Published daily by the Lowy Institute

Lebanon: Struggling on in the face of donor fatigue

Lebanon: Struggling on in the face of donor fatigue
Published 18 May 2016 

So often we hear calls for sensible and balanced debate on international migration, and so often we are let down by leaders and officials who deliver polarised, one-sided and sometimes toxic views. We know it doesn’t have to be this way and yet all too often the discussion and debate falls far short of reasonable expectations.

Occasionally we witness moments of how migration should be discussed: in moderate tones, drawing on accurate data and acknowledging both the positive and negative aspects. And sometimes we stumble across people who deliver reasoned and rational views of migration in the most unlikely places and on the most unlikely topics. 

A seminar last week at the Graduate Institute on the Economic Impact of Syrian Refugees in Lebanon was one such event. Raed Charafeddine, Vice-Governor of Lebanon’s Central bank, delivered a sober account of the toll the mass displacement of Syrian refugees has had on his country, and yet he also acknowledged the small but significant benefits it has brought. Most importantly, he painted a realistic picture of what the future could look like for Lebanon, and the 1.5 million Syrian refugees who have sought refuge there, with the assistance of the international community, if only that community could get over its 'donor fatigue'.

In terms of the devastating toll, Mr Charafeddine recounted the World Bank’s assessment of the impact the crisis has had on Lebanon, where  displaced Syrians now make up around one-quarter of the Lebanese population. The Lebanese economy has suffered a 2.9% decline in GDP; government expenditure has surged by $US1.1 billion due to increased demand for services; 170,000 Lebanese nationals have been plunged into poverty; unemployment has doubled to hit 20%; health costs have significantly increased and access to drugs has reduced (Syrians account for 40% of all primary health care visits); pollution and water-borne diseases are on the rise; the cost of electricity has jumped massively. These are just some of the impacts.

Even more grim were details of the manifestations of 'donor fatigue'. There are massive funding gaps and the international community is also disregarding calls for greater resettlement of refugees out of Lebanon. Between 2011 and 2016, Charafeddine estimated that a funding shortfall of $US3.7 billion has occurred. This is for a country with a GDP of $US50 billion, a total debt of around $US70 billion, and which is hosting the most refugees in the world on a per capita basis. Pledges toward the Lebanon Crisis Response Plan have been forthcoming but donors’ honoring of pledges more problematic. Worse still, Charafeddine admitted that traditional donors and supporters of Lebanon, particularly GCC (Gulf Cooperation Council) states such as Saudi Arabia, have not assisted at all. Commentators are concerned that an already weak Lebanon is being further squeezed as part of ongoing sectarian rivalry in the region, particularly between Iran and Saudi Arabia.

But, importantly, Mr Charafeddine also pointed some benefits. In terms of the economy, these include labour costs, given Syrians are prepared to accept lower wages, and rental incomes. Just over 80% of Syrian refugees currently pay rent, including for sub–standard accommodation. He also cited consumer spending, the growth in small and medium enterprises started by Syrians (such as bakeries, bistros, retail outlets and trades), and the subsidiary benefits of the expenditure of donor funding and consumer spending of UN and NGO workers. [fold]

The challenges, however, remain considerable, particularly given the political instability that has occurred alongside the displacement crisis. The focus now is on funding and implementing the Lebanon Crisis Response Plan 2015-16, with its dual priorities of supporting the ongoing humanitarian response and developing Lebanon’s crumbling public infrastructure, particularly in relation to education, health and water services.

In addition to a well-practiced call for donor funding and assistance, Mr Charafeddine ended with a cautionary note for the immediate region as well as Europe. He suggested that failure to assist Lebanon support Syrian refugees and overcome its current fragility may result in the next wave of asylum and refugee migration coming from Lebanon. The large flows to Europe in 2015 should be warning enough but parts of the international community are sometimes oddly selective about what they wish to acknowledge, let alone act upon. Lebanon, clearly, cannot be left to struggle on.

Photo by Ratib Al Safadi/Anadolu Agency/Getty Images

You may also be interested in