Nowhere has the influx of refugees been as divisive as in Lebanon. Open borders and free movement between the two countries meant that Syrians fleeing war and persecution in their own country could enter easily to seek protection and shelter. Initially, Lebanese people, especially marginalized communities in North Lebanon and the Beqaʿ Valley where over 60% of refugees fled, largely welcomed them and offered shelter in their homes.
However, as the peaceful revolution against the Asad regime in Syria erupted into a fully-fledged war with multiple actors and complex and far-reaching geopolitical consequences intimately linked to Lebanon’s political arena, Syrian refugees have been dragged into Lebanon’s perpetual political turmoil. The majority of Syrian refugees are no longer seen as low-income people fleeing persecution and war, but collectively as a burden or existential risk, which needs to be removed if Lebanon is to survive. In 2015, the Lebanese government began to impose labor restrictions on Syrians while some municipalities have enforced curfews against Syrians only.
As Lebanon is not a state party to the 1951 Convention relating to the Status of Refugees, the Lebanese government does not consider Syrians as refugees but as temporarily displaced persons, thus making their legal status uncertain.
But what is urgently needed at times like this is an objective look at the effects of the Syrian crisis on Lebanon, away from inaccurate assumptions and xenophobia which often divert attention from the real reasons for people’s discontent. To what extent can Lebanon’s economic and social woes be attributed to the approximately 1.5 million Syrian refugees within its borders and to what extent is the Lebanese political class to blame?
Since the Syrian crisis began in early 2011, a number of key reports and studies on Lebanon’s economy highlighted three interlinked layers in Lebanon’s socio-economic problems: the war inside Syria (and arguably the involvement of Hezbollah on the side of the regime) which has cut off vital trade routes and deprived Lebanon of access to an essential market, the actual physical presence of refugees which has increased the labor force by approximately 50% and strained the country’s infrastructure, and chronic poor economic and political governance by consecutive Lebanese cabinets, before and after the crisis, which failed to promote growth, create jobs and cushion Lebanese citizens from the effects of the Syrian war.
The impact of the Syrian crisis on the Lebanese economy
The IMF 2015 report on the Lebanese economy identifies the Syrian crisis as the “key determinant of Lebanon’s short-term outlook and longer-term prospects.” Given the vast increase in the local population, the Lebanese government is facing rising costs in healthcare, education, electricity, security, and decreasing quality in the provision of public services.
In its latest report, the World Bank has estimated that the direct fiscal impact of the Syrian crisis during 2012-2014 amounted to $2.6 billion (51.5 percent of Lebanese GDP) and that restoring to pre-crisis levels requires an additional $2.5 billion.
In May 2015, the last remaining Syrian-Lebanese trade routes were closed, further damaging export of merchandised goods to Gulf Cooperation Council (GCC) countries. This was subsequently subsidized by the government through the sea.
However, during the 3rd quarter of 2015, exports declined by 23.6% compared to a decline of 10% in May-August 2015. This has been coupled with low investment and diminishing consumer confidence. Lebanon’s traditional growth drivers – tourism, real estate and construction – have weakened considerably since the crisis and are unlikely to improve soon. The IMF estimated in its 2015 report that a return to potential growth of 4% is not expected before 2019.
Nonetheless, not all financial news has been bad. The 2015 IMF report on Lebanon notes that the foreign exchange and financial markets continue to be resilient, and non-resident deposits, on which the Lebanese economy is heavily dependent, remain conspicuous. Furthermore, the Central Bank has so far maintained adequate level of gross foreign exchange reserves. This largely explains why there has not been an economic collapse.
Part of the cost of the dealing with refugee crisis has also been met by UN agencies, international NGOs and donors. A joint study by UNHCR and UNDP estimates that refugee-aid packages actually boosted Lebanon’s GDP by more than 1%. Of the $800 million that UN agencies spends on refugees, 38% is injected directly into the Lebanese economy to procure in-kind humanitarian aid and food vouchers. According to the International Rescue Committee (IRC), a global humanitarian and relief NGO, cash assistance has had multiplier effects on the Lebanese economy: 1$ to beneficiaries is estimated to generate $2.13 to GDP for the Lebanese economy.Moreover, as the humanitarian focus of the crisis has shifted to long-term human development, which targets the Lebanese as well, host communities have benefitted from vocational technical training. The aforementioned World Bank report projects that while the spillovers of the Syrian war are significant, they will remain for now contained.
