Lebanon might be a tiny country with just over 5M population, yet it boasts one of the biggest diaspora population with 15M+ Lebanese living all over the world.
Lebanon ranks among the world top 25 inward remittance countries
Cost of remittances to Lebanon is amongst the 5th highest in the world
Inward remittances to Lebanon now account for over 35% of GDP
What are the benefits of remittances?
Unfortunately, Lebanon has been making the headlines for all the wrong reasons the past 2 years:
- Lebanon’s Legacy of Political Turmoil Complicates Its Debt Crisis
- Lebanon: one year after Beirut explosion, failing state struggles amid poverty and sectarianism
- The lights go out on Lebanon’s economy as financial collapse accelerates
Lebanon has now marked its third year since the beginning of a severe and prolonged economic depression, one ranked possibly amongst the 3rd biggest in the world according to the World Bank.
Lebanon ranks 21st in the world in terms of nominal remittance flows, and 1st in the region in terms of % of GDP
A remittance refers to a money transfer that is sent home, typically to family members, to provide financial support by a person working abroad. According to the World Bank, Lebanon receives almost $7 billion in remittances every year. A report by Knomad and the World Bank Group, Lebanon ranks 2nd in the region by total amount of remittances received, preceded by Egypt. The report also states that Lebanon ranks 1st in the region in terms of remittance contribution to GDP.
Top Recipients of Remittances in the MENA region by amount:
1. Egypt – $24.4 billion
2. Lebanon – $6.9 billion
3. Morocco – $6.4 billion
4. Jordan – $3.9 billion
5. Yemen – $3.8 billion
Top Recipients of Remittances in the Mena Region by share of GDP:
1. Lebanon – 36.3%
2. Yemen – 19.1%
3. West Bank and Gaza – 15.0%
4. Jordan – 9.2%
5. Egypt – 6.7%
Cost of remittances to Lebanon is amongst the 5th highest in the world
Lebanon receives most of the remittances from the Arab Gulf countries, accounting for 43%, followed by North America, Western Europe, and Africa. Although Lebanon is one of the largest recipients of remittance worldwide, the Lebanese diaspora still pay a very high fee when sending money back home. According to the World Bank, the average fee of sending money to Lebanon is 10.85%. On top of that, the Lebanese are paying a 2% fee upon cashing out. Today, the world average fee to send remittances stands at 6%. Despite all the technological advances, Lebanon is the 5th most expensive country in terms of remittance fees.
What are the Benefits of Remittances?
Remittances play an important role in the economic growth of developing countries. They increase the financial well-being and purchasing power of the recipient households. These households also use the remittance for human capital investments, focusing mainly on education, health, and businesses which aids in economic growth and reduces poverty.
The UN Member States have adopted in 2015 the Agenda 2030 which is the global agenda for sustainable development. It features 17 Sustainable Development Goals (SDGs) to eradicate hunger and poverty. Remittances’ contribution to these goals is invaluable. Here are a few examples of how remittances contribute to the SDGs:
· SDG 1: End poverty in all its forms everywhere
· SDG 2: End hunger, achieve food security and improved nutrition and promote sustainable agriculture
· SDG 3: Ensure healthy lives and promote well-being for all at all ages
· SDG 4: Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all
· SDG 6: Ensure availability and sustainable management of water and sanitation for all
· SDG 8: Promote sustained, inclusive and sustainable economic growth, full and productive employment, and decent work for all
· SDG 10: Reduce inequality within and among countries
In conclusion, Lebanon has been and will continue to be heavily dependent on the diaspora to survive through remittances and their benefits on our economy. Being one of the largest recipients of remittances in the world, Lebanon suffers from excessive fees imposed by traditional players in the market. Only through education and competition we can achieve a desirable change.
Written by: Mayssa Abillama
