Beirut

- The 57-year-old citizen, Yahya Al-Agha, lost his carpentry work at the beginning of 2020, coinciding with the intensification of the economic crisis in Lebanon. After nearly 30 years of toil and fatigue, he did not reap enough money for the "dark days we live in", as he put it to Al Jazeera Net.

Al-Agha complains of his suffering “in a country where workers are arbitrarily dismissed from their jobs without compensation or legal prosecution,” making him unable to provide for his family’s living requirements.

But what helps him to be relatively resilient is a remittance of $100, which he receives monthly from his expatriate son in one of the Gulf countries, and it has become equivalent to more than one million and 750 thousand pounds, after it was equivalent to 150 thousand according to the official exchange rate (1500 pounds) before the fall of 2019, while His salary from his work was one million and 300 thousand pounds.

Since the Agha became unemployed, he waits for this transfer every month to be exchanged on the black market, in order to cover his family’s dues, and it is hardly enough for him in light of the chaos of prices in the markets, which forces him to borrow as well. There is no possibility for us to continue to live without his financial transfers.”

This man is one of hundreds of thousands of Lebanese who have been wracked by the collapse, so they are either unemployed, or the value of their salaries has been choked and they have lost more than 90% of their purchasing power. Their historical ordeal. Will the remittances of expatriates contribute to alleviating the impact of the great collapse that besieges the Lebanese?

Expatriate remittances

Historically, and specifically after the end of the civil war (1989), the waves of emigration expanded from Lebanon to various parts of the world, so what was known as "expatriate money" emerged, which generated a kind of secondary economy, and contributed - albeit partially - to the advancement and support of the social safety net during Turning points experienced by the country.

In a small country with a population of about 4 million, the number of expatriates exceeds 1.3 million, according to researcher Mohamed Shams El-Din.

In recent years, the waves of emigration recorded a noticeable decline, although it has become the dream of young Lebanese aspiring to build a stable future away from the turmoil and tragedies of their country.

In 2019, the number of immigrants reached about 66,000, and decreased to about 17,000 in 2020, and in the first five months of 2021 only, it recorded about 27,000 immigrants, according to Shams El-Din Al-Jazeera Net.

This decline is linked to the repercussions of the Corona virus on the global economy and the subsequent collapses in most countries. Economists also consider that the deterioration of the value of the lira negatively affected the work of the Lebanese in the external market, and thus decreased their ability to negotiate to improve their working conditions with institutions and employers.

While remittances previously enhanced the welfare of the Lebanese and financed their internal consumption, with the economic crisis reaching its climax since mid-2019, these funds constituted a kind of immunity for tens of thousands of families whose lives were turned upside down with price inflation, and the scarcity of basic materials such as fuel, medicine and food, after they More than half of Lebanon's population has become poor, including 25% below the extreme poverty line, according to estimates by the World Bank, which ranked the Lebanese crisis among the three worst crises the world has known.

Lebanese expatriates focus on transferring money to their families through non-banking institutions (Reuters)

Transfers by numbers

Between 2017 and 2019, the remittances of expatriates officially amounted to about $8 billion annually, and it may reach double this value because there is money that comes in cash through travelers, especially from Africa and the Gulf countries, according to Shams El-Din, and in 2020, the value of official remittances reached about 7 billion dollars, and actually exceeded 12 billion dollars.

The Lebanese expatriates focus on transferring money to their families through non-bank institutions, which amount to about 5 companies in Lebanon, especially after commercial banks took exceptional measures since the fall of 2019, when they seized the Lebanese dollar deposits, including the deposits of expatriates.

Tawfiq Moawad, Chairman of the Board of Directors of the Money Transfer Company "OMT" - which receives about 85% of external remittances to Lebanon - explains the frequency of monthly transfers, and confirms that about $110 million arrives per month through the company to about 170,000 families who receive them regularly. monetary.