These recent IMF and World Bank studies, while acknowledging the significant toll of the Syrian crisis on the Lebanese economy, point to the chronic inability of consecutive Lebanese governments to provide sound political and economic governance, thus exacerbating the crisis.
Since the assassination of former Prime Minister Rafiq Hariri in February 2005, political divisions have resulted in the Lebanese parliament not ratifying a national budget. Since 2005, Lebanese governments spend through treasury advances and pass ad hoc measures when they are under pressure, which means that Lebanon essentially has no fiscal policy. With no national budget and no fiscal policy, there is a lack of proper oversight, deepening corruption and accelerating the siphoning of public funds.
The Lebanese MPs' near inability to pass legislation in recent years (except to illegally extend their terms twice in 2013 and 2014) and elect a president has led to the steady erosion of state structures. For example, one potential source of state revenue, the development of offshore gas fields, has not moved forward because the political class could not agree on a policy. Lebanese governments have also been unable to reform the heavily subsidized and grossly inefficient electricity sector, which is a huge drain on public finances.
According to the same World Bank report, even factoring in the Syrian crisis, Lebanon’s current account deficit suggests that the Lebanese economy has an underlying competitiveness problem. The disruption of traditional trade routes has only partly caused this deficit, as productivity and competitiveness were essentially weak before the crisis.
The national infrastructure, which has been strained by the influx of refugees, was already frail before the Syrian crisis. Lebanese citizens had to grapple with inadequate public services (especially in rural areas), including electricity shortages (up to 18 hours a day outside urban centers), dropping standards in public schools, and unaffordable government hospitals lacking the capacity to treat Lebanese citizens.
The refugee crisis has highlighted this inherent weakness, as overcrowding in areas where both low-income Syrian and Lebanese compete over resources at the local level put pressure on already substandard health and education services.Here we can already observe a distinction between the negative effects of the Syrian war (as opposed to refugees) on the Lebanese economy in terms of harming trade and investments, and the economy’s deep structural problems and lack of sound economic policies to create sustainable growth. The World Bank's latest report makes this last point clear: Lebanon’s poor governance and the vulnerability of the Lebanese political class to the geopolitical alliances surrounding the Syria War are a major factor affecting the Lebanese resilience to the shocks of the conflict next door.
Moreover, Lebanon’s foreign policy disagreements with the Arab Gulf countries, particularly Saudi Arabia, over Hezbollah’s role in the Syrian war and the GCC designation of Hezbollah as a terrorist organization have also had an impact on confidence in the Lebanese economy, which is dependent on Gulf tourists and investment. Last February, Riyad canceled a $4bn arms grant to the Lebanese army and security forces, and withdrew its deposits from the Lebanese Central Bank. During the same month, Saudi Arabia and the UAE also banned their citizens from travelling to Lebanon. The recent wave of expulsions that targeted Lebanese residents in the Gulf has further exacerbated the situation.
Refugees and Unemployment in Lebanon
The most complex and contentious factor when looking at the effect of the Syrian crisis on the Lebanese economy is the entry of tens of thousands of Syrians into the labor market which correlates with rising unemployment in Lebanon and general dissatisfaction amongst Lebanese workers and citizens. In a report issued in 2015, the International Labour Organisation (ILO) has said that competition over jobs is an urgent challenge facing host communities because of the increase in labor supply.
Syrian refugees are employed in predominantly low-skilled jobs in construction and agriculture, with smaller numbers in hospitality, manufacturing, cleaning, and maintenance. They generally accept lower incomes and work longer hours with no social benefits and decreased wages.
As mentioned before, most Syrian refugees live and work in historically marginalized regions such as North Lebanon and the Beqaʿ valley. By the end of 2014, the World Bank reported that approximately 170,000 additional Lebanese had been driven into poverty and that the unemployment rate had doubled to over 20% in comparison with 2011.
Cheap Syrian labor existed before the crisis, with approximately half a million to 1 million workers employed in the sectors mentioned above. Bilateral agreements between Lebanon and Syria in the early 1990s allowed the free movement of labor between the two countries, opening the door to underpaid Syrian workers to rebuild Lebanon after the civil war. It also allowed the Syrian regime to escape its unemployment problem.
Syrians, more so now, are deeply vulnerable to labor exploitation; 88% are paid 40% less than the Lebanese minimum wage, which is already unsustainable for Lebanese citizens.
