Decline of migrant remittances and transfers threatens livelihoods

Following the announcement by the Bank of Lebanon Governor, Riyad Salameh, that the Lebanese migrant communities is the main pillar of the national economy (nearly 16% of the GDP), a new study on remittances of workers in Arab countries released by the Union of Arab Banks (UAB), has shown a decline in the rate of transfers into Lebanon during the past two years, which poses a threat to income and purchasing powers of households. The remittances of emigrants during 2015, according to the study, dropped to USD 7.3 billion (by 3.3%) in that year compared to USD 7.5 billion in 2014, a year which also posted a regression of 8.4%. Meanwhile, the Institute of International Finance figures have indicated that the overall private capital remittances of non-residents into the country are not expected to exceed USD 5 billion in 2016, (11.6% fall against the previous year). The UAB survey has also revealed a close and positive correlation between remittances on the one hand, inflation and the imports on the other, since such transfers are basically used for consumption purposes, particularly in the purchase of imported goods (causing an upsurge in the rate of imports). On the credibility of above estimates, the head of Bank Audi Research Section, Marwan Barakat, told Al Akhbar newspaper that he cannot confirm them for lack of precise figures. However, he did indicate that overall transfers have actually dropped by 25% during last year but then again increased by 14% during the first quarter of 2016. Central Bank sources, on their part, confirmed the bad news pointing to the decline in financial inflows during the first half of the present year. (The Daily Star, Al Akhbar, July 26, 27, 2016)