Diaspora Power, Informal Labor, and Economic Realities
In recent years, Lebanon has faced unprecedented financial turmoil, social upheavals, and political shifts that have dramatically reshaped its socioeconomic fabric. As the country continues to grapple with the aftermath of its 2019 financial crisis, two major sources of foreign capital—remittances from the diaspora and tourism revenues—have been seen as potential lifelines for the ailing economy.
As the Lebanese diaspora plays a growing role in political engagement, and the Lebanese workforce faces increasing informality, these factors present an opportunity to build a different relationship with the diaspora, allowing us to institutionalize their role and direct it to serve the interests of the majority of residents and expats This blogpost builds on articles published by The Policy Initiative that explore how the Lebanese diaspora’s increasing political involvement has reshaped electoral dynamics, while also examining how remittances, tourism, and workforce transformations are interconnected with the country's economic recovery.
Diaspora’s Political Mobilization: The 2022 Parliamentary Elections
The Lebanese diaspora played a pivotal role in shaping the results of the 2022 parliamentary elections. As Georgia Dagher notes in her analysis of the diaspora’s voting patterns in the 2022 elections, the rise in diaspora participation was not only notable in terms of numbers but also in terms of political preferences. Diaspora voters were far more likely to support anti-establishment candidates compared to voters within Lebanon, and they were essential in the election of at least seven parliamentary candidates, five of whom claimed to be anti-establishment figures.
This surge in support can be attributed to the fact that many Lebanese citizens emigrated after the financial crisis and the Beirut blast, which galvanized their desire for political change. The diaspora’s involvement in the elections marks a growing influence in Lebanon’s political landscape, one that is likely to persist as the country navigates future elections.
Economic Challenges: Remittances and Tourism Fail to Bridge the Gap
While foreign currency inflows such as remittances and tourism have long been viewed as potential solutions for Lebanon's economic woes, these sources of income have not been sufficient to mitigate the country’s challenges. In fact, they have often exacerbated existing inequalities.
According to Hussein Cheaito and Sami Zoughaib, remittances have largely supported consumption for a small segment of Lebanese society rather than contributing to wider investment or job creation. Additionally, most remittances are now funneled through informal channels, bypassing the formal financial system, which prevents them from being reinvested into the economy. This has limited their capacity to serve as a genuine tool for economic recovery. In the absence of significant structural reforms, remittances will likely remain a stopgap solution, benefiting only a fraction of the population without addressing the root causes of Lebanon's financial crisis.
Tourism has similarly failed to boost the broader economy, with revenues concentrated in the hands of large corporations, leaving the majority of workers unable to benefit from tourism-related growth. Despite predictions of a boom in tourism following the Lebanese Ministry of Tourism’s decision to allow businesses to price services in US dollars, the tourism sector remains highly unequal. The lack of reinvestment in the tourism industry, combined with the fact that few Lebanese workers earn in foreign currency, has prevented tourism revenues from translating into widespread economic growth. The concentration of profits in the tourism sector mirrors the broader economic disparities that have plagued Lebanon for years.
Lebanon’s Mutating Workforce: Navigating Informality
Adding to these economic challenges is the increasing informality in Lebanon's labor market. As Blurred Lines: Lebanon’s Mutating Workforce highlights, the financial collapse has led to a dramatic shift in the structure of the country’s workforce. Jobs are increasingly informal, characterized by a lack of job security, social protection, and labor rights. These shifts are particularly evident in sectors such as public administration, where informal employment practices have become more common.
The rise in informality has worsened economic conditions for many Lebanese workers, pushing them into precarious jobs with low pay and little security. This informal job market is growing at a time when the Lebanese Lira has lost most of its value, further eroding workers’ purchasing power. As a result, poverty is on the rise, and Lebanon’s middle class is shrinking. The lack of formal jobs also contributes to rising inequality, limiting opportunities for economic mobility. Without a comprehensive labor policy that formalizes employment and ensures social protection, Lebanon’s workforce will continue to mutate in ways that perpetuate instability. Informality, like remittances and tourism, is a temporary band-aid for Lebanon’s deeper economic wounds.
Foreign Capital and Informality Alone Cannot Save Lebanon
Lebanon’s reliance on foreign capital, whether through diaspora remittances or tourism revenues, combined with an increasingly informal workforce, is insufficient to restore the country's economy or address its deep-rooted inequalities. While the Lebanese diaspora’s political mobilization has brought about some shifts in electoral outcomes, this is only part of the equation. The economic contributions of remittances and tourism, though significant in terms of inflows, have failed to bring about substantial recovery or inclusivity, and Lebanon's workforce continues to suffer from growing informality.
To move forward, Lebanon must adopt a comprehensive economic recovery plan that goes beyond short-term foreign capital inflows and informal labor practices. Structural reforms, investment in human capital, and inclusive economic policies are needed to build a sustainable future. Without these changes, foreign inflows and an informal workforce will remain stopgap measures that fail to address Lebanon’s deeper financial and political crises.
Articles References:
Back to blog articles
In recent years, Lebanon has faced unprecedented financial turmoil, social upheavals, and political shifts that have dramatically reshaped its socioeconomic fabric. As the country continues to grapple with the aftermath of its 2019 financial crisis, two major sources of foreign capital—remittances from the diaspora and tourism revenues—have been seen as potential lifelines for the ailing economy.
