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Home / Business / While the Lebanon economy is slipping, the line of duty is working | Article [AMP] | Reuters

While the Lebanon economy is slipping, the line of duty is working | Article [AMP] | Reuters



BEIRUT BEIRUT (Reuters) – Karim Daya was one of the last of his friends and family still in Lebanon. Now that the job is gone, he packs the bags.

"That's it. It's just getting worse and worse, and where are we going? Nobody knows," said Daya, 27, a graphic design educator. "I want to be very sad. But there is no future for me here."

His emotions reflect the frustration of many young Lebanese trapped in the worst economic crisis since the 1

975-90 civil war.

The coffee bar chain Daya was working on had already fought before huge protests, fueled by anger against corruption and cronyism, overthrew the government last month. The latest turmoil dealt with the fatal blow.

He plans to travel to Bulgaria, where his sisters live, to look for work – a decision he had tried to postpone. But with 37% of Lebanon's youth already unemployed, the outlook is bleak.

All over Lebanon, the banks are closed and business stops.

Beirut's streets are lined with empty restaurants and shuttered shops. More and more companies have either gone bust or suspended work and are shooting workers mass to try to survive.

Employees at 15 companies told Reuters that they had been laid off or taken payroll over the past month, along with dozens of colleagues.

"NO CASH"

"This economic stranglehold reached a point where it erupted," said Pierre Boutros, an engineer who runs a construction company and a furniture factory. "It's a miracle that we've made it this far."

He had to cut wages and lay off dozens of workers in recent weeks. He will probably let more go. The company is down to 70 employees, from a peak of 425 people before 2016.

"Credit facilities stopped, there is no cash … Traders who used to give you time now only deliver if you pay in advance. People don't have money to buy. At the end of the day, no money comes in. We shrunk."

If the crisis drags on, Boutros can freeze work "for a month or two or three until it is resolved," he said. "Then dust us off and start working again."

The losses for companies come after years of low growth, government paralysis, regional conflict and capital inflows from abroad that have dried up.

The banks, which closed in mid-October, have blocked most dollar withdrawals and transfers abroad to avoid capital flight. They close again this week after a staff strike over security fears as people demand access to their money.

The hard currency crisis, for its part, has hampered trade, pressuring people to cash in at home and pushing the Lebanese pound's 22-year-old stick to the dollar.

Business owners say they must make most cash transactions in the black market, where the pound has depreciated to about 20% below the fixed interest rate. Suppliers are now demanding payments in dollars or in local currency based on an unofficial exchange rate that is changed by the trader and the day.

"STUCK HERE"

"We can't take it anymore. I can't spend on my kids," said Ali, a salesman and father of two whose salary was cut in half. "It will be much more chaos if things continue this way."

Some families have filled up supplies such as canned food, rice and flour. Several people said their bankers told them to repay US dollars.

With a small industrial sector and few natural resources, the economy relies on imports and cash injections from Lebanese abroad, which have fallen in recent years, and squeezed the central bank's foreign exchange reserves.

Lebanon creates six times fewer jobs than labor market needs and exports more graduates than any country in the Arab world, according to a 2019 government study.

Amale's three children all work abroad. A 60-year-old nurse lost her job at a hospital that laid off 40 people. "They can lay down entire floors," she said. "I cried a little."

Majd Chidiac, 23, copywriter, was also laid off. "The people who haven't traveled yet will travel. And those who can't afford to travel will get stuck here and become poorer. That's the sad reality."

(Additional reporting by Alaa Kanaan and Dala Osseiran; Writing by Ellen Francis; Editing by William Maclean, Tom Perry, Philippa Fletcher)


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