The average rate of remittances, according to Moawad, is about $550, but 50% of them are worth less than $300, and about 8% of remittances worth $50 are sent abroad by people with limited incomes.

And the 50 dollars became more than the minimum wage in Lebanon, which amounts to 650,000 pounds (about 37 dollars), after the dollar exchange rate on the black market (which controls the value of the national currency) jumped to 18,000 pounds, a new unprecedented record that is expected to rise, which led to a widening Chaos and the patch of popular protests in the country.

And Moawad points out - in his speech to Al-Jazeera Net - that the money transfers come from about 160 countries in which the Lebanese live, and residents receive them on various Lebanese lands from north to south, with the presence of more than two thousand branches of the offices of money transfer companies.

As for the countries from which Lebanon receives most remittances, they are, in order, as follows: America, Canada, Australia, then the Gulf states and the European Union, according to Moawad, noting that when the port of Beirut exploded on August 4, 2020, the remittance rates rose to about 140 million dollars per month. , an indication of the level of solidarity of expatriates with their families, but where are these imports spent in a country whose currency is collapsing due to the scarcity of the dollar?

The supply of the dollar in the market reached its lowest level, which led to the inflation of the money supply in lira (Reuters)

imports

In fact, it seems that the dollars entering Lebanon are now spent only on consumption of essential basics of living, which are scarce day after day in the Lebanese markets, according to what the academic and economic and financial expert Elie Yachoui indicates to Al Jazeera Net.

Yachoui considers that these transfers no longer constitute a positive factor contributing to economic advancement, in parallel to the severe shortage of basic materials, such as fuel, medicines, medical supplies and foodstuffs.

The researcher returns to the banking crisis, as the root of the problem, since about 120 billion dollars of deposits in hard currencies evaporated, “in a systematic robbery of the savings of the Lebanese, and less than 15 billion dollars remained in the form of mandatory reserves with the Central Bank, while it is their right to depositors."

Yachoui holds the responsibility for this great collapse of the Governor of the Central Bank of Lebanon, Riad Salameh, with successive governments, and the Ministry of Finance in particular, given that the ministry was setting public budgets, and drawing up financial policies, as the Central Bank was drawing monetary policy by fixing the exchange rate of the lira for decades in order to achieve These policies contributed to the disruption of investment, the accumulation of debts, the collapse of national capital, the reduction of job opportunities and the forcible “displacement” of Lebanon's youth for economic reasons.

Over the past years, according to Joshua, the pillars of the authority took advantage of favorable economic conditions for them, and benefited from external sources of funds, especially since the remittances of the Lebanese were overflowing with what their families needed, so they deposited them in their bank accounts to take advantage of the high interest.

Yeshuai divides foreign imports into three sources:

  • Arab and Gulf investments in Lebanon were estimated at $5 billion annually.

  • External borrowing carried out by successive governments - from Arab and Western countries, donors and through international conferences - to finance projects that did not achieve their goals of economic advancement.

  • Remittances of expatriates to their families.

After the resources of the first two sources dried up, there was nothing left but the remittances of expatriates, which are spent only on individual consumption, in a country that lives in severe shortage and scarcity of everything, “while it cannot do without an abundance of hard currency,” according to Yachoui, in light of its import of more than 80 % of his needs.

The researcher points out that the supply of the dollar in the market reached its lowest levels, which led to the inflation of the monetary mass in pounds, as the state alone needs about 12 thousand billion pounds per month as wages for its employees in the official sector.

Before 2019, the money supply in the market touched about 6 trillion pounds, but today it exceeds 40 trillion pounds, while there are no dollar reserves that grow in parallel.

Yachoui believes that the practical solution lies in the Lebanese recovering their entire deposits in dollars, to create a kind of balance in the money market, after the dollar exchange rate entered the stage of breaking free from any ceiling.

He said that there is no hope for any internal party capable of curbing the collapse, and that the only option remains in international accountability of the ruling class to save what is left of Lebanon.