When aid funds a country — not its refugees

Business is thriving in a small, chaotic shop in Beirut’s Armenian district. In the space of five minutes, three Syrian refugee families unload armfuls of food onto the counter, sliding the World Food Programme's e-card toward the cashier.

In the wake of the Syrian refugee crisis, shop owner Kervork Kazanjian says his profits are up 40 percent.

This is the frontline in the aid industry’s effort to turn Lebanon’s 1.5 million Syrian refugees into valuable consumers and to encourage their hosts to see them as an economic boost.

The idea that refugees need cash, not commodities, has been gathering momentum with the largest-ever EU-funded cash assistance program launched in Turkey in January. In the Middle East, where many refugees live in towns or cities rather than camps, U.N. agencies say cash assistance is cost-efficient. For refugees, it gives back a scrap of independence lost through displacement. Within limits, they can choose where and how to spend their money.

“This empowers them,” says Paul Skoczylas, WFP’s deputy director in Lebanon. “Giving them purchasing power means that host communities see the power of Syrian refugees. I think it could help create a positive atmosphere.”

One family Devex spoke with who wished not to be named receives $27 of cash assistance per person, or a total of $135 each month. The money is loaded onto a debit-style e-card, which they can use to buy food at approved shops around the country. While that amount doesn’t make life easy, it’s enough to purchase cereal, bulgur, beans and French fries for the children. The family makes up five of the 700,000 refugees WFP supports.

“We use the e-card to buy most of our food,” the mother of three told Devex.

WFP is proud that each month $19 million is transferred from refugee e-cards into the tills of Lebanese shopkeepers. The U.N. food agency has linked its cash assistance programs to a boost in local economies in Rwanda and Uganda, and now WFP says the same is true in Lebanon.

But a 2015 report by the U.N. Development Programme and UNHCR found that this “significant amount” of aid money was not enough to halt the negative impacts of the Syrian crisis on Lebanon’s economy.

“While it helped mitigate the effects of the Syria crisis, the humanitarian package did not completely offset those effects,” read the report.

With tourism dropping by 23 percent and a 7 percent decrease in exports, Lebanon’s economy slid into negative GDP growth in 2014, reaching -0.3 percent. But as the economy struggles and the Syrian conflict approaches its sixth anniversary, international NGOs have been searching for ways to support Lebanon’s refugees without excluding the local population. Money that would traditionally take the form of food parcels or hand-outs is instead being funneled into the country itself, fueling its economy and supporting public institutions.

Supporting public institutions

Deeb Annan’s school in south Beirut is crumbling. The director leans back in his chair as he lists everything that needs refurbishment. “The playground, the classrooms, the staircase, we have no library, no computers…”

Lebanon’s public school system has a poor reputation. Unloved by the Lebanese, only 30 percent of the population enroll their children — most opting for private education instead. But for many Syrians who came over the border, private school is not an option. Suddenly the number of children in public schools doubled, according to UNICEF.

To cope, Lebanese schools — which usually only opened in the morning — started operating a second shift from 2 p.m. to 6 p.m., exclusively for Syrian children. Teachers were asked to work overtime. Costs such as electricity soared.

Despite the increase in students and the brown water stains that curve around the corners of his office, Annan says his school is benefitting from the money UNICEF channels into the country’s Ministry of Education and Higher Education. Since September 2014, the U.N. agency has been paying the ministry $600 per Syrian child, per year. The ministry then uses this money to pay teachers, maintain school buildings, provide transportation and hand out school supplies.

It also means the ministry can waive the fees that usually exist for public schools in Lebanon, offering free education not just for Syrians, but for Lebanese children too.

Luciano Calestini, deputy representative of UNICEF in Lebanon, says the agency never mounted a “refugee response” to the Syrian crisis in Lebanon. Instead, it supports refugees by supporting public services such as schools and hospitals.

“We’re using this opportunity to work with the Lebanese authorities to build stronger public systems,” he said. “We support the health and education system so that all children can benefit. If families or communities feel excluded from assistance, we risk doing harm.”

Using aid to finance government spending — known as “budget support” — comes with the risk of corruption, according to a 2011 report by the Overseas Development Institute.

While U.N. agencies use a system called HACT — “harmonizing approach to cash transfers” — to monitor and audit the distribution of funds to its partners, corruption is a particular concern in Lebanon. In Transparency International’s 2016 Corruption Perceptions Index, the country scored 28 marks out of 100 — putting it in a category of countries that are “plagued by untrustworthy and badly functioning public institutions.” 

Despite the risk, Cindy Huang, policy expert at the Center for Global Development, said it’s important that U.N. agencies and humanitarian NGOs work with governments so they don’t create parallel systems when there are already functioning ones in place.

“While a separate system is likely necessary during the initial emergency phase, it could exacerbate inequalities and tension between refugees and their host communities in the long run,” she said.

Supporting both Syrians and Lebanese

The relationship between the Syrians and Lebanese is complicated by the two countries’ history — Syria occupied Lebanon for 29 years, eventually withdrawing in 2005.

“It is very important that we can demonstrate there are social and economic dividends possible through working together,” said UNICEF’s Calestini, noting that the agency’s interventions are partly designed to ease tensions between refugee and host communities.

The aim to diffuse tensions is also why WFP works with the Ministry of Social Affairs, supporting 50,000 vulnerable Lebanese with the same e-card system that Syrians use to buy their food: “When poor Lebanese feel infiltrated by refugees, it’s not good for dynamics,” said WFP’s Communications Manager Edward Johnson. “It’s good for us to maintain some level of social cohesion.”

Save the Children Lebanon tackles the issue by devoting roughly 30 percent of its time to local communities. In Tripoli, for example, most of their beneficiaries are Lebanese.

“We believe in providing support to any vulnerable child, whatever their nationality,” said Save the Children Spokesperson Sandy Maroun.

The international charity also offers landlords free property renovation if they rent to refugees for one year.

While international NGOs are refining a system where local communities can profit from Syrians, local NGOs say it’s important that this relationship benefits both sides and does not become too commercial.

Ali Al Sheikh Khodr — a volunteer at Beirut-based Syrian Eyes, which provides relief to refugees living in informal settlements — described Christmas in the Bekaa region, an area in east Lebanon where more than 300,000 refugees live in informal settlements.

“The border city became a kingdom of adverts,” he said. “Since the refugee crisis started, the banks are benefitting, the local market is benefitting, the municipality is benefiting.”

But the question remains, how much are Syrians benefitting? He mentioned how farmers have been renting small patches of land for $50 per month: “That’s just for the land, not for the tent, so some refugees have to use food vouchers to pay their rent,” he said.

“The system has become exploitative,” said his colleague, Syrian Eyes Project Manager Aida Hussein.    

Hussein worries that the Lebanese are taking advantage of Syrian refugees’ new “purchasing power.” For example, she has noticed when Syrians are struggling, they buy food on credit at supermarkets so they have no option but to keep shopping at that store.

Veronique Barbelet, research fellow at London’s Overseas Development Institute, said refugees feel exploited because they are refugees, not due to cash assistance programs.

“As a vulnerable population, refugees are prone to feeling exploited because they have limited options,” she said. “Cash assistance is definitely the right answer. It’s a bit early to know for sure that it improves relations between refugees and their host community but we’re seeing signs that it’s a good thing.”  

While Beruiti shop owner Kazanjian is pleased with his profits, many of Lebanon’s Syrian refugees remain deeply unhappy despite humanitarian efforts. They complain of deep debt, driving poverty and a constant fear for their children’s futures. While aid can ease the situation of Syrian refugees in Lebanon, the real solution is political. They want to go home.

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