Prior to the civil war in Syria, the Lebanese economy was sailing at full steam, with regenerated city centres, foreign investments and a growing middle class all contributing to the country’s financial strength.
Since the outbreak of war, Lebanon has struggled to cope with an influx of over 800,000 Syrian refugees. Whilst ensuring that refugee communities are well cared for has been a priority for the Lebanese government, this has undoubtedly strained resources and impacted the jobs market within much of the country.
However, there has been a recent growth of e-commerce opportunities in the country and even the effect of Syria has been indirectly positive one, leading to shifts in Lebanese consumer habits. Here’s a brief overview of how the spending, saving and investing has changed in Lebanon in recent years.
Investing for the Future
Despite the recent setbacks to Lebanon’s economy, the Lebanese remain committed to investing in the future progress of their country. On an individual level, families are using personal loans to upgrade their quality of life, including investing in home improvements, new, more fuel-efficient cars and higher education.
On a commercial level, businesses are investing in online payment tools that allow the people of Lebanon to buy and sell their products via the Internet. In March 2013, online payment gateway PayPal announced plans to launch its service in Lebanon, a move which could finally put an end to the frustrating ‘cash on delivery’ ecommerce method used currently.
Less Luxury, More Savvy
Prior to the troubles in Syria, Lebanon experienced a rise in the luxury goods industry – with diamond jewelry shops, Michelin-starred restaurants and designer fashion boutiques cropping up in newly developed shopping centres across the country. In October 2013, however, the Financial Times reported that the luxury goods market in Lebanon has dropped 40% since 2011.
Although the Syrian refugee crisis can certainly be viewed as a setback to the Lebanese economy, it has halted a luxury spending trend that may have been harmful in the long-term. The quick rise, and equally quick fall, of the luxury goods industry in much of Lebanon proves that perhaps the economic infrastructure wasn’t strong enough to sustain these luxury markets from the very beginning. Forced to make savvier spending decisions, those living in Lebanon have stopped contributing to what could have been a major bubble within the Lebanese economy.
So, while the impact of Syria on the Lebanese economy cannot be ignored, the subsequent pattern of savvier spending may be a silver lining. Smarter spending habits, combined with the rise of ecommerce, are two promising trends.
Image by Varun Shiv Kapur, used under Creative Comms license