International aid to Syrian refugees has helped achieve limited growth in the Lebanese economy, according to the United Nations Development Program (UNDP) and United Nations High Commissioner for Refugees (UNHCR).
The study commissioned by both organizations showed that out of the annual aid package of $800 million in 2014, spent according to a structure obtained from four major U.N. agencies, around 44 percent of the aid was injected into the economy in the form of direct cash to beneficiaries.
These beneficiaries used the cards issued by U.N. agencies to buy food from Lebanese stores.
“The sectorial distribution of aid expenditures shows that the highest share of aid was allocated to food products (27 percent), followed by real estate, which includes rents (14 percent), chemicals, which includes pharmaceutical products (9 percent), education services (7 percent), transport (5 percent), clothing (5 percent) and health (5 percent),” the study said.
The study added that the injection of $800 million of aid in 2014 was reflected by an additional growth of 1.3 percent in the Lebanese GDP.
“In terms of the fiscal multiplier, the exercise shows that every $1 spent on humanitarian assistance has a multiplier value of $1.6 in the economic sectors,” the study said.
In other words, when the U.N. agencies disburse $800 million of humanitarian assistance, it is as if they were actually injecting $1.28 billion into the Lebanese economy.
However, the report admitted that although this aid helped mitigate the effects of the Syrian crisis, it had no positive impact on tourism and export, which actually contracted in 2014. It reported that the presence of Syrian refugees and the raging war in Syria had caused tourism to fall by 23 percent and exports to decline by 7.5 percent in 2014.
The study said that Syrian refugees inLebanon are putting extra strain on services such as water, electricity, waste disposal, primary education and health, while increasing competition for scarce jobs.
“The influx of refugees has actually deeply impacted the labor market, potentially increasing Lebanon’s unemployment rate to about 20 percent, against 11 percent in 2011 as per the IMF. More than 60 percent of refugees work in the low-skilled sector (agriculture, personal services and construction), and are willing to accept much lower wages than Lebanese workers,” the study said.
“As such, it is of utmost importance for the Lebanese authorities to devise a salvation policy anchored in a broad based national consensus in order to shield Lebanon from the potential risks tied to the inflow of Syrian refugees and secure sufficient financial and other resources to cope with the crisis,” the study said.
