The United Nations Development Programme (UNDP) today launched a report titled “Gaza War: Preliminary Findings on the Socio-Economic and Environmental Impact on Lebanon”, providing a preliminary analysis of the impacts and potential consequences of the ongoing Gaza war for the Lebanese economy, key economic sectors and the environment, with a focus on the Southern Lebanese border areas.
“This report builds on previous assessments that have shown the dire socio-economic impacts of the Gaza war on countries of the Arab States region. We need urgent measures to build social and economic resilience in Lebanon and other countries impacted by the conflict in Gaza and the occupied Palestinian territory,” said Dr Abdallah Al Dardari, UN Assistant Secretary-General and Director of the Regional Bureau for Arab States at UNDP. “In Lebanon, a development response to the crisis needs to be intrinsically linked to implementing much needed reforms to bring the economy back on its feet.”
Key economic sectors that provide employment and income to a large proportion of the population of Lebanon – namely tourism, services and agriculture – have been hit hardest, and the likelihood of the economy resuming a contractionary trend is high.
At the national level, the tourism and service sectors, significant contributors to GDP and job creation, have shown indications of decline since the onset of the conflict, as illustrated by declining passenger numbers and dwindling demand for hospitality services such as hotels and restaurants.
During October 2023, the Lebanese Civil Aviation authority recorded more departures than arrivals and a 15 percent reduction in the inflow of passengers compared with October 2022. Additionally, hotel occupancy rates in Lebanon plummeted to below 10 per cent due to the premature departures of visitors and trip cancellations during the same period.
When compared with the first week of October 2023, nationwide restaurant activity witnessed an up to 80 percent reduction in business during weekdays and a 30-50 percent decrease at the weekends after the start of the conflict.
There is an added risk of disruption to financial flows and remittances, compounding challenges in an already dysfunctional banking environment. In 2022, Lebanon recorded the highest remittances-to-GDP ratio in the Middle East and North Africa region, reaching 37.8 percent of GDP or up to USD 7 billion per year. More than 70 per cent of this capital currently reaches the country through informal channels such as individuals carrying cash across borders. The lower influx of passengers will negatively impact the flow of remittances, which provide an important social safety net for large section of the population.
Levies on international trade, including customs and Valued-Added Tax (VAT), constitute more than 60 per cent of total tax revenues. Disruptions to imports will jeopardize the Government’s efforts to restore fiscal balance and pose further risks to Lebanon’s economic recovery.
“Every day we are witnessing the profound impacts of the conflict on the lives and livelihoods of the people of South Lebanon and beyond. This preliminary analysis provides a snapshot of the human, socio-economic and environmental tragedy as it unfolds in real time. This helps to inform the provision of immediate socio-economic and livelihood support while taking a longer view of the development needs of these communities, and providing a baseline for a more sustainable recovery,” said Melanie Hauenstein, Resident Representative, Lebanon, UNDP.
Significant losses were reported in the agriculture sector in the conflict-affected zone – a critical source of livelihood in Southern Lebanese border areas – with damage to lands, chemical pollution, and contamination from explosive remnants leading to soil fertility loss.
Phosphorus shelling has further contaminated crops and water sources, posing threats to livestock and human health. Main crops like olives, carob, grains, and winter crops have suffered significantly – with 47,000 olive trees reportedly burnt.
The conflict has also caused major losses in livestock, poultry and aquaculture. Farm animals reportedly killed include some 200,000 birds and 700 heads of livestock, as well as 250 beehives and 60 greenhouses destroyed. The violence has also restricted access to fishing grounds for local fishermen, impacting their livelihoods.
The report provides a preliminary assessment of environmental impacts, highlighting negative consequences for protected areas, forests, rangelands, water bodies, air quality, and land. There are initial indications that the use of white phosphorus has caused extensive environmental harm, impacting natural ecosystems, water quality, and posing ongoing risks to human health and safety. Further examination is needed to assess the full impact.
Over the last three months, 91 villages in Nabatiyeh and South Lebanon have faced 1,768 attacks, displacing nearly 64,000 people, and causing extensive physical damage to housing, businesses and infrastructure.
The assessment is based on a desk review of available data, complemented by informal interviews with key stakeholders, and with preliminary data gathered by the UNDP team. It follows the launch of two UNDP-ESCWA reports: “Expected Socio-Economic Impacts of the Gaza War on neighboring countries in the Arab States region” and “Gaza war: Expected Socioeconomic Impacts on the State of Palestine”.
