well as a basis for growing concern. The country’s foreign minister Gebran Bassil stated that Lebanon’s identity and existence are in danger following the inflow of refugees. As at May this year, the number of refugees originating from Syria went up to about 1,183,327, making up an 18-25 percent of the entire population. Prior to the crisis, it was estimated that almost half a million Syrian migrants were taking part in the employment in state. Moreover, from the reports of the UNHCR, there are about 315,000 Palestine refugees and about 50,000 Lebanese returnees who ran away from Syria to Lebanon. Approximately 51, 000 Syrian children were born in Lebanon from the eruption of the Syrian war and about 36,000 of these children, do not have IDs.
As compared to other host states, Lebanese state approximates that the whole number of refugees as a bit higher, indicates that more 230,000 Syrian refugees are living in this country. For example, the head of General Security that is charged with the responsibility of registration and border management said that in January this year, the number of refugees in Lebanon went as far as 1.6 million. Even though in the preliminary period, several refugees settled in the northern cities of Tripoli and Wadi Khaled, at present they are scattered all over the state and are in the 1,500 localities.
The refugees originating from Syria have attached themselves to a Palestine refugee population, making the state of Lebanon to have a huge concentration of refugees per capita in the entire world. Nonetheless, Lebanon does not possess a tangible administrative or legal outline meant for the control of refugees. It has not yet endorsed the 191 Refugees Convention regarding the Status of Refugees, including its additional Protocol of 1967 that are the key worldwide legislation for safeguarding refugees. By not being a party to convention implies that the country’s law does not distinguish between refugees and illegal immigrants. Therefore, the state is restricted by the customary law doctrine and by the requirement of the human rights treaties. These requirements necessitate, at least the implementation of impermanent protection measures to guarantee the safe entry of refugees, to safeguard them, and to respect their fundamental human rights.
Lebanon seldom awards the refugee status to people within its periphery of discretion. UNHCR undertakes refugee status fortitude on the legal foundation of the MOU signed in the year 2003. This MOU outlines the areas of accord regarding status decision, long-lasting answers, mutual training, reception, temporary permits, expected information exchange, as well as the intensification of reaction capacities.
Lebanese government terms those individuals who ran away from Syria into the country as displaced, and not as refugees, even though several of them are seeking protection and they are expected to be welcomed by the refugee definition of the global refugee establishment. This restricted legal status of the Syrians has in most instances negative outcomes on their capacity to demand for their rights to aid and protection at the time of their crisis. The Lebanese state permits refugees to join public schools and institutions, and even healthcare after being admitted by the UNHCR.
Lebanon mostly implemented an open door rule for the refugees of Syria until the middle of the year 2013. Earlier, Syrian refugees were in a position to cross the border while having their identification cards. Dating back to the Lebanese and the Syrian independence of the years 1943 and 1946, respectively, their citizens were allowed to move without visa, but only by using personal identification cards. They were also in a position to live and work in Lebanon devoid of limitations, financial or administrative fees or charges. Because of the lenience of entry and the close family ties that developed between Lebanon and Syria, it was discovered that about 15 percent of Syria’s labor force worked in Lebanon. An estimate of about 500,000 Syrians used to work in the country, and usually migration was spherical as men would be in employment in Lebanon leaving their families back at their home country.
Before the conflict, the migrant workers from Syria typically acknowledged lower wages as compared to the Lebanese. However, both the Syrian and the Palestinian migrants experienced legal obstacles while looking for employment as Lebanon did not permit refugees, particularly the Palestinians to work. In February 2013, a resolution opened some occupations like those of sales, construction, and electricity to refugees. After the conflict, the Syrian migrant employees attempted to move their families to Lebanon. Nevertheless, Syrians do not possess refugee status, they have no right to employment, but they work unlawfully.
In the early part of the year 2013, Lebanese major command for border management, GSO started requesting the Syrian refugees to present suitable IDs, either a personal local ID or a passport, and to state their motive for their appearance at their ports. Those with damaged identification papers were not permitted to enter or register. Therefore the refugees are provided with admission card that functions as a residency through for 6 months from the date of admission. Those that did not arrive through an official post are in a position to legalize their presence. They are required to renew their visa after every six months for three years at any regional office.
Apart from the UNHCR several other parties offer humanitarian aid. Spontaneous aid is offered by host country, which is Lebanon, including Syrian middle class category that arrived earlier to the country as refugees. They offer clothing, shelter, and money. They also welcome the refugees into the relaxed economic life of the society. The Lebanese standpoint is referred to as ambivalent hospitality. Local practices of hospitality toward the refugees are broad among kin as well as non-kin Lebanese, intended to attract and support self-settled refugees. Nevertheless, for some time, labor market competition and the feeling that the refugees are being treated differently in terms of financial aid has created ambivalent antipathies and outlooks.
