Business leaders warn of economic collapse over political impasseJune 12, 2013 01:18 AM
| The Daily Star |
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| Mohammad Choukeir speaks during a meeting for the private sector at BIEL in Beirut, Tuesday, June 11, 2013. (The Daily Star/Mohammad Azakir) |
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BEIRUT: Leading business leaders warned Tuesday of total economic and financial collapse in Lebanon if the tense political and security situation did not come to a quick end.
Citing alarming economic figures, the speakers at a BIEL meeting called on politicians to set aside their differences and stop tampering with the livelihoods of the Lebanese and the country.
“We came here to tell the political forces stop squandering the basic elements of the Lebanese economy and stop forcing the young generations, tourists and investors to leave the country,” former Economy and Trade Minister and leading businessman Adnan Kassar told hundreds of businessmen, merchants, bankers and investors.
The private sector, which employs more than 600,000 people, have expressed outrage over the politicians’ inability to end their differences and also denounced the involvement of some Lebanese parties in the Syrian war.
Many investment banks and rating agencies have expressed deep alarm at the political and economic deterioration in Lebanon and cautioned that the country could see its GDP fall below 2 percent in 2013 if the spillover from the Syrian conflict did not come to an end.
Citigroup indicated in a report that the real economy continued to be significantly affected by the prevailing political uncertainties, as trade and investments have underperformed.
It noted that activity in the construction and housing sector has stagnated, while tourism activity has receded.
But it said the banking sector, which underpins sovereign debt sustainability, remains robust, with non-resident deposits and private sector credit growing in double digits, and dollarization and risk premia remaining stable. It added that Lebanon’s attempts to develop its potentially substantial offshore oil and gas resources had been dealt a blow by the current political impasse, and expected the oil and gas tender process to be put on hold.
Kassar stressed that the recent warning issued by the Gulf Cooperation Council about the deteriorating conditions in Lebanon was a strong message to all the Lebanese politicians.
He added that the Lebanese economy would suffer further if Arab tourists heeded the advice of their governments to avoid Lebanon for security reasons.
Charles Arbid, head of the Lebanese Franchise, said consumer confidence fell by 36 percent, the number of tourists dropped by 17.5 percent and foreign investments plunged by 68.6 percent in recent months.
Beirut Chambers of Commerce President Mohammad Choucair said all the appeals made by businessmen and merchants in the past have fallen on deaf ears.
“We have entered the taboo area and all the diplomatic appeals are no longer useful. We are not talking about economic slowdown or a drop in GDP growth. We are now talking about total economic collapse. We are talking about a recession and stagnation,” Choucair said.
He added that the pressure and escalation should be centered on the political class which only shows concern if its interests are under threat.
“I call on all sides to denounce sectarianism and confessionalism and rally behind one demand: protecting the livelihoods of the Lebanese,” Choucair said.
Other speakers did not dismiss the possibility that many Lebanese investors and merchants might take their businesses to more stable countries. They said economic pressures had compelled investors to consider exiting the Lebanese market permanently.
Head of the Association of Banks in Lebanon Joseph Torbey called on the Lebanese not get involved in the conflicts in the region.
“Anyone who thinks a small country like Lebanon could benefit if it is directly involved in the conflicts in the region is naive,” Torbey said. He called on the president of the republic to invite all parties in the country and persuade them to refrain from any involvement in the conflicts outside Lebanon.
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