A wave of protests has been rocking Lebanon of late, with university students and public sector employees rallying against the high cost of living. Civil defense volunteers taking part in a “Day of revolt” organized by public sector employees last week went as far as threatening to swim off the coast of Beirut until they drowned if parliament did not respond to their grievances.
In recent years, the country has become unaffordable for most Lebanese citizens—and more particularly the youth—as the economy comes under considerable economic strain. Jana Alameh, a 23-year-old student, commutes every day to attend classes in Beirut. “Lebanon has become very expensive. Most students who have to commute can’t afford housing in the capital, because rents are so high,” she said. Her friend, Pauline Wheybe, a student at the Lebanese University adds: “I could not afford a private university because of inflated yearly tuition fees that often start at 10,000 US dollars.”
An annual survey of house rental prices for 2014 by EuroCost, quoted by Byblos Bank's economic research publication Lebanon This Week, has ranked Beirut as the most expensive city in the Middle East for expatriate housing. According to the cost of living index by data and analytics provider Xpatulator, Beirut is considered the third most expensive city in the Arab world after Doha and Dubai. However, unlike the economies of Qatar and the UAE, Lebanon’s has been severely affected by years of instability and poor economic policies. Lebanon’s deficit reached 9.5 percent of GDP in 2013, its debt is close to 65 billion dollars—nearly 1.5 times the national GDP—while inflation was close to 7 percent according to the International Monetary Fund. Low wages have also failed to offset the high cost of living, in contrast to other Arab cities such as Doha or Dubai. “The price of basic goods such as food or gas has become exorbitant, while the job market is very tight and wages are low. The high cost of living is not justified in Lebanon,” says Alameh.
A controversial draft law to raise the salaries of public sector employees will put more pressure on the nation’s already overstretched finances. “The economic repercussions of the new salary scale are significant and unclear over the long-run,” says Nassib Ghobril, head economist at Byblos bank. The wage hike is also expected to cost the treasury some 1.6 billion dollars annually amid a widening budget deficit that may possibly prompt ratings agencies to downgrade Lebanon’s sovereign debt and the Lebanese banks holding the bulk of sovereign bonds. The impact of the salary scale, if approved, will also trickle down to lower-income classes through a series of tax increases such as one on value added tax, and through the creation of new taxes to be imposed on various sectors from real estate to banking.
Many of Lebanon’s youth who dream of securing a good job, buying a house and enjoying a level of normalcy in their life, are forced to migrate. Wheybe says she would like to leave her home country as soon as possible. “Living in Lebanon is not a realistic option anymore; you need wasta [influence] or wealthy parents with loads of money to hope for some financial security.”
All views expressed in this blog post are those of the author and do not necessarily represent the views of, and should not be attributed to, The Majalla magazine.