As compared to other nations like Turkey and Jordan, Lebanese administration determined not to establish formal camps for Syrian refugees to avoid providing an intuition that refugees were to remain permanently and also because of the earlier experience with the Palestinian refugees. The administration has essentially been apprehensive that Syrian refugees might perhaps alter the receptive ethnic and sectarian vibrant in the state and might perhaps facilitate a dispute between Lebanon and Syria. Several Lebanese political players attempt to hinder the creation of new resistance associations, which they deem probably risky for the stability of the nation and relations with neighbor states. The influx of Syrian refugees into Lebanon has had an influence on the nation in many respects, starting from social, politics, and economy dynamics. In our case, we focus on the economic aspects.
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Positive Impact of the Refugees on the Economy
According to some economists, Syrian refugees have also added up to the Lebanese economy. As an element of a project with the UNDP, Lebanese economist Hamdan Kamal approximated that the demand of the refugees created a 1.3% growth in the year 2014, which is higher than the 2% figure presented by the IMF. Refugees have so far been a significant source of demand for services that are produced locally in Lebanon, financed by their own savings, labor income originating from remittances of family and relatives abroad, and from international donors. In the latest report by the World Bank, an estimate of a further 1% rise in the Syrian refugees escalated labor service exports by about 1.5%. And the UN together with the UNHCR development program approximates a comparable economy-wide influence from the 800 million dollars that the UN utilizes yearly on refugees in the country. The Syrian crisis has ultimately pushed activity in the port of Beirut, because of the extreme reduction in activity in the Syrian ports of Latakia and Tartous. Therefore, the number of containers has realized an 8% increase in both years of 2013 and 2014.
Broadly speaking, according to most academics, these refugees are perceived to be highly skilled laborers, especially in the fields of agriculture and construction. Therefore, they are deemed as a productive force with the prospective to promote the economy instead of harming it, as presently believed by several. This type of rivalry between the host communities and the refugees created in the labor market is perceived by academics to encompass an affirmative influence on the economy of Lebanon, due to the provision of additional energy and endeavor to generate more jobs. Nevertheless, according to several academics, the government is not at present gaining from their skillsets, as some limitations have been put in regards to their employment. This action is illustrated by academics as deliberate in order to persuade refugees that are facing hard situations and without steady income to return to their country.
As anticipated, all of the municipal agents established that Syrian laborers are competing with the host communities, and as a result replacing them in tasks that ought to have been theirs, especially in the fields of construction, agriculture, as well as other self-employed spheres like taxi drivers and shop keepers. In addition, Syrian refugees are renting agricultural lands thereby reducing the land that could be utilized for agriculture. At the same time, this occurrence is enviable to several land owners since it generates extra income as compared to utilizing the land for food production, but it is viewed to pose negative influences on the general agricultural industry in the country.
The Syrian refugees like to be part of an urban setting in an effort to take part in the informal labor market. Living in camps was criticized by about all the refugees because it is in most instances related to limitation of movement that takes way the right to be part of the country. They also declared that the society and the state must recognize the advantage of the refugees as several of them are wealthy and learned members, who can considerably add up to the economic growth of the country. Moreover, the local people believe that the Syrian refugees are frequently applying too much on the infrastructure; and that the government is accountable for this.
Negative Impact of the Refugees on the Economy
Economically, the portrait is not dazzling. Even though a trivial recover was realized in the year 2014, with a 2% estimated growth, matched up against 1.55 in the year 2013, according to the IMF. And it was also 0.9% as reported by the World Bank, as the state still dragging behind the growth rates of more than 8% following the Syrian conflict. According to the IMF, growth will steady at this lower extent in the next two years and will not attain 3% before the year 2017. Debt persisted to grow, attaining about 70 million dollars or almost 145 percent of the GDP, one of the top rations globally, while inequality, unemployment, and poverty continue to escalate.
In Lebanon, the cost of tackling refugee crisis has been bigger comparative to the GDP, but much of it has been attained by utilizing funds offered by international donors and sponsors. Certainly, a latest study undertaken under the auspices of the United Nations finalized that refugee-assistance packages really boosted the country’s GDP by over 1 percent. Even though on the other hand, the overflow from the carnage in Syria has slapped hard the tourism, which is one of the country’s leading industries. In general, the UN study found out that the crisis in Syria has reduced Lebanon’s GDP by almost 0.3%.
