The economic cost of Syrian refugees in neighbouring countries

Friday 16/10/2015
A Jordanian soldier carries a Syrian child refugee near the town of Ruwaished, 240 km east of Amman.

Beirut - Middle Eastern coun­tries have urged the world to help them deal with the mas­sive influx of people fleeing Syria’s conflict. The refugees are exhausting resources in host communities although some ana­lysts say many Syrians are actually boosting some economic sectors in their new countries.

At the meeting of the Interna­tional Monetary Fund (IMF) and the World Bank on October 9th in Peru, a statement from a dozen countries in the region said they are facing heightened demands on domestic resources from the influx of refugees and internally displaced populations.

The statement was delivered by the United Arab Emirates’ rep­resentative on behalf of Bahrain, Egypt, Iraq, Jordan, Kuwait, Leba­non, Libya, the Maldives, Oman, Qatar, Syria and Yemen. “We call on the IMF to provide financing to the affected countries on conces­sional terms to mitigate these costs and to encourage more timely and adequate support from the interna­tional community,” the statement said.

While it is difficult to derive ex­act figures about the effects of Syr­ian refugees in Lebanon, it is easy to speculate, a banking source told The Arab Weekly.

“Banking deposit growth has re­mained largely stable amid the Syri­an turmoil but rose at an annualised pace of about 6% to a record $151 billion in 2014, according to central bank data. One can attribute much of the rise to deposits fleeing Syrian into Lebanon,” the source said.

There are tens of thousands of self-supporting and wealthy fami­lies renting apartments in Beirut, barely saving the sector, a tourism source said, although they seem to be spending cautiously on other things. “Others are manual labour­ers, not included in refugee fig­ures,” he said.

“The Lebanese economy has been growing beyond expectations over the past two years, with the World Bank estimating 2.5% growth in real terms this year, the highest growth rate since 2010 in the coun­try,” Massimiliano Cali and Samia Sekkarie wrote in a paper for the Washington-based Brookings Insti­tution in September. The Lebanese central bank estimates growth in 2015 year to be 0-1%.

Lebanon’s economy has been crippled by a political crisis, which has prevented its government from having general elections, due in 2009, and stopped its parliament, which extended its term twice into a full four-year tenure, from elect­ing a new president since Michel Suleiman’s presidential tenure end­ed in 2014.

“This economic resilience in the face of large inflows of refugees has been the case for Jordan… and Tur­key as well, with both economies growing consistently throughout the refugees’ inflow,” Cali and Sek­karie said.

Globally, the humanitarian re­sponse to the Syrian crisis is only half funded and aid organisa­tions are struggling to deliver pro­grammes. Many Syrian refugees have seen food support cut 50% in 2015 because of a lack of financing.

More than 4 million people have fled Syria since the conflict erupted in 2011. Jordan is estimated to host 1.4 million refugees, Lebanon 1.2 million and Turkey 2 million.

The United Nations and World Bank said in Peru on October 10th they would increase financing for the Middle East and North Africa to help countries deal with the mil­lions of refugees and rebuild after conflicts. They did not put a dollar figure on the initiative but set up a working group tasked with finalis­ing the plans by February 2016.

Speaking after the UN and World Bank announced plans to increase lending to help the region deal with the catastrophic spillover of con­flicts in Syria and beyond, Lebanese Finance Ministry Director-General Alain Bifani said the aid should be interest-free.

Bifani estimated the total cost at more than $15 billion — one-third of Lebanon’s gross domestic product. He said the world should consider taking in refugees a “global public good” that must be paid for or else host countries risk collapse.

Speaking at a UN summit on September 25th after adoption of sweeping new global development goals, Lebanese Prime Minister Tammam Salam said public infra­structure and hosting communities have been stretched “to the limit” while international assistance has been steadily declining because of so-called donor fatigue.

In the meantime, the Syrian refu­gees have decreased production costs partly due to lower labour costs in host countries, especially Lebanon, Jordan and Turkey. “Syr­ian refugees are offering to work for cheaper wages in unskilled jobs in rural areas,” a source with an inter­national aid agency said.

Although this is reported to have increased unemployment and pov­erty rates among the Lebanese, the source said the Syrians mostly take jobs declined by the Lebanese. “This is a major thing that cannot be overlooked,” he said.