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Financing for Protracted Displacement in the Syrian Refugee Context in Lebanon - January 2022

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Lebanon hosts the highest number of refugees per capita in the world. After a decade of displacement, tremendous effort has been expended to provide needed services to Syrian refugees and vulnerable host communities in Lebanon. Nonetheless, the outlook for Syrian refugees in Lebanon remains uncertain. The restriction of legal residency for Syrian refugees in Lebanon increases their protection risks. The political instability, economic freefall, currency devaluation and COVID-19 pandemic limit prospects of positive medium- and longer-term outcomes towards pathways for durable solutions for Syrian refugees in Lebanon.

The scope for pursuing longer-term solutions to displacement in Lebanon looks increasingly challenging. In the wider environment, rights and freedoms for refugees, economic conditions, and relations with host communities have deteriorated, particularly in the last 18 months, and poverty and hardship have increased substantially.
Scope for working in partnership with the government to improve the policy and protection environment has reduced and the willingness of donors to strike deals and work in partnership with the government to support inclusion of refugees in service provision and economic opportunities is now extremely limited due to government resistance to reform.

In addition, Lebanon’s debt crisis, and recent debt defaults, has effectively cut off a critical source of external financing. The outlook for Official Development Assistance (ODA) also looks very uncertain.

There are indications of contracting ODA budgets among some donors and elsewhere there is a high level of uncertainty around where major donors are likely to commit in future, notably with the winding down of the EU Madad Trust Fund and uncertainty around how EU funds will support flexible and fast refugee programming in future. Other key donors meanwhile are in holding patterns, considering their options and drafting strategies.
Meanwhile, competition for ODA funds is growing as demand for support to meet the basic needs of refugees and the Lebanese population grows in an economy in freefall, and the COVID pandemic and Beirut port explosion add further layers to Lebanon’s crises.

Donors are already facing tough tradeoffs and longer-term programming is likely to compete poorly with demands to meet urgent basic needs. In this environment of expanding immediate needs, shrinking resources, and uncertainty, effective prioritization will be critical and we have to be realistic that immediate needs are likely to take precedence.
Lebanon already has years of experimentation and learning around how to support longer-term approaches to refugee inclusion under its belt., for instance support to the health sector has evolved over multiple iterations. This evidence should be marshalled and used to inform prioritization of activities and programmes where there is evidence of effective outcomes and even impact, to prioritise and protect longer-term programming.