With over 1.6 million Syrian refugees residing, a one-third of the entire population of Lebanon, a state that is already hosting almost 400,000 Palestinian refugees, is experiencing the hardest humanitarian, economic as well as social challenges in the history of its making. This demographic load leads to social dumping and antagonism in the labor market. According to the World Bank, among the express results, unemployment in the country has doubled over the last 3 years, attaining about 20% by the end of the year 2014 from the 8.8% of 2010, while wages have gone down due to competition, as the scramble for informal labor has gone high. In a survey carried out in 2013 by the Economic and Social Commission for Western Asia and the UN, 71% of Syrian refugees live below the poverty line, as three-quarter of them are unemployed. A loss of 14% of wages among less-skilled employees had been identified during the time, which deteriorates an already weak labor market in the country. According to the report by the World Bank Between the years 2005 and 2009, the state had established 3800 jobs every year, taking up only one-sixth of the 22,000 citizens who enter the market yearly.
In general, refugees are deemed to be a load on the state in terms of the socio-economic extent, particularly that the rise in population depletes natural resources. This can be comprehensively reflected in the employment feature, as unemployed refugees are de facto believed to be a load on the society, while employed refugees are perceived to be waging a competition with the host society members. This extra labor strength could promote both the refugee society and the host community, due to the fact that they would perhaps be undertaking a significant task in the productive economy. The country’s administration could utilize this dynamic, which not only promotes economic growth, but also relieves the tension between the local people. In fact, where states have guaranteed that policies implemented to tackle refugees go well with the global principles, and have acknowledged global assistance, economies have grown and benefited both communities.
In situations where refugee groups participated in economic growth, more incorporation with the host communities was realized and refugees were identified as part of the nation. While for the case of refugees living in camps, the place of the latter is in most instances in unattended areas of the state, hence while camp residents receive aid and care their fellow neighbors are overlooked, leading to a severe resentment between the two inhabitants. This escalating unemployment has also elevated the poverty rate. According to the World Bank report, it is perceived that 170,000 Lebanese, which is almost 4% of the total population, fall under the poverty line of less than a dollar a day for several years. This is in addition to almost 1 million countrymen and women, which is 25% of the population, and who were already living in poverty.
The effect of the enormous number of refugees is also felt in the quality of the services provided by the state that are so far poor, as almost 57% of public school students are currently Syrians. Refugees require over 26 million cubic meters of water, which is 7% of the total consumption of the country, and almost 300 megawatts of electricity. Prior to the Syrian crisis, Lebanon was already undergoing a yearly shortage of electricity of about 700 megawatts, with a local creation of 1500 megawatts, against a demand of a total of 2200 megawatts. The weight is also experienced in healthcare as both private and public hospitals have been beleaguered with refugees ever since the year 2011. In the year 2013, around 40% of primary-care and emergency services were provided to Syrian refugees, but this circumstance has altered a little bit since the time.
According to the report by the World Bank, this demographic load is interpreted into a financial one, as public expenditure went high by about 1 billion dollar for the years 2012 to 2014, while the deficit in revenues was approximated at 1.1 billion dollars and general losses associated with the crisis added up to 7.5 billion dollars in this era. Growing unemployment and escalating rents have already led to main occurrences, but there is an increasing antagonism as some isolated cases have taken place in Bekaa Valley in the last 12 months. There was also the incident of arson that was done in a camp, but these were associated with more Sunni-Shiite anxieties than to socioeconomic aspects.
The economic and financial effect associated exclusively to refugees is approximated by the central bank to be at 4.5 billion dollars per year. In the latest statement, the governor of the Banque du Liban by the name Riad, said that relying on a report by the World Bank, that Syrian refugees impose an express cost of approximately 1 billion dollar per year, including an indirect cost of 3.5 billion dollars. He expressed that the progress in the internal trade as well as consumption does not pay back for the costs sustained.
More expressively, the municipal agents revealed that the anxieties are felt due to the fact that several of the residents of the Lebanese host groups are completely conscious that Syrian refugees are not being charged for the basic services like water and electricity. Moreover, as previously stated, Syrian refugees are perceived as replacing local laborers in various spheres thereby leading to rising conflicts between these two communities. Nevertheless, one deputy mayor promoted the notion of the Syrian refugee entry into the labor market arguing that they actually must work in order that they do not have to cause chaos. In addition, the uneven allocation of assistance and refugee aimed programs are also worsening the increased extents of anxieties, as the host population deem that they are even being marginalized the more by the state and other funding organizations.
