The downside of uprising

Stymied commercial flows hit Lebanese businesses

When you walk into Al Haidari sweet shop in Khaldeh, 20 kilometers south of Beirut, employees will greet you with a smile and free baklawa, but the forced cheer belies a grimmer reality.

“We have 70 employees in our branch in Syria, but we had to make up for the huge losses we’ve suffered; this is why we opened this branch [in September 2011],” said Wassim Haidar Ahmad, owner of the shop, who declined to disclose figures about his losses. 

For 13 years Ahmad’s first sweet shop, in a small shopping center that included a pharmacy and supermarket only a few meters away from the Syrian checkpoint at Jdeidet Yabous–Masnaa, acted as the final stop for Lebanese travelers on their way back from Damascus. Since the start of the uprising in Syria last year, however, businesses like Ahmad’s that rely on the flow of passengers between Syria and Lebanon have suffered, with those in favor of the regime and those against both hit equally hard. 

Lebanese General Security failed to provide official data, but other business owners confirmed Ahmad’s claims of a sharp drop in the number of passengers and vehicles crossing the Syrian border.

“Business has been a disaster,” said Ghassan, owner of Sunrise supermarket and currency exchange office in Chtaura. Travelers usually make a stop in this town in the Bekaa to exchange money and fill out forms before driving the last half hour to Masnaa.

“Look at the square; on a day like today [Saturday] it should have been packed. Shop owners and families used to visit Damascus every weekend to get their supplies,” added Ghassan. “But since the start of the events in Syria people have been scared to go there, and prices of [Syrian-made] commodities are not that cheap anymore.”

Exchange of commodities between the two neighboring countries has suffered, but varied depending  on the border crossing according to data for the first three quarters of 2011 disclosed by the Lebanese customs directorate. The value of imports coming in through Masnaa on the international road between Damascus and Beirut decreased only 4 percent year-on-year, but the amount going through Qaa, which links the Bekaa to the turbulent Syrian city of Homs, has dropped by 44 percent. Other border crossings have seen minimal change: imports through the northern access point of Abboudieh decreased in value by 1 percent in comparison to figures from 2010, while the northern border point of Arida actually saw a 2 percent increase in imports year-on-year. Lebanese customs, which totaled LL2,207 billion [$1.47 billion] during the first three quarters of 2010, dropped to LL1,707 billion [$1.14 billion] year-on-year for the first three quarters of 2011, marking a loss of 22.4 percent. 

During the same period exports to Syria also fell, as their total value dropped 10 percent year-on-year. While the value of exports through Masnaa increased 2 percent, exports through Abboudieh, Arida and Kaa decreased 6 percent, 35 percent and 23 percent, respectively, according to Lebanese customs data.

Taxi blues 

Merchants and industrialists have not been the only ones to suffer from the crisis. A visit to Charles Helou taxi and bus station in Beirut, the main point of departure to Syria, helps explain why business has been slow near the border.  Customerless taxi drivers aimlessly pacing the sidewalk or playing cards have become a common sight. Mohammad Suleiman drives a fifteen-passenger minibus to Homs. When asked about his business, he said without hesitation: “You can see for yourself — zero.” 

“Lebanese passengers have been reluctant to travel to Syria since [Prime Minister Rafiq] Hariri’s assassination [in February 2005],” added Suleiman, in reference to the political tension that followed accusations of Syrian involvement in the killing. “But since the start of the events in Syria, I have barely had any Lebanese passengers at all.”

Guiragos Hagopian of Zeitouni Tour, which operates a shuttle service between Beirut and Aleppo, agreed that road travel to Syria has been hit because of the lack of Lebanese passengers. Three drivers who operate taxis between Beirut and Damascus, who spoke on condition of anonymity, gave similar testimonies. They all concurred that their weekly trips to the Syrian capital have dropped by more than half since the start of the turmoil. One of them admitted that business during June, July and August, usually the peak season, was “dead”. 

“Whereas [before] I was able to arrange trips for my brothers and cousins, who are also taxi drivers, now I can barely find any for myself,” he added.  

An employee at a small taxi company in Beirut, who also wished to remain anonymous, gave a more positive account; he mentioned that the number of trips to Damascus and Jordan that his company organizes has not changed. Trips to Jordan travel through the province of Daraa, the first area to witness anti-regime protests in Syria. He admitted, however, that trips to Homs, the city in northern Syria that continues to witness intense demonstrations and military clashes, have dropped from six to two per day since October 2011.  But the change in the number of passengers has not affected the cost of travel since last year, according to several drivers who said that rising fuel costs prohibit them from bringing prices down. The fee-per-passenger in a sedan taxi from Beirut to Damascus still ranges between LL22,000 [$14.67] and LL25,000 [$16.67]. Similarly, a bus ticket from Beirut to Aleppo still averages LL20,000 [$13.33], according to Hagopian from Zeitouni Tour.

What road ahead

As Executive went to print, the situation in Syria had shown little sign of improvement, with satellite channels continuing to report daily killings in Homs, the countryside surrounding Damascus and elsewhere.  Until the situation on the ground is resolved, the taxi drivers, the shops and small businesses along their routes between Lebanon and Syria and the industrialists that depend on the flow of commerce between the two countries are unlikely to see their fortunes improve. The Lebanese press also reported that cargo shipments coming from Turkey have been delayed at the Turkish-Syrian border, causing them to take up to 10 days to reach Lebanon, compared to only three to four before the crisis started. This has forced some Lebanese traders to import Turkish-made commodities by air rather than overland, spiking transportation costs from $3.50 to $7.50 per kilogram. Ziad Bikdash, vice-president of the Association of Lebanese Industrialists, expressed his fear over what will happen to Lebanese exports if the crisis in Syria persists. 

“The roads [to Syria] are still clear, but many shipments through Syria have been delayed and we’re scared that merchants in Arab countries would eventually stop importing Lebanese goods,” he said. He added that bypassing Syria through maritime transport might raise shipping fees from something between one and a half to three times the original cost. 

“We’re trying to set up new markets in Europe, but we need the Ministry of Foreign Affairs to step in and appoint competent commercial attachés in each of our embassies there,” said Bikdash, though given the state of Lebanese bureaucracy, he doubts it will be able to come up with a cure to the loss of Syrian access any time soon.