Up to 170,000 Lebanese could slide into poverty due to the conflict next door, while unemployment could increase by as much as 10 percent by the end of 2014, according to a World Bank report, launched today in the Lebanese capital Beirut (but not yet online).
The refugee influx has led to a glut of cheap labour – often undercutting workers from already poor communities; pushed public-funded education and health services to breaking point; and caused rents to skyrocket.
The autumn 2013 issue of the Lebanon Economic Monitor entitled The Brunt of the Syrian Conflict follows the release of an assessment by the World Bank of the economic and social impact of the Syrian conflict on Lebanon, published last month.
Lebanon, a country of little over four million, has seen an influx of more than 800,000 refugees in the past two years, as an uprising against Syrian President Bashar al-Assad has morphed into an increasingly violent civil war. Many of the Lebanon’s already poor population have seen their financial situation deteriorate rapidly.
Ahmad, a 30-year-old from the city of Ba’albek in the eastern Beka’a Valley, said he used to earn between US$1,500 and $2,000 a month doing two jobs - including driving people across the Syrian border. Since the start of the uprising, the Beka’a has borne the brunt of the refugee influx, with over 200,000 Syrians registered with the UN Refugee Agency (UNHCR) in the scrubby, underdeveloped region.
Ahmad said his two regular jobs were cancelled and he now makes less than $500 a month picking up occasional work, hardly enough to feed his two children. He has reduced his daily working rates steeply to just $35 a day, but still refugees undercut him.
“Some of them take just $20 or $15; I can’t survive on that,” he says, pointing out that they often get support from the UN that locals do not. “If I am driving for a day, the petrol alone costs nearly $20.”
His experience is a common one. In total, the influx of refugees has increased labour supply by between 35 and 50 percent, the World Bank report says. In a stagnating economy, this has enabled employers to demand more for less - often firing local staff in favour of refugees who accept less pay.
“The impact of the crisis has moved in a major way, away from the purely humanitarian impact to the public and social sphere. There is a large and negative [economic] spillover,” Eric Le Borgne, lead Lebanon economist for the World Bank, said at the report launch. “For each of the conflict years, we found that growth has been 2.9 percent lower than [had the conflict not happened].”
The knock-on effect has been to push thousands of people into poverty, and to worsen the situation of those already poor. Prior to the conflict, the Bank estimated around 29 percent of Lebanese people - or just under one million people - were considered to be poor, defined as living on less than $4 a day. But by the end of 2014, that number will have risen by an additional 170,000, the Bank said.
In delivery of key services, the scale of the refugee influx has left inefficient systems unable to cope. The country already suffered from severe electricity shortages - with a pre-crisis average of 18 hours of electricity a day. By the end of 2014, Le Borgne added, this will fall to 16 hours due to increased demand from refugees.
Similarly, education and health services are being overwhelmed. Despite a staggering estimate of up to 81 percent of Syrian children not registered in schools, those that have are exacerbating the pre-existing trend of lack of space.
“The quality [of public services] has decreased for the average Lebanese,” Le Borgne said.
The Bank predicts the Syrian crisis would continue into 2014, and expects a minimum of 1.6 million refugees in Lebanon by the end of that year. This would equal 37 percent of the country’s pre-crisis population.
Ahmad stressed that he did not hold the refugees responsible for his fate: “You can’t blame them; it is just human nature [to want to flee the war],” he said. “The government is responsible. If you go to any organized country, their governments support their people. Here they do nothing.”
But the scale of the crisis (Lebanon hosts more Syrian refugees than any other country) means the Lebanese government can do little alone.
Former Minister of Finance Rayya Hassan, now a prominent member of the opposition Future Movement, pointed out at the launch that the report offered only two policy options for the government: restructuring key sectors of the economy and external funding.
“The two options are unattainable at this point,” she said, stressing that the country has been without a formal government since March, making donors hesitant to give. “I don’t think [external funding] is going to be forthcoming any time soon.”
In total, just to get the country back to its pre-crisis state, the World Bank estimated Lebanon needs $2.5 billion of largely external funding.
The UN and the Lebanese government have appealed for $1.2 billion and $450 million respectively to respond to the refugee crisis throughout 2013. To date, the UN and its partners have received 44 percent of their appeal for Lebanon, while the government has received none of its desired funding, according to UNHCR.