BEIRUT: U.N. aid agencies will give preference to purchasing Lebanese products as it works to meet the needs of close to 1 million Syrian refugees in Lebanon in a bid to offset the economic burden of the crisis.
U.N. aid agencies have spent around $1 billion in aid to refugees in 2013, Deputy Special Representative for Lebanon and U.N. Humanitarian Coordinator Robert Watkins said following a meeting Wednesday with caretaker Industry Minister Freij Sabounjian.
The Industry Ministry in cooperation with U.N. agencies will advise Lebanese businesses on the procedures to participate in U.N. tenders to purchase goods for refugees, Sabounjian told The Daily Star.
Lebanese businesses which offer products on a par with foreign goods in terms of pricing and quality will be given preference over foreign suppliers, the minister added.
The ministry, in collaboration with U.N. agencies, will hold a workshop on Feb. 13 to inform Lebanese businesses on the procedures governing U.N. tenders, said Cristiano Pasini, a representative of the United Nations Industrial Development Organization.
Pasini, who participated in the meeting with Sabounjian and Watkins, said the workshop aimed at bridging the gap between U.N. agencies and Lebanese industrialists with regard to the tender procedures adopted by U.N. organizations.
Besides organizing workshops and seminars, U.N. agencies in Lebanon will establish information centers on their premises to assist Lebanese businesses willing to participate in tenders, Sabounjian said.
In the event that the U.N. requires products that aren’t manufactured locally, Lebanese importers would also be given preference to supply U.N. agencies with the needed good, Sabounjian added.
“This will also cut the transportation and shipping cost for U.N. agencies,” Sabounjian said.
Channeling funds used to purchase aid for refugees into the Lebanese economy could partially offset the economic burden of the Syrian crisis by increasing demand for manufactured goods and boosting the output of Lebanon’s industries, he said.
A World Bank report released last year said the Syrian crisis would cut real GDP growth by 2.9 percentage points each year over the 2012-14 period, depressing government revenue by some $1.5 billion while increasing state expenditures by $1.1 billion due to the surge in demand for public services.
The total fiscal impact of the crisis was estimated at $2.6 billion while some $1.5 billion would be needed for stabilization.
“The agreement reached with U.N. agencies today ... is very important for the Lebanese economy because it will help productive sectors sell their goods and encourage them to increase production,” Sabounjian said.
On top of increasing the fiscal deficit, the influx of Syrian refugees into Lebanon have resulted in increased illegal competition in the industrial sector that have hit a large number of Lebanese small and medium-sized enterprises.
A number of Syrian refugees looking for income to sustain their families have set up unlicensed small businesses on the outskirts of Beirut, according to several Lebanese industrialists, who said such workshops mainly offer paint, carpentry and furniture renovation services.
The lack of sufficient international aid and the deteriorating state finances have left the government with no option but to turn a blind eye to the issue.