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Distributional Impacts of COVID-19 in MENA
Introduction By now it is no surprise that the COVID-19 pandemic and its ensuing confinement policies have wreaked havoc in world economies. While some countries had the fiscal and economic resources to lessen the impact of the pandemic, lessening its severe consequences on their population, other countries were in an acutely fragile position even before the pandemic struck, leaving them particularly vulnerable to its ramifications. Lebanon is one of the countries in which COVID-19 compounded already severe economic, financial, and political crises. By the end of 2019, Lebanon had plunged into crisis—marked by currency and banking crises, increasing unemployment, and soaring levels of inflation—which was brought about by a drop in capital inflows and poor governance. It had been running a current account deficit since the early 2000s, and the net negative foreign currency position of the balance sheets of the sovereign, the central bank, and the commercial banks stood at 90 percent of GDP at end-2019 (Moubayed and Zouein 2020). Further, the debt-to-GDP ratio is estimated at around 187 percent for 2020, up from 171 percent in 2019, and unemployment is at 40 percent (World Bank 2021). In tandem, the government had resigned following the broad-based demonstrations of October 2019, and a new government, formed in January 2020, had defaulted on its debt obligations in March 2020. These conditions, together with the pandemic, saw the currency’s value plummet and a parallel exchange market established. Within Lebanon, Syrian refugees had been grappling with poor living conditions since their arrival after the onset of the 2011 Syrian war. Lebanon hosts an estimated 1.5 million Syrian refugees out of its nearly 7 million population, making it the nation with the highest number of refugees per capita in the world. Although this situation reflects the remarkable generosity of the Lebanese people, it has also led to tensions between the host community and the refugees, who tend to live mostly in cities and villages, and in some cases in informal settlements, because of the government’s decision to establish refugee camps (UNDP and ARK 2019). The following describe the deplorable living conditions of these refugees: • As of 2020, the Vulnerability Assessment of Syrian Refugees conducted by the United Nations High Commissioner for Refugees (UNHCR), United Nations Children’s Fund (UNICEF), and World Food Programme (WFP) indicated that refugees live in conditions that do not meet humanitarian standards, such as overcrowding and dangerous shelter conditions.
