Lebanon’s financial woes eased thanks to holiday remittances

BEIRUT (AP) – Youssef Safouri wandered a noisy Beirut Christmas market, where the hundreds of families who flocked to stalls selling gifts from Lebanese designers belied a major economic crisis that has drained the savings of millions .

Safouri is among thousands of Lebanese who fled the country when its economy began to slump in late 2019. Now they have become a lifeline for families back home who receive remittances from abroad and cash brought in their suitcases during the holidays. Three quarters of the population are now plunged into poverty.

From his new home in Canada, Safouri, an accountant, gives part of his monthly salary back to his family to help cover skyrocketing monthly expenses, from private generator and water bills to rising food prices.

“Everyone is having a hard time getting their money out of the bank and trying to cover basic expenses at home,” she said. “I was forced to leave the country and my family to make money overseas and send it back.”

Lebanon will receive about $6.8 billion in remittances this year, up from nearly $6.4 billion in 2021, as they continue to be a key component of the country’s shrinking and battered economy. The World Bank estimates that they are worth almost 38% of the country’s gross domestic product.

Aside from remittances sent from overseas, many in the diaspora return during the holiday season, bringing much-needed cash dollars with them.

Interim tourism minister Walid Nassar said last month that the crisis-hit country expects around 700,000 people to arrive in the country during the holiday season, most of them of Lebanese origin. He estimated they will bring in about $1.5 billion between December and mid-January.

Beirut International Airport is expected to receive 6.1 million tourists this year, about 400,000 more than in 2021, with daily arrivals doubling during the holiday season.

After Lebanon’s financial meltdown more than three years ago, banks essentially locked out depositors from their savings as they suffered tens of billions of dollars in losses. The country’s mismanaged economy has been mired in corruption and wasteful spending for decades.

Before its fragile economy collapsed, Lebanon had a sizable middle class that was able to spend money celebrating Christmas and other holidays with family.

The crisis has forced a drastic change in lifestyle for most of the country, unable to afford skyrocketing costs for Christmas gifts and celebrations.

Farah Jurdi, a mother of two, says her husband’s work in Saudi Arabia over the past decade has been crucial for her to avoid having to compromise on her children’s quality of life. With the economic crisis, he has become even more critical, as she also helps her parents and siblings with their shopping.

“I always worry that one day I have to go back to Lebanon, because life will never be the same again,” she said.

Remittances have become necessary not only to celebrate the holidays, but for many families in Lebanon, they cover the most basic household expenses, said Mohamad Faour, assistant professor of finance at the American University of Beirut.

“Prices are steadily returning to pre-crisis levels, but wage increases are nowhere near these levels,” he said. “Someone earning a salary of 5 million Lebanese pounds (about $113) cannot afford a generator bill unless some relative sends him US dollars.”

At the Christmas market, which was filled with hundreds of families strolling the maze of decorated stands and enjoying live music, most refused to talk about the remittances they receive from relatives abroad and the changes in lifestyle that they had to endure.

But the organizer of the event admitted that they had to do what they could to make their Christmas market more accessible this year. They included more affordable pop-up gift shops and reduced entry fees for children.

“People living in Lebanon need a breath of fresh air or a change of scenery,” organizer Cynthia Wardi said.

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