Syrians have driven up
remittances by 13 percent

World Bank estimates at
$8.9 billion for 2014

Lebanon saw a 13 percent increase in remittances to $8.9 billion in 2014, up from $7.8 billion in 2013, making it the world’s 10th largest recipient for the year, according to the World Bank’s Migration and Development Brief issued recently.

“It is critical that expats contribute to growth, especially since the economy has faced a slowdown in recent years,” said Salim Chahine, Professor of Finance and Acting Dean at the American University of Beirut (AUB).

The estimated rise in remittances might partly be due to remittances routed to Syrian refugees in Lebanon, as well as positive economic developments in destination countries like the United States, the report said.

“Remittances are flowing through supply by expats, generating higher revenues from improved economies in their countries of residence or through internal demand to support the country financially,” said Chahine. “The challenge is the circulation of this money and the need to find room to use it to promote growth rather than having it as deposits in banks,” he said.

Looking ahead, continued low oil prices could reduce remittances to the country from the GCC in the medium-to-long term, the report said.

“Continuous lower oil prices in the long term will definitely impact expats remittances from the GCC,” said Chahine. “The compensation through remittances from other countries in Asia, Europe, Africa, and the Americas will depend on the global economic perspective,” he said.

In the short term, however, the report said that significant foreign exchange reserves and strong fiscal positions could support current spending in GCC countries, thus delaying the negative impact of low oil revenues on migrant employment.

“The Government has to go into reforms in the near future to increase the Gross Domestic Product internally, so that the country stops relying so heavily on remittances for its growth,” said Chahine.

Remittances to the region are expected to grow to $55 billion in 2016 and $57 billion in 2017. Conflicts in the region are resulting in international displacement and forced migration across borders, and remain a major risk factor to the outlook for remittances in the region, the report said.