Published on Arab Voices

Spillovers from the Syrian Crisis Stretching Lebanon to the Breaking Point


Spillovers from the Syrian Crisis Stretching Lebanon to the Breaking Point

The conflict in Syria, raging into its third year, is devastating the country’s population, economy, and infrastructure.  The impact on neighboring countries, while less visible in the media, is nonetheless real and growing rapidly. At the request of Lebanon’s caretaker Prime Minister Najib Mikati, the World Bank, in collaboration with the United Nations, the European Union, and the International Monetary Fund, undertook an Economic and Social Impact (ESIA) Assessment of the Syrian conflict on Lebanon. The report, available here, was presented to the newly formed   International Support Group to Lebanon (ISG) at its inaugural meeting on the sidelines of the recent United Nations General Assembly.

As soon as we received the request for the assessment, the Bank mobilized all its sector teams—economists, human development specialists, fragile state and emergency experts, and infrastructure staff, in addition to other colleagues who made substantial contributions. Finding experts on such a short notice was a challenge in itself. In the end, colleagues from around the world arrived in Lebanon to assist in meeting this urgent request. Rapidly, the Beirut country office turned into a beehive. In all, 14 UN agencies (ILO, OHCHR, UNESCO, UNICEF, UNHCR, UNDP, UNESCWA, UNFPA, UN Habitat, UNRWA, UN Women, FAO, WFP, and WHO), the European Union, and the International Monetary Fund joined this World Bank-led impact assessment.  Each of the 11 sector teams worked at a frantic pace, lining up meetings with government officials, designing and running field surveys, collecting and analyzing data…all the way to the write up of the report and its printing and distribution to the ISG … with only one day to spare!

While the team had anticipated that the Syrian conflict was having a significant effect, as the results started trickling in, the full extent and depth of the impact on Lebanon’s economy, society, and public services became clear, sobering, and ultimately rather alarming. Our final assessment shocked government officials and Lebanon’s far-flung international friends. The generosity and open-border policy that builds on historical, economic, social, and political bonds between the two countries carries a heavy price tag for Lebanon. By 2014, the Syrian conflict is estimated to: (1) cut real Gross Domestic Product growth by 2.9 percentage points each year, leading to a cumulative loss in wages, profits, taxes, or private consumption and investment of   up to US$7.5 billion; (2) push approximately 170,000 Lebanese into poverty (over and above the one million currently living below the poverty line) and double the unemployment rate to above 20 percent; and (3) depress government revenue collection by US$1.5 billion while simultaneously increasing expenditures by US$1.1 billion due to the surge in demand for public services.

Beyond the immediate impact in terms of costs and losses, the Syrian conflict is also generating sizeable degradation in the access to and quality of public services in Lebanon. The numbers again speak for themselves: in the education sector, for the 2014 academic year, the team estimates that 57 percent of children in Lebanon’s public schools would be Syrian refugees, up from zero in 2011! In health, a sharp demand for health services is crowding health facilities. Cases of communicable diseases have surged in Lebanon and some diseases that were not present in the country have emerged. Deterioration in the quality of water, sanitation, and solid waste infrastructures is compounding health risks. The team calculated that an additional US$2.5 billion would be required just to restore these services to where they were before the Syrian crisis erupted.

Throughout the analysis and writing of the ESIA, the team was constantly reminded, on a personal level, of the severity of the situation and its real-life impact on Lebanon. This was not your typical report. We were working in real time, live, with daily reminders of the ongoing and escalating shock we were aiming to assess and quantify. The team started working on August 5. On August 15, a large bomb exploded in Dahieh, southern Beirut, killing 21 people. The brother-in-law of one of the security personnel in the Beirut office lost his life in the blast, and Wissam, one of our two new Economists who had joined the office that same week, was living one block away from the explosion. On August 23, two large bombs exploded outside mosques in Tripoli, Lebanon’s second largest city, killing 47 people and injuring 800. For one painfully long hour, Ibrahim, our other new Economist, could not contact his mother, whose house is located immediately in front of one of the two mosques. In September, a school in Beirut where some staff members have their children enrolled was closed for a day: a teacher had died of tuberculosis and tests were being performed at the school. As our health sector team stresses in the report, there has been a sharp rise in communicable diseases. Risks of epidemics are large and rising.

The findings of the ESIA show that it is high time for the international community to take action, bold action. The ESIA reveals that costs and losses are expected to escalate drastically in 2014. At some point, these impacts will become too much to bear. Lebanon is bearing an inordinate amount of the responsibilities that the international community has vis-à-vis the Syrian refugees and the conflict in general. It is long overdue for the international community to rebalance and spread these costs away from a country that has generously opened its borders but whose small population (4.3 million people) and land area (10,450 km2), carefully balanced confessional/inter-communal delineations, and weak public finances are being stretched to dangerous levels.

  ImageSource: UNHCR      


Sources: UNHCR and WB’s World Development Indicators.


Eric Le Borgne

Practice Manager for the Middle East and North Africa (MENA) in the Macroeconomics, Trade, and Investment Global Practice of the World Bank

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