BEIRUT: A leading economist said Lebanon experienced an economic slowdown even before the influx of the Syrian refugees into the country.
“But the main factor behind this stagnation is the structural deficiency in the economic system and the lack of key reforms by the government, such as lowering the cost of production,” said Nassib Ghobril, Head of Economic Research and Analysis at Byblos Bank Group.
Ghobril’s remarks came during a conference held at the Adnan Kassar Edifice for Arab Economy focusing on the repercussions of the Syrian refugee influx into Lebanon on the Lebanese economy. The General Union of Arab Chambers organized the conference in collaboration with Rafik Hariri University.
Ghobril said that the Syrian crisis and the flow of refugees added to the Lebanese economic recession but that it could not be considered the main reason behind this slowdown.
“The Lebanese economy and consumers’ confidence are mainly affected by political or security problems,” he said.
He added that economic problems began to increase remarkably at the beginning of 2011 just before the massive influx of Syrian refugees into Lebanon. “It was mainly due to the toppling of the government of Former Prime Minister Saad Hariri,” he said, adding that the Syrian crisis had only added to the country’s economic problems.
Ghobril said that the growth rate had dropped from 10.3 percent in 2009 to 8 percent in 2010 and 2 percent in 2011 following the government’s collapse. He added that the Syrian crisis doubled the impact on the economy as the growth rate continued to drop in the following years to 1.2 percent in 2012 and 0.9 percent in 2013.
“I am expecting a growth rate of 1 percent in 2014 if the situation doesn’t deteriorate further,” he said.
He added that this huge drop in growth had translated to an economic loss of around $9.7 billion between 2011 and 2013 partly due to the Syrian crisis and structural problems in the Lebanese economy.
“These structural problems prevent the economy from being able to absorb any external shocks,” he said.
Economist Marwan Eskandar cited figures from a study published by the World Bank in collaboration with ESCWA and the Lebanese Cabinet on the negative impact of the Syrian refugees in Lebanon for the national economy.
He quoted the World Bank as saying that Lebanon needed to increase its expenditures by $1.8 billion over the next two years in order to cover the needs of the Syrian refugees remaining in the country.
“This figure is not very accurate because the study did not take into account the cost of constructing camps that meet the basic health and security conditions for these refugees,” he said.
“If you look at camps built in Jordan for this purpose, you’d feel ashamed of the ones available in Lebanon,” he added. “We have failed in securing camps for these people that would also help in improving the situation when it comes to rationing water consumption for instance.”
Adnan Kassar, Chairman of the General Union of Chambers of Commerce, Industry & Agriculture for Arab Countries, warned that the drop in the growth rate by 2.9 percent yearly from 2011 to 2014, as estimated by the World Bank, could push the unemployment rate up to 20 percent and at the same time put more than 170,000 Lebanese under the poverty line.
“There are also some other worrying repercussions for the public finances, education, health and infrastructure sectors that will contribute to an increase in the budget deficit by no less than 6 percent,” he said.