With reverence to the state officials interviewed, all of them decided that it would be best if the refugees are separated from the host community. They expressed that the host people do not want to acknowledge that refugees inhabit their towns and vicinities, particularly after the occurrence experienced in Arsal in the past few months. Moreover, in reaction to Syrian refugee admission in to the labor market, a senior state official agreed that there must be limitations on employment of Syrian refugees in an effort to control the economies of scale. On the other hand, the views expressed by the NGOs and the IOs agents varied typically from those who perceived that it is not practical to incorporate refugees in the host nation because of their distinct kind of life, and those who deemed that it is vital to incorporate them in urban settings so that they may feel a sense of welcome and belonging thereby increasing comfort.
Once again, according to the Nabaa residents of Lebanon, Syrians were portrayed as a danger to the community not only on an existential extent, but also, on in economic terms. They complained that their presence is leading to several issues like social problems, increased goods and services, rise in competition for jobs and increased rent. They expressed that the increase in rent should be blamed on the landowners because they choose to rent their homes to Syrians who pay extra since they live with more than one family in the same household. Similar issues were also expressed in the Sahel El Zahrani spotlight groups. Refugees were blamed for not paying their rent, as well as causing issues among each other and the Lebanese community.
On the other hand, the views of the state officials ranged from those that perceived the admission of refugees in the labor market as valuable to refugees and to the economy of the state; and those that viewed that refugee workers were taking over the jobs of the local people thereby leaving them vulnerable. According to one of the senior state officials, Syrian laborers must not be permitted to work outside the camps, if at all camps are to be set up. At the same time, the NGOs and the IOs claim that the inflow of refugees is impacting the host country because most of its areas are already poor and have been the same for several years. But they divulge that with regards to labor market, the refugees are reducing the anticipated salaries due to the fact that they agree to tasks for lower pay to meet their daily needs.
Demand for electric power in the country that has suffered daily outages, has increased by 27% in only one and a half years thereby straining state resources. It is widespread to hear on the streets that the prices of foods have increased as several Syrian refugees purchase bread. Rent prices have also escalated since several families seek shelter following an escape from civil war that killed over 70,000 people and millions displaced. Marwan Charbel, who is the interior minister, argues that refugees pose danger to the security of the country, and too much antipathy is growing against what several perceive that it is an escalating economic and financial load on the state. The wave of refugee has risen just as country’s economic slowdown strikes state finances.
After planetary growth of 8% per year from 2007 to 2010, expansion has dropped to about 2%, and the country last year posted its initial key budget shortfall from the year 2006, when its infrastructure was ruined in a war with Israel that took about a whole month. However, according to Chaaban Jad, a professor of economics at the University of Beirut, the Lebanese media, including that of the right groups mainly focus on the negative impacts of the refugees, arguing that they impacts are misplaced and overstated. He continues to state that while there have been strains on transport, hospitals, and electricity, the country has also experienced a considerably increased spending in destitute areas of the country where refugees live. He points out to the increased demand for goods and services as well as the thriving assistance as humanitarian donor groups come in to assist the refugees. Therefore a local economy has been established since people are spending money in these areas.
The country’s economy has suffered following several years of political disorder, Syrian conflicts between militia, a wave of abductions and plummeting tourism revenues. Inflation lingers at about 10% and its budget shortfall after debt repayments increased to 67 percent in the year 2012. In 2014, the IMF said policymaking by the state was a major worry more than the fallout from the civil war of Syria. The country recently sold 1.1 billion dollars of bond after several years, however, indicating that investors are dedicated to the nation.
An assistant professor by the name Jenifer Alix-Garcia, who has studied the effect of refugees on host countries in the Sub-Saharan Africa, puts that it is difficult to gauge the results of a bigger number of refugees, but there exists global trends. She expressed that a trade-based economy like that of Lebanon can swiftly fine-tune to a refugee inflow and even gain from their existence. Refugees make up a source of cheap labor as well as a source of demand for several other new things, even though their initial demands are shelter and food. She says refugees will pose a threatening effect by competing for local labor. Prostitutes, local laborers, and shop owners are all indicated as examples of jobs that are currently experiencing reduced wages. Nevertheless, they will offer a crucial source of demand for products like housing and food that could perhaps be useful for the country by motivating growth.
