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Financial crisis sends Lebanese packing ... for home

They leave behind high-rolling lifestyles, and remittances their tiny country has come to depend on.

BEIRUT — Twenty-eight-year-old Rony H. moved from his native Lebanon to Dubai in 2003. The city was in the midst of a decade-long building boom, its famous glitzy towers and man-made islands still under construction. Rony eventually settled for a job as a broker in the red-hot real estate market in 2007.

“I was making more than $10,000 per month,” he said. “It was easy money.”

But a year later, the bottom fell out of the real estate market as the global financial crisis hit the gulf. The company Rony worked for folded; his job disappeared. He kicked around in Dubai for six months, looking for work. His high-rolling, nightclub-loving ways (“every night was a weekend,” he said) saddled him with $27,000 in credit card debt and personal loans. Now, he’s back in Lebanon, unemployed.

“I spent all my money. I’m going to start from zero,” he said, asking that his full name not be used to protect him from creditors.

Rony is one of perhaps thousands of Lebanese who have returned jobless and near penniless from Dubai, a phenomenon that could drastically reduce the remittances that fuel Lebanon’s economy.

Last year remittances from millions of Lebanese expatriates working and living everywhere from Kuwait to Australia totaled more than $6 billion, an amount equal to more than 25 percent of the tiny country’s gross domestic product. Thirty percent of Lebanon’s labor force resides in Arab Gulf states like Dubai, according to Standard Chartered Bank.

No one knows for sure how many Lebanese are unemployed — or how many have returned to Lebanon — because of the economic crisis. Lebanon’s Central Bank has planned for a worst case scenario of a 30 percent drop in remittances, said Central Bank Gov. Riad Salameh, although he said it’s still too early to tell how severe the effect will be.

“Up till now, we haven’t seen really a negative affect or big change in remittances, and maybe it’s too soon for we are at the beginning of 2009,” Salameh said. “They are a pillar of stability and source of funding of private and public sector; that’s why we give them importance.”

Lebanon has so far dodged the bullet of the global economic crisis, mainly due to the Central Bank’s conservative banking rules. But if remittances drop, Lebanese families will have less to spend. Rony used to send $500 to $1,000 home every month to help pay for bills or insurance. Now thousands like him, and their families, will be forced to survive on much lower salaries than were once available in Dubai.

“I need to find a job ASAP,” Rony said, indicating he’d readily accept a far lower salary than his previous job in Dubai. “At least $1,000 per month, as a start.”

Others have been lucky to find a job as soon as they return to Lebanon. Charbel Karam, 26, is one of them. He lost his job in January as a graphic designer at one of the top advertising firms in Dubai. With his top-notch experience, Karam quickly found a new job in Lebanon as an art director, which gives him more responsibility. But he’s making about a third of what he made in Dubai — mainly, he said, because there is a glut of people just like him.

http://www.globalpost.com/dispatch/lebanon/090330/financial-crisis-sends-lebanese-packing-home