Lebanon’s elephant in the room

Lebanon's elephant in the room
Source: Pixabay

It’s the elephant in the room – or should that be in the garden next door. Although Lebanon may not be greatly affected by the civil war raging in neighbouring Syria, at least not at the moment, the constant drip of sectarian politics seemingly growing louder by the day threatens to ratchet up tensions in the country to new heights. It’s a very real worry, especially for the many Lebanese with horrific memories of the country’s own traumatic 15-year-long civil war, which only ended in 1990 after claiming an estimated 120,000 lives.

Certainly, when viewed through international eyes, the perceived spectre of civil war hanging over the region has been enough to drive down tourism numbers despite the positive noises emanating from the Lebanese government. Initiatives such as the Smile Lebanon 50/50 campaign, launched at the beginning of the year, are squarely aimed at reversing the dramatic decline in visitor numbers which have reached worrying proportions.

Numbers peaked in 2010 with some 2 million visitors generating more than $8 billion in revenue. By 2011, the figure had dropped to just over 1.6 million. Last year, the downward slide continued, reaching slightly under 1.4 million and representing a fall of almost 17.5% compared to 2011. In a month-on-month comparison across both years, November 2012 recorded the largest drop, at just fewer than 39%.

But blank out the Syrian civil war for just a moment with its incursions and dangers of escalation, not to mention the growing numbers of refugees fleeing across the border into Lebanon to escape the fighting, and it’s not all doom and gloom. Far from it. There’s no sense of panic on the streets or much in the way of concerns expressed on the numerous expatriate websites on the Internet.

Lebanese Central Bank Governor Riad Salameh has certainly been talking up Lebanon’s banking sector and dismissing fears of risks of over-exposure because of the Syrian civil war. Lebanese banks operating in Syria had no plans to pull out, he told Bloomberg in an interview last month, and had scaled back operations. They were now in a “wait and see” situation.

Lebanon’s agricultural sector has been feeling the impact, says Oxford Business Group, with falling sales in its Syrian markets, rising fuel costs and the severing of trade routes to the rest of the Middle East, particularly the Gulf.

The global publisher and consultancy says the border between Lebanon and Syria has been all but closed to trucks since July 2012. While intermittent trade has continued, the worsening security situation has meant fewer exporters were now willing to take the risk of using Syrian routes to move their produce.

Prior to the closing of most land routes through Syria, up to 80% of Lebanon’s agricultural exports were shipped by road either to or through its neighbour. To some extent the problem had been resolved, with an increasing amount of farm produce being carried by ship directly to markets or transshipped through third countries before being moved by land to its final destination.

Oxford Business Group adds, “Though effective in circumventing the Syrian bottleneck, this process can slow down deliveries and add to transport costs, especially as there is a shortage of refrigerated vehicles to make the long haul to markets further afield. Less likely to be remedied any time soon is the loss of sales to Syria itself, with little sign of a return to stability on the horizon.”

Find out more by going to the Oxford Business Group website here.


The following is a guest post