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Since 2019, the role of remittances sent by the diaspora to Lebanese residents has undergone significant shifts. These changes in allocation, frequency and amounts reflect the multi-faceted crisis that has gripped Lebanon for the past four years.
Remittances from the diaspora primarily serve Lebanese recipients in addressing immediate consumption needs, with a major portion dedicated to food and basic expenses (65%), as well as medical bills (59%). Among those surveyed, 16% used these funds to settle debts mainly related to food, medical costs and bare necessities. Meanwhile, 46% earmarked them for specific expenditures, when 29% utilized them for general expenses.
These statistics are the result of a comprehensive survey conducted by Mercy Corps (Global team of humanitarians working on the front lines of today’s biggest crises), titled “Analysis of Remittances to Lebanese Households – July 2023.”
This quantitative survey relies on a combination of primary and secondary data collected from a sample of 379 respondents, backed by a series of ten interviews, employing a comprehensive mixed-method approach.
Who Contributes ?
The primary sources of remittances originate from close family members, including parents, spouses and siblings, contributing a significant 66% of the total. They are closely followed by extended family members, such as cousins and others, accounting for 22%.
Friends constitute a smaller proportion, at just 10%. Notably, Mercy Corps’ survey underscores that a substantial 90% of recipients receiving funds from immediate family members do so on a regular basis.
Regarding the geographic distribution of these financial contributors, it is as follows: 34% reside in Gulf Cooperation Council (GCC) countries, 23% in ten North American countries, among which the United States, Canada and Mexico. Additionally, 19% are situated in Europe, 14% in Africa, 14% in Australia and 4% in South America.
Who Benefits ?
Contrary to initial assumptions, households with higher incomes appear to receive remittances more frequently. Indeed, 59% of those surveyed with a monthly average income ranging from LBP 20 million to LBP 25 million, as well as 48% of those earning over LBP 25 million per month, reported receiving remittances regularly. In contrast, only 7% of individuals with a monthly income below LBP 5 million indicated that they receive remittances on a regular basis. In total, 34% of households have consistently received remittances, while 66% have received them sporadically.
It is noteworthy that 63% of the beneficiaries surveyed mentioned that they began receiving remittances after 2019. This underscores a clear connection between the economic crisis and the increasing reliance on this money as a source of income, particularly in the context of the depreciation of the Lebanese pound.
Remittances’ Frequency and Amount
According to the Mercy Corps survey, a noteworthy correlation exists between the frequency and the size of remittances received. Specifically, respondents who have been getting payments more frequently since 2019 also reported obtaining larger sums. In 2022, 45% of those surveyed noted an increase in the frequency of remittances compared to the period before 2019, while 41% indicated that the amounts had increased.
In terms of the overall distribution, half of the remittances received by the survey participants at the time of the study fell within the range of $100 to $300 on average. Notably, the majority of this bracket was reported by individuals who received them regularly. Additionally, respondents who got the highest amounts (exceeding $500) were primarily among those with regular remittance patterns. Conversely, those who received them irregularly obtained the smaller sums.
Remittances Role
Since 2019, remittances from the diaspora have seen a diminishing impact on savings, investment and their role as an external source of development funding within Lebanon. They no longer significantly contribute to driving the gears of the economy. According to Mercy Corps’ survey, only a small minority of participants have utilized these amounts to support small and medium-sized enterprises (SMEs).
While these remittances may partially account for the value of Lebanon’s imports during a period of shrinking GDP, an exhaustive national census is imperative to precisely quantify their exact contribution.
In any case, it is essential to underscore that diaspora remittances to Lebanese residents cannot effectively replace the social safety nets provided by the government, particularly the services delivered by the National Social Security Fund (CNSS).
From a macroeconomic perspective, diaspora remittances totaled $7.4 billion in 2019, suffered a decline to $6.3 billion in 2021 and rebounded to $6.8 billion in 2022.
