Report Image
Lebanon and Jordan: The Case of the Refugee Crisis
Blurb

The influx of Syrian refugees into Jordan and Lebanon has challenged both countries with “refugee shock,” according to an evaluation by the Independent Evaluation Group, straining the economies of both states and posing a threat to already volatile security environments. Jordan and Lebanon—both high-middle-income but resource-poor and heavily indebted countries—have been hosting millions of Syrians at the expense of their already stressed health, education, and infrastructure systems. This brief is based in the IEG Evaluation: World Bank Group Engagement in Situations of Fragility, Conflict, and Violence.

Official Date
Push to Homepage?
On
Document Mime type
PDF file
Year
2016
Search Priority
4
Extracted Data

World Bank Group
Engagement in
Situations of Fragility,
Conflict, and Violence

LEBANON AND JORDAN

THE CASE OF THE
REFUGEE CRISIS



REFUGEE SHOCK
The influx of Syrian refugees into Jordan and
Lebanon has challenged both countries with
?refugee shock,? according to an evaluation by
the Independent Evaluation Group, straining the
economies of both states and posing a threat to
already volatile security environments. Jordan and
Lebanon?both high-middle-income but resource-
poor and heavily indebted countries?have been
hosting millions of Syrians at the expense of their
already stressed health, education, and infrastructure
systems.

The Syrian war has created the largest humanitarian
crisis since World War II, with 11 million refugees
escaping a grim future. The United Nations estimates
that 7.6 million people are internally displaced
and over 4 million have crossed the border to the
neighboring countries, mainly Jordan, Lebanon, and
Turkey.

Jordan and Lebanon have reached the limit of their
capacity in hosting the migrants. In the absence of
more international support, they may not be able to
survive this shock indefinitely. Economic growth fell
under 2 percent in 2014 from 7 to 8 percent in 2008
in Lebanon due to deteriorating security situation
that undermined investor appetite. Unemployment
spiraled to 20 percent as the supply of workers
surged. Higher housing demand has pushed rents
up, making housing unaffordable for low-income
groups.

Neither of the two countries can afford the resources
they have allocated to meet the needs of the
refugees. In its ?Response Plan? prepared in 2013,
the government of Jordan estimated the additional
fiscal burden at $850 million per annum. This raises
serious challenges in a country with already very high
and unsustainable fiscal deficits. Its debt-to-gross
domestic product ratio reached 86 percent in 2014,
breaking the constitutionally allowed ceiling of 60
percent. In Lebanon, where public finances were
structurally weak prior to the Syrian refugee shock,
the debt-to-gross domestic product ratio fluctuated
to nearly 130 percent after 2012. Fiscal deficit
widened by $2.6 billion during 2012-14.



The large scale of refugee inflow
can seriously disturb the volatile
social balance in both countries
and pose security threats.
These migrants are threatening the demographic
fabrics of their host countries. Both countries put
the number of refugees higher than the number of
registered Syrians by the United Nations. The Gov-
ernment of Jordan estimates that nearly 1.4 million
Syrians live there. In some northern and eastern ar-
eas, Syrians account for more than half of the local
population. In Lebanon, some 1.2 million refugees
account for almost one-fifth of the entire population.
In 2013, nearly 40 percent of schools in Jordan
were considered crowded. In Lebanon, a second
shift was introduced in many schools to serve
the increasing number of children. Similar issues
confronted the health sector. The large influx of
refugees also weighed down municipal services. In
early 2014, municipal authorities in Jordan reported
that they were unable to meet the needs for solid
waste collection and disposal in areas where the
bulk of the refugees resided.

SYRIAN ARAB
REPUBLIC

LEBANON

JORDAN

1.2 million
refugees

1.4 million
refugees

1/5 of the
population

More than 1/2 of
the population in
the northern and
eastern parts of
the country



The financing needs of Syrian
refugees increased from $0.8
billion in 2012 to $7.4 billion in
2015, according to the United

Nations Office for the Coordination
of Humanitarian Affairs Financial

Tracking Service.

2012

2015

Jordan and Lebanon argue that they are
providing a global public good and are
responsible for preventing an even larger influx
into Western Europe. Without significant financial
assistance, Jordan and Lebanon are not capable
of accommodating the refugees.



The World Bank does not provide assistance,
such as shelter, food, and jobs, directly to the
refugees; that is a prerogative of the United Nations
agencies and nongovernmental organizations.
The governments of Lebanon and Jordan, already
indebted, are reluctant to borrow funds for humani-
tarian assistance. Instead, the Bank has directed its
efforts toward mitigating the effects of the refugee
inflow. This review covers a relatively short period
(2011-present), and most activities are still ongoing.

In 2013, the Bank provided Jordan with a $150 mil-
lion emergency loan and a $54.3 million grant and
a Multidonor Trust Fund in Lebanon that attracted
pledges for $74.5 million. The $150 million emer-
gency loan to Jordan addressed essential health
care services, particularly immunization for children,
and basic household needs such as subsidized
liquid propane gas cylinders and bread. The subsi-
dization prevented price increases by 35 percent,
which could have pushed about 45,000 people into
poverty. Another project also supported municipal-
ities most affected by refugee inflow in addressing
the most pressing needs, including solid waste re-
moval, water management, and road rehabilitation.

In Lebanon, the Bank helped scale up the success-
ful National Poverty Targeting Program with an $8.2
million grant in 2014, which became an indepen-
dent stand-alone operation. It introduced new ben-
efits such as food assistance through an electronic
card system currently being implemented by the
World Food Program for more than 800,000 refu-
gees. The overall package of assistance includes
health coverage, education aid, and the e-card food
voucher program.

Jordan
Health care services such as immunization for
children and basic household needs such as
subsidized liquid propane gas cylinders and
bread

Lebanon
Health coverage, education aid,
and e-card food voucher program

THE WORLD BANK?S ASSISTANCE



World Bank Group Engagement in Situations of Fragility, Conflict, and Violence
https://ieg.worldbankgroup.org/evaluations/fragility-conflict-violence

Follow us on Twitter
@WorldBank_IEG

RECOMMENDATIONS
There is a high probability of a short-
term crisis, such as the Syrian refugee
crisis, becoming a serious long-term
development challenge. The Bank Group
strategy as currently designed falls short
of dealing with it.

The Jordanian and Lebanese experience
points to the importance of maintaining
a credible and robust macroeconomic
framework in order to withstand effects
from unforeseen crises. The Bank is likely
to be an important institution (in addition
to the International Monetary Fund) in
providing financial support when a crisis
occurs. However, the absence of a
sustainable macroframework will limit the
Bank?s ability to provide sufficient support.
Without more drastic structural reforms,
Jordan and Lebanon will continue to be
vulnerable to events like the Syrian crisis.

The Bank management?with the political
and financial support of its shareholders?
urgently needs to develop financial
mechanisms that it can use in similar
situations.

In a volatile country environment, a strong
local presence is imperative for quick
strategy and program readjustment ability.
The Bank?s existing regional presence is
modest, and it may need more staff to
cover all the countries it deals with. The
Bank needs to approach this not as a
country-specific issue but as a subregional
issue of the highest corporate priority.

1

2 4

3