The World Bank has noted that it is unclear to what extent low-skilled refugees have been competing with Lebanese nationals since prior to the crisis the low-skilled labor market was in general dominated by migrant workers. It is quite likely that poorly qualified labor which included Syrians before 2011 has suffered from increased competition from Syrian refugees after 2011.
In any case, the influx of Syrian refugees has driven down wages for both Lebanese and foreign low-skilled workers, worsening the preexisting poor working conditions in the unregulated informal markets.
It has also been difficult to find actual statistics that approximate the number of Lebanese who became unemployed because their job was given to a Syrian, or were fired and replaced by a Syrian. Lebanon has no established labor market information system and no official labor market needs analyses have been carried out since 20041.
Without this data, it is hard to realistically determine to what extent unemployment has been caused by the entrance of Syrian workers into the labor market, and to what extent it can be attributed to other economic factors such as the disruption of trade routes and low investments.
Another challenge is to measure to what extent Syrians have taken jobs from Lebanese in the informal sector, an essential sector in the Lebanese economy which is difficult to quantify.
Syrian refugees also cannot be blamed for the inability of consecutive Lebanese governments to promote job growth. A World Bank study estimated in April 2013 that even without the influx of refugees, the Lebanese economy would need to create 23,000 jobs per year to absorb new job seekers and spur growth, as opposed to the roughly 3400 it creates now.
The economy creates most jobs in low-productivity sectors, which employ low-skilled workers; high-skilled workers tend to leave Lebanon to search for jobs, as there is an oversupply of educated Lebanese and a lack of jobs. It is clear that Lebanon needs to move towards higher quality sectors to absorb its flow of highly skilled new graduates.In a nutshell, it is impossible to deny that the entry of a huge number of Syrian refugees into the Lebanese labor market has had a negative effect not just on employment levels but on the quality of employment.
However, focusing on Syrian refugees obscures the fact that Lebanese labor laws and the social protection system are insufficient to meet Lebanese workers and employers’ needs. There are no unemployment benefits and, despite the fact that Lebanese labor laws oblige employers to register employees in the National Social Security Fund (NSSF), many Lebanese workers are not covered by this fund; according to the 2013 World Bank report, 20% work in informal employment without contracts and around 30% are self-employed in low productivity activities.
Blaming unemployment and poor employment conditions solely on the influx of refugees who are grossly exploited themselves, creates the illusion that if refugees were to magically disappear, jobs would be available again. The aforementioned economic studies strongly imply that the Lebanese economy’s structural problems would still exist, and high-skilled workers would be unable to find jobs in Lebanon, thus continuing to seek opportunities abroad.
The information presented here is not by all means exhaustive. Rather, the aim is to challenge, with facts, a populist rhetoric that scapegoats the entire Syrian refugee population in Lebanon for a crisis of which they are the primary victims.
For example, comments on 26 June 2016 by Foreign Minister Gebran Bassil, who called on local police to routinely search Syrian refugees and ban them from opening businesses, were followed two weeks later by a video on social media which purported to show 40 blindfolded Syrian refugees being beaten by police officers.
Populist rhetoric, in Lebanon and elsewhere, is a diversionary politic: it seeks to deflect attention from the real causes of people’s discontent and direct it towards vulnerable social segments that cannot defend themselves.
The Syrian war and the refugee situation has uncovered the inability of the Lebanese political class to provide for their own citizens, many of whom were already vulnerable when the Syrian crisis erupted. This inability was made clear by the 2015 garbage crisis, eliciting public anger and mass protests.
The 2016 Lebanese Crisis Response Plan - a strategy developed by the Lebanese government, UN agencies, international and national NGOs to deal with the humanitarian crisis affecting vulnerable Syrians and Lebanese in Lebanon - clearly states that Lebanon cannot be expected to manage this crisis alone, and needs continuous international support. There is also no doubt that the international community should do more to help resettle refugees and thus relieve the burden on Lebanon.
Nevertheless, the Lebanese government must also transform its role into a more proactive one, implementing clear national policies that deal with the impact of the Syrian crisis, passing social and economic reforms that protect Lebanese citizens and Syrian refugees from exploitation in the labor market. For how can the Lebanese and Syrian people live side by side in mutual benefit in the event of peace in Syria, if so much hatred and resentment is sowed?
The author's views do not necessarily reflect the opinion of SyriaUntold.
[1st Photo: Syrian refugees at UNHCR's registration center in Zahle - Lebanon - 20-11-2014 (S.Hoibak/UNHCR via CC BY-ND 2.0)].