As the Lebanese diaspora plays a growing role in political engagement, and the Lebanese workforce faces increasing informality, these factors present an opportunity to build a different relationship with the diaspora, allowing us to institutionalize their role and direct it to serve the interests of the majority of residents and expats This blogpost builds on articles published by The Policy Initiative that explore how the Lebanese diaspora’s increasing political involvement has reshaped electoral dynamics, while also examining how remittances, tourism, and workforce transformations are interconnected with the country's economic recovery.
Diaspora’s Political Mobilization: The 2022 Parliamentary Elections
The Lebanese diaspora played a pivotal role in shaping the results of the 2022 parliamentary elections. As Georgia Dagher notes in her analysis of the diaspora’s voting patterns in the 2022 elections, the rise in diaspora participation was not only notable in terms of numbers but also in terms of political preferences. Diaspora voters were far more likely to support anti-establishment candidates compared to voters within Lebanon, and they were essential in the election of at least seven parliamentary candidates, five of whom claimed to be anti-establishment figures.
This surge in support can be attributed to the fact that many Lebanese citizens emigrated after the financial crisis and the Beirut blast, which galvanized their desire for political change. The diaspora’s involvement in the elections marks a growing influence in Lebanon’s political landscape, one that is likely to persist as the country navigates future elections.
Economic Challenges: Remittances and Tourism Fail to Bridge the Gap
While foreign currency inflows such as remittances and tourism have long been viewed as potential solutions for Lebanon's economic woes, these sources of income have not been sufficient to mitigate the country’s challenges. In fact, they have often exacerbated existing inequalities.
According to Hussein Cheaito and Sami Zoughaib, remittances have largely supported consumption for a small segment of Lebanese society rather than contributing to wider investment or job creation. Additionally, most remittances are now funneled through informal channels, bypassing the formal financial system, which prevents them from being reinvested into the economy. This has limited their capacity to serve as a genuine tool for economic recovery. In the absence of significant structural reforms, remittances will likely remain a stopgap solution, benefiting only a fraction of the population without addressing the root causes of Lebanon's financial crisis.
Tourism has similarly failed to boost the broader economy, with revenues concentrated in the hands of large corporations, leaving the majority of workers unable to benefit from tourism-related growth. Despite predictions of a boom in tourism following the Lebanese Ministry of Tourism’s decision to allow businesses to price services in US dollars, the tourism sector remains highly unequal. The lack of reinvestment in the tourism industry, combined with the fact that few Lebanese workers earn in foreign currency, has prevented tourism revenues from translating into widespread economic growth. The concentration of profits in the tourism sector mirrors the broader economic disparities that have plagued Lebanon for years.
Lebanon’s Mutating Workforce: Navigating Informality
Adding to these economic challenges is the increasing informality in Lebanon's labor market. As Blurred Lines: Lebanon’s Mutating Workforce highlights, the financial collapse has led to a dramatic shift in the structure of the country’s workforce. Jobs are increasingly informal, characterized by a lack of job security, social protection, and labor rights. These shifts are particularly evident in sectors such as public administration, where informal employment practices have become more common.
The rise in informality has worsened economic conditions for many Lebanese workers, pushing them into precarious jobs with low pay and little security. This informal job market is growing at a time when the Lebanese Lira has lost most of its value, further eroding workers’ purchasing power. As a result, poverty is on the rise, and Lebanon’s middle class is shrinking. The lack of formal jobs also contributes to rising inequality, limiting opportunities for economic mobility. Without a comprehensive labor policy that formalizes employment and ensures social protection, Lebanon’s workforce will continue to mutate in ways that perpetuate instability. Informality, like remittances and tourism, is a temporary band-aid for Lebanon’s deeper economic wounds.
Foreign Capital and Informality Alone Cannot Save Lebanon
Lebanon’s reliance on foreign capital, whether through diaspora remittances or tourism revenues, combined with an increasingly informal workforce, is insufficient to restore the country's economy or address its deep-rooted inequalities. While the Lebanese diaspora’s political mobilization has brought about some shifts in electoral outcomes, this is only part of the equation. The economic contributions of remittances and tourism, though significant in terms of inflows, have failed to bring about substantial recovery or inclusivity, and Lebanon's workforce continues to suffer from growing informality.
To move forward, Lebanon must adopt a comprehensive economic recovery plan that goes beyond short-term foreign capital inflows and informal labor practices. Structural reforms, investment in human capital, and inclusive economic policies are needed to build a sustainable future. Without these changes, foreign inflows and an informal workforce will remain stopgap measures that fail to address Lebanon’s deeper financial and political crises.
Articles References:
- Dagher, Georgia. How Did the Lebanese Diaspora Vote in the 2022 Parliamentary Elections? The Public Source, [https://www.thepolicyinitiative.org/article/details/351/how-did-the-lebanese-diaspora-vote-in-the-2022-parliamentary-elections], [May 2, 2024].
- Cheaito, Hussein, and Zoughaib, Sami. Tourism and Remittances Are Not a Panacea for Lebanon's Financial Woes. The Public Source, [https://www.thepolicyinitiative.org/article/details/177/tourism-and-remittances-are-not-a-panacea-for-lebanons-financial-woes], [July 13, 2022].
- Zoughaib, Sami, and Maktabi, Wassim. Blurred Lines: Lebanon’s Mutating Workforce. The Public Source, [https://www.thepolicyinitiative.org/article/details/333/blurred-lines-lebanon%E2%80%99s-mutating-workforce], [January 17, 2024].
Track Orders
