Lebanon’s dollar crisis hits migrants workers

Migrant workers from Bangladesh, working for waste management company RAMCO, inside their dormitory at a company facility in Biakout, near Beirut, Lebanon. The dollar crisis has affected migrant labor especially badly in Lebanon. (Reuters)
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Updated 23 May 2020

Lebanon’s dollar crisis hits migrants workers

  • International labor force bears the brunt of Beirut’s economic woes, as the economy reels from currency and virus crises

BEIRUT: Temitope cannot find work in Lebanon since the Nigerian domestic worker escaped her employer’s house last month.

With Lebanon in deep financial crisis and dollars in short supply, people have less money to spend on help. And with Beirut airport shut under a coronavirus lockdown, Temitope can’t go back home even if she tries.

“I’m very afraid. There’s not a day that I don’t cry ... without any money even to eat now,” said Temitope, who climbed down a building after her employer beat her until she bled. She now lives with friends, relying on any cash they can give her.

Like many African and Asian women in Lebanon, Temitope, a mother of two, was recruited for work and came so she could send money home to her family.

But dollar shortages piling pressure on hundreds of thousands of migrant workers in Lebanon have left some stranded in the streets and many begging to go home. Rights groups warn this puts workers at risk of abuse and trauma.

Embassy and NGO shelters are saturated.

Since Lebanon plunged into crisis late last year, the local currency has lost more than half its value. Prices have soared as more Lebanese slide into poverty.

The coronavirus pandemic has also hampered government efforts to repatriate workers via their embassies, and even those flights require payment in dollars.

“There’s more need than ever before for shelters...for those who lost jobs and have no place else to go,” said Zeina Mezher of the International Labour Organization.

Activist groups say they field regular phone calls from unpaid domestic workers who have been kicked out of their accomodation or escaped their employer’s households.

Migrant workers form the backbone of sectors like waste collection and housekeeping in Lebanon, where many barely have any rights, face widespread racism and sometimes commit suicide.

Most women work as maids under a sponsorship system called “kafala” that even the former labor minister likened to slavery. It prevents them from leaving without the employer’s consent, with salaries as low as $150 a month.

Last month, police interrogated a Lebanese man who tried to sell his Nigerian housekeeper for $1,000 on the social media site Facebook.

“The crises, whether it’s coronavirus or the economy, expose the flaws in the kafala system,” Mezher said.

The prime minister’s wife sparked controversy last week when she called on Lebanese people facing rising unemployment to take up jobs usually filled by foreigners like housekeeper or doorman.

Bangladeshi trash collectors went on strike for weeks after the firm managing waste in Beirut, RAMCO, switched to paying them in Lebanese pounds, undermining the value of their wages.

When workers stopped garbage trucks from going out in protest last week, riot police arrived, firing smoke grenades at some and beating up others.

Mohamad Ilahi, one of the workers, has not sent money to his wife and two daughters in Bangladesh for months. “My family cries a lot,” he said. “They can’t pay school fees, and can’t buy enough food.”

He said RAMCO had agreed to a pay raise in local currency.

RAMCO manager Walid BouSaad said the company had no choice because the Lebanese state, its main customer, had stopped paying in dollars late last year, on top of millions the government already owed in arrears. “It is the worker’s right to ask for payment in dollars,” he said. “But some things are out of our hands.”

For Ilahi, the future in Lebanon remains uncertain. “I want to work. But without a solution, there’s no use for me here,” he said. “I will want to leave then. All of us will.” 


European bank ramps up stimulus package

Updated 05 June 2020

European bank ramps up stimulus package

FRANKFURT: The European Central Bank approved a bigger-than-expected expansion of its stimulus package on Thursday to prop up an economy plunged by the coronavirus pandemic into its worst recession since World War II.

Just months after a first raft of crisis measures, the ECB said it would raise bond purchases by €600 billion ($674 billion) to €1.35 trillion and that purchases would run at least until end-June 2021, six months longer than first planned.

It also said it would reinvest proceeds from maturing bonds in its pandemic emergency purchase scheme at least until the end of 2022.

ECB President Christine Lagarde scotched speculation that the bank could follow the US Federal Reserve in buying sub-investment grade bonds, saying that option was not discussed by policymakers.

The announcement, which comes just weeks after Germany’s Constitutional Court ruled that the ECB had already been exceeding its mandate with a longstanding asset purchase program, prompted a rally in the euro and bond markets.

“Today’s easing measures were another illustration that the ECB means business and stands ready to do whatever is necessary to help the euro area survive the corona crisis in one piece. The ECB will do its part, and it hopes the governments will do their part,” Nordea analysts said in a note.

The bank dramatically revised downward its baseline scenario for euro zone output this year to a contraction of 8.7 percent from the modest 0.8 percent rise it had forecast only in March.

“The euro area economy is experiencing an unprecedented contraction. There has been an abrupt drop in economic activity as a result of the coronavirus pandemic and the measures taken to contain it,” Lagarde said.

She said she was confident that a “good solution” could be found on the legal stand-off with Germany’s top court.