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In Lebanon it is business as usual against all the odds

Published 05/02/2013




ON MY annual trip to the Lebanon last month I was keen to see how the long-suffering Lebanese had coped with the violent anarchy on their doorstep in Syria.

As if 15 years of bloody civil war in their own country was not enough, the last thing that Lebanon needed was another one breaking out just across the border. Damascus is less than a couple of hours' drive from Beirut and Homs, which have seen some of the worst of the violence, and are only a few miles from the northern border of Lebanon.

First impressions were surprisingly positive. New shops and building sites line the road up the hills out of Beirut and there is a general air of busy economic activity. And, of course, the apparently inexhaustible supply of new apartment blocks rise from the most inhospitable sites.

However, estimates of Lebanese GDP suggest that after a number of years of economic growth of around 8 per cent per annum up to 2011, the economy grew by less than 2 per cent in 2012 and the forecast for 2013 is not good.

Economic data for the Lebanon has been notoriously unreliable but is now improving thanks to a group of Northern Ireland statisticians. NI-CO, Northern Ireland's public sector consultancy body, is working with experts from the NI Statistics & Research Agency on a contract for the Lebanese Central Administration for Statistics (CAS) to deliver accurate and validated national accounts and trade statistics. This important work is designed to strengthen the institutional capacity as well as the technical capacity of CAS to inform economic policy.

But back to the impact of the Syrian crisis on business in Lebanon. There is no doubt that the restrictions on movement caused by the conflict have affected exports from Lebanon, many of which if not destined for Syrian markets pass through Syria on the way to other Middle Eastern markets.

A leading Lebanese trader told me that he kept his depot in Damascus open for as long as possible but had to close it down just before Christmas. However, they have found other routes to the even more lucrative markets in the Gulf states.

Not surprisingly, the Lebanese tourism market has also suffered. "Are you mad?" is the usual reaction I get when I tell people at home that I am visiting Beirut.

But until the Syrian conflict broke out last year the city was beginning to resume its title of the Paris of the Middle East. The National Museum in Beirut has been restored, there is a brand new soukh in the centre of the city and the Corniche promenade along the seashore is as alluring as ever. UK travel companies were offering special packages to Lebanon to visit the amazing historical sites and to enjoy the fantastic food and hospitality. The New York Times named Beirut in the top 10 places to visit in 2010. Now it has all changed. The US Department of State is advising US citizens to avoid all travel to Lebanon because of safety and security concerns even though most parts of Beirut and Lebanon are still relatively safe and free from violence.

And then there is the refugee problem. There are estimated to be at least 250,000 Syrian refugees who have moved across the border into Lebanon either forcibly or voluntarily to escape the violence. Many of these people are living in cramped and difficult conditions in camps close to the border and the aid agencies are struggling to cope with the numbers.

At the same time the country has experienced some benefit from Syria's misfortune. Some of the Syrian refugees are relatively well off - doctors, lawyers and bankers. They have acquired houses and are settling into their new surroundings. The school, of which I am a trustee, has increased its enrolment by around 15 per cent this year with Syrian pupils whose parents have moved to the area or have sent their children to board in a safe place.

I talked to some of these Syrian sixth formers over a meal in the school canteen. All very bright and articulate, they told me that although they were from different sides in the conflict, they felt like brothers and sisters in exile. Their main difficulty is that they want to go to the US or the UK to university but they cannot get visas from either government because they are Syrian.

At the other end of the socio-economic scale, Syrian refugees have a hunger to find work and a local building contractor told me that more than half his workforce is now Syrian. They are willing to work harder for less pay than the local Lebanese workers.

Sadly, almost everyone I spoke to expects the Syrian conflict to drag on for years rather than months so it will continue to cause great suffering and misery not just for the Syrian people but also to blight the lives of their neighbours in Lebanon. Our own little conflict seems almost trivial in comparison.

Against all the odds, despite the conflict in Syria and despite the interminable political stalemate in Lebanon itself, business goes on in the Lebanon. As with conflicts everywhere business finds ways of getting around the difficulties.

However, the resilience of the people of the Lebanon in the face of such adversity has to be admired. I am looking forward to getting back again next year.

Philip McDonagh (philipmcdonagh@ntlworld.com) is an independent economist based in Northern Ireland.