‘It’s scary’: Israel war fears batter Lebanon’s struggling economy

Lebanon’s Businesses Suffer Amidst Growing Fears of War

Beirut, Lebanon – Yara Adada, 28, sits at the window of her bakery and coffee shop in Gemmayze, a lively central Beirut neighbourhood known for its bars and restaurants.

Adada is the only one there. “We’re swatting flies,” she says.

The Impact of the Conflict on Businesses

Behind her, the counter is filled with pastries, the coffee machine is silent and the chairs and stools, usually full, are empty. Since the beginning of the conflict between Hamas and Israel, this has been the scene at Adada’s coffee shop and many other businesses as fears grow that the country could be pulled into a war with Israel.

“We’ve seen a very significant drop in customers, more than 50 percent,” Adada said. The usually buzzing coffee shop would get between 30 and 35 customers a day. “Now, on a good day, I have 10 to 15. Today it’s already midday and I only had one.”

“Yesterday I only made $4. It’s scary,” she said.

Economic ‘agony’

Since October 7 and the beginning of the ongoing exchange of fire between Hezbollah and Israel in southern Lebanon, the restaurant sector has seen a drop of up to 80 percent in business, according to Lebanon’s syndicate for restaurants, nightclubs and cafes.

Tourism, responsible for 20 percent of Lebanon’s gross domestic product (GDP), has been hit badly. Due to the volatile situation at the border, Australia, France, Germany, the United Kingdom, the United States and many other nations have not only urged their citizens not to visit Lebanon but have advised those in the country to leave while there are still commercial flights available.

The warnings came as airlines such as Lufthansa, SWISS and Saudia cancelled their flights. On October 20, Lebanese flag carrier Middle East Airlines announced it was reducing its flights “due to the ongoing circumstances in the region and the reduced insurance coverage for aviation risks in times of war”.

The decision, criticised by the government, has led to a drop of 80 percent in the Lebanese airline’s flights. At the Beirut airport – the only one in the country – there are now few planes on the tarmac, no queues, and hardly any passengers.

The Impact on Food Security

Lebanon is also almost completely dependent on imports for food, fuel and medicine, 70 to 80 percent of which arrive by sea.

In 2006, the country’s ports were unusable because of the threat of Israeli warships but Lebanon could fall back on healthy reserves, such as grains, that were kept in the Beirut port silos, which have since been destroyed by the 2020 port blast.

The still half-destroyed port can be seen from the office of the Lebanese minister of economy, Amin Salam.

He tells Al Jazeera Lebanon is in a worse position than ever and that food security is one of the main concerns for the government as it develops its emergency plan for possible war.

Lebanon at risk of food security ‘disaster’

Lebanon’s current reserves of food, fuel and medicine are only enough for a worrying two to three months, the minister said, adding that reserves should normally be enough to last for “about a year”.

Salam said the government is working with private partners to increase the shipment of basic commodities in the coming weeks. However, vendors are asking for payments in advance “because they know [Lebanon’s] banking system is paralysed … so that’s kind of creating another layer of obstacles”, he explained.

‘Forget about tomorrow, deal about today’

Salam recognises that Lebanon is at risk of a “disaster” if war breaks out. But, he concedes, the country’s financial woes did not start on October 7.

When he took office in 2021, Lebanon was already facing one of the worst financial crises in modern times, with losses standing in excess of $72bn, a 98 percent devaluation of the national currency, 80 percent of the population living below the poverty line, and the central bank in ruins after its governor was charged with defrauding the public finances to the tune of $330m.

An agreed loan of $3bn from the International Monetary Fund has been seen as

SDGs, Targets, and Indicators in the Article

SDGs Addressed or Connected to the Issues Highlighted in the Article:

1. SDG 1: No Poverty
2. SDG 2: Zero Hunger
3. SDG 3: Good Health and Well-being
4. SDG 8: Decent Work and Economic Growth
5. SDG 12: Responsible Consumption and Production
6. SDG 16: Peace, Justice, and Strong Institutions

Specific Targets Under Those SDGs Based on the Article’s Content:

• SDG 1.1: By 2030, eradicate extreme poverty for all people everywhere.
• SDG 2.1: By 2030, end hunger and ensure access by all people, in particular the poor and people in vulnerable situations, including infants, to safe, nutritious, and sufficient food all year round.
• SDG 3.8: Achieve universal health coverage, including financial risk protection, access to quality essential health-care services, and access to safe, effective, quality, and affordable essential medicines and vaccines for all.
• SDG 8.5: By 2030, achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value.
• SDG 12.2: By 2030, achieve the sustainable management and efficient use of natural resources.
• SDG 16.1: Significantly reduce all forms of violence and related death rates everywhere.

Indicators Mentioned or Implied in the Article:

• Indicator 1.1.1: Proportion of population below the international poverty line, by sex, age, employment status, and geographical location.
• Indicator 2.1.1: Prevalence of undernourishment.
• Indicator 3.8.1: Coverage of essential health services (defined as the average coverage of essential services based on tracer interventions that include reproductive, maternal, newborn and child health, infectious diseases, non-communicable diseases, and service capacity and access).
• Indicator 8.5.1: Average hourly earnings of female and male employees, by occupation, age group, and persons with disabilities.
• Indicator 12.2.1: Material footprint, material footprint per capita, and material footprint per GDP.
• Indicator 16.1.1: Number of victims of intentional homicide per 100,000 population, by sex and age.

Table: SDGs, Targets, and Indicators

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Source: aljazeera.com

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