Expatriate Transfers Aid Lebanon’s Economy Amid Prolonged Crisis
(AWP) - Financial transfers from Lebanese expatriates constitute about 27.5% of the country’s gross domestic product, according to World Bank estimates.
This figure puts Lebanon on top of the region’s list (and fourth globally) in terms of the percentage of expatriate contributions to the domestic product.
However, Lebanese financial expert Imad Akouche says that numbers are disputed and do not reflect reality, as a significant portion of the transfers reaching the country are not registered through official channels.
Akouche explained, “The [gross] domestic product in Lebanon, according to the latest estimates and figures from the International Monetary Fund [IMF], ranges between 20 and 21 billion US dollars, while the external transfer from Lebanese expatriates to Lebanon is around seven billion dollars. However, there is disagreement about the accuracy of this figure due to the lack of a banking sector and official financial institutions that estimate and deal with this matter. There are many Lebanese today who keep their money in their pockets.”
Thousands of families in Lebanon rely on transfers from family members living abroad for their basic livelihood in light of the economic downturn, the collapse of the local currency and high unemployment rates.
Akouche added, “There is a real fear about expatriate transfers due to the lack of a sound banking sector, and if [Lebanon] is later classified in the grey zone, or if banking relations with the Lebanese banking system are severed, this will affect expatriate transfers to Lebanon, and they may completely stop.”
Lebanese Member of Parliament, Ghada Ayoub, stressed the importance of rebuilding confidence in the banking sector to ensure the flow of diaspora transfers.
She said, “The lack of trust, coupled with the [economic] crisis that has been going on for more than four years and the confusion over how to return depositors’ money, a large percentage of which belongs to Lebanese expatriates – we cannot talk about this money without starting serious reform steps.”
“The basic reform steps begin by defining the responsibilities in how to return depositors’ money, by the Bank of Lebanon, the state, and other banks, giving them hope about returning their money, and building new trust to make other investments.”