x Abu Dhabi, UAE Thursday 20 July 2017

Lebanon economy suffers while expats choose to relocate abroad

After a steady rise, the level of money earned abroad by Lebanese expatriates and sent home has been stalled over the past couple of years, despite rising domestic instability and a spillover of Syria's ongoing turmoil.

After a steady rise, the level of money earned abroad by Lebanese expatriates and sent home has been stalled over the past couple of years, despite rising domestic instability and a spillover of Syria's ongoing turmoil.

Remittances to Lebanon reached US$7.47 billion last year, a decline of 0.8 per cent from $7.53bn in 2011.

The country received $4.95bn in cash sent home in 2004.

The latest figures have bucked a global trend of rising remittances and are attributable to three factors, according to Byblos Bank.

"Firstly, the level of remittances is high by itself," says Nassib Ghobril, the chief economist at Byblos Bank in Beirut.

"Secondly, expatriates who send this money home are also affected by developments in their current place of residence. Thirdly, the instability may have encouraged people to emigrate, with expatriates encouraging their families to join them in the diaspora."

Tensions in Lebanon have risen since the popular uprising seeking to unseat the Syrian president, Bashar Al Assad, reignited dormant yet highly explosive divisions in Lebanese politics.

The political fallout has sharpened the economic challenges facing Lebanon, after some Arabian Gulf states last year warned their citizens against travelling to the country.

The decision by the UAE, Qatar and Saudi Arabia to issue such guidelines cut much-needed tourism revenues for Lebanon.

"Lebanon is living on remittances," says Ramy Lawand, who works at a bank in Dubai and sends 4 per cent of his monthly income to his family in Beirut.

Lebanon's receipt of remittances is the second-highest among Middle East and North African states after revolution-stricken Egypt.

The monies are equivalent to 18.1 per cent of the country's GDP, earning it the ninth-highest ratio in the world, Mr Ghobril says.

On a per capita basis, it amounts to about $1,868 per year.

"The economy's stagnation continues," Mr Ghobril says.

"Consumer confidence is still at a very low level."

The Lebanese central bank governor, Riad Salameh, met Lebanese businessmen in Abu Dhabi in a bid in March to boost remittances home, a day after the prime minister, Najib Miqati, resigned amid political deadlock with Hizbollah, the Shiite militant and political movement.

"Lebanon is living a crisis," Mr Salameh said.

The country needs a positive political shock of the magnitude of the Doha Agreement to restore political stability and security conditions," Mr Ghobril said.

The accord, brokered by Arab mediators in Doha, put an end to an 18-month long political crisis among Lebanon's rival factions.

 

halsayegh@thenational.ae