Even if demand for food increases prices, Alix-Garcia reiterates that this could perhaps be countered by free food supply meant for the refugees. Most of the refugees in the country reside with local communities instead of the camps like those of Turkey and Jordan. There are several thousands of wealthy and supporting families providing housing in Beirut, even though economists claim that they are spending carefully on other things since they are aware that the crisis will persist. Some of the other groups are casual laborers, and they are not in the figures of the refugees. Syrians are also said to be moving savings to the bank of Lebanon. At first during the start of the crisis in 2011, the market in Syria experienced an outflow of deposits. It is a common thing for Syrians to move funds. However, there has been a strange spike in deposits. But then, the Syrian crisis has negatively affected the economy of Lebanon in that it has led to blockage of export routes leading to an acute reduction in investor attitude as well as consumer confidence.
The refugee inflow has positioned a solemn load on the public service delivery including sanitation and education, including on the physical infrastructure that has lacked enough capacity. For example, since the children encompass more than half of the refugee population, education provision is vitally crucial. Education minister takes full task for the admission of the refugee children governmental institutions collaborating with the program dubbed Reaching All Children through Education. As at February 2015, over 106,000 children in public schools attended in shifts, either the first or the second shifts. The total expenditure cost of the country in the years 2012 to 2014 that catered for the increased demand for public services because of the inflow of Syrian refugees was about 1.1 billion dollars. Moreover, increased food prices and rent inflation became the constant issues in the state of Lebanon. The UN called for 1.89 billion dollars to support the country in tackling the crisis of refugees in the year 2014, but has so far acquired 242 million dollars.
Even prior to the crisis, 25 percent of the Lebanese population lived below the poverty line of approximately 4 dollars a day, the inflow of refugees deteriorated situations remarkably. The World Bank approximated that a further 170,000 Lebanese would perhaps fall into miserable poverty by the year 2014, and further predicted a 10% rise in employment. The Syrian refugees are always in competition for scarce opportunities with the Lebanese employees. According to the regional expert Khatib Lina, an estimate of one-third of Syrian refugee men are not employed at present, while the average salary for those employed make up to 40% of the minimum wage. This condition is made worse for women who are also susceptible to abuses. As matched up against Egypt, the Lebanese administration has not permitted Syrians to establish small business and enterprises and create their own profession in an effort to safeguard the host citizens.
Adding to the negative impact on public service provision and employment, the growth rate of the country has been declining because the collective influence of the crisis has reduced state revenue while at the same time escalating government expenditure. The World Bank has approximated that the effect of the crisis lowered economic growth of the country by about 2.9 percent per year from a forecasted growth rate of 4.4 percent in the year 2012 to 2014, as tourism income as well as foreign direct investment were predicted to reduce by over half as measured up against the earlier years. As more refugee inflow impacts the economy the more, the state is less expected to be in a position to tackle the economic influence.
As the vulnerability and needs degrees of both the Lebanese population and that of refugees increase, social tensions are escalating. According to a latest study carried out in Akkar and Bekaa areas among the locals and the refugees, more than 90% of Lebanese believe that the refugees are a threat to economy as they also cited an increased danger of violence between the two populations. Several of the Lebanese people demand limitations on the admission of the refugees into the nation because of the underlined load on the economy as well as the increasing security concerns.
In conclusion, analysts fear that Lebanon will in the long-run face a situation similar to that of Palestinian where a huge number of refugees will stay put for over a half a century following their mandatory displacement. Fabrice Balanche, a French specialist lately mentioned that Lebanon should be ready to sustain at least 1 million Syrians on its territory, if Bashar al-Assad will stay put in power. According to the latest report by the IMF, claims that there will be a slow but sure return of refugees starting in the year 2016, however, 30% of Syrian refugees will stay put in the country until 2019. Due to this situation and taking into consideration the growth totaling to 3.7% annually, unemployment would reduce to an estimate of 18%, as matched up against the present 20%. Even though there is a robust growth of almost 5%, unemployment would not be lower than 15%.
Away from the economic impact, the ultimate naturalization of Syrian refugees in the long-run would perhaps threaten the delicate sectarian equilibrium in Lebanon, thus making Sunnis- who at present consists of almost 25% of the population (compared to the present 30% consisting of Shiites)- more significant demographically. Given this circumstance, the Lebanese state determined at the beginning of this year to start regulating the labor market by making it a requirement for the Syrian refugee to provide a work permit. In order to renew their stay, Syrian refugees should at present be forced not to work or find an employer and surrender their refugee status. Some analysts perceive that these actions might perhaps, however, turn out to be counterproductive and promote terrorism or criminality. These measures emerge following the decision by the UN to decrease the monthly food vouchers for the last October from $30 to $20 per head in the country.
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