Kidnappings, blocked roads, robbed banks and travel warnings are among Lebanon’s latest upheavals. The country’s economy is feeling the pressure with stores and restaurants closing down, hotel occupancy rates plummeting and trading activity dwindling. The private sector is sounding the alarm. For a better understanding of the severity of the economic crisis, Executive sat with Mohammad Choucair, president of the Chamber of Commerce, Industry and Agriculture (CCIA) of Beirut and Mount Lebanon.
You have said that Lebanon is witnessing its worst economic crisis. What is leading you to such a gloomy observation?
Lots of companies are closing down; just in Solidere, 254 stores shut down since the beginning of 2011, so imagine how many closed in Lebanon over this period. We are witnessing crimes for money with people killing each other to steal 100,000LL or 200,000LL. That’s how bad the situation is. Lebanon has never seen six banks get robbed over a period of six months, neither has its minister of labor ever received requests for mass redundancies. The state can no longer enforce law and order. We are back to the language of threats and kidnappings. Now Qatar is threatening us and saying that if any Qatari gets kidnapped, they will kick out their Lebanese residents and there are more than 55,000 in Qatar. In the Gulf, there are 400,000 to 500,000 Lebanese workers. If Lebanon is still standing, it’s thanks to them. If they lose their jobs, we will eat each other.
Are there more companies at risk of bankruptcy going forward?
There are hundreds of companies in danger of bankruptcy and all sectors are being hit. The labor minister is telling me there are mass redundancies and this is what I was afraid of when the minimum wage increase was implemented. Trading activity in Beirut is down 50 to 70 percent so far this year over last year and outside Beirut, it is down from 70 to 85 percent. How [long] will companies last? I think not too long. I hope no company will close by the end of the year but if I look at bounced checks, at the 10,000 containers sitting in the ports of Beirut with owners unable to pay the costs of shipping, the taxes or the customs, I am concerned.
How much did the minimum wage increase contribute to heightened economic pressure faced by the private sector?
The minimum wage increase added 15 percent to the costs of the private sector. It was a huge mistake and the private sector takes responsibility. We couldn’t handle the political faction on this issue. We should have done strikes, we should have said no. Today we are all paying for it, the private sector, the workers and the government. The government can’t pay for the raise for employees of the public sector and if it does pay, there is a danger to the Lebanese lira.
The National Social Security Fund (NSSF) is calling for the salary ceiling of contributions to the healthcare fund to be raised from LL1.5 million to LL2.5 million. How will this be felt in the private sector?
The private sector can’t support anything anymore. When we raised salaries [as a result of the minimum wage increase], it brought in additional revenues of $250 million for the NSSF. When they wanted to raise the ceiling, we objected. The economic associations have now decided to raise the ceiling to LL2 million for two reasons: one is that this is a human issue and I won’t tolerate citizens being humiliated when receiving treatment and second of all, we can’t support more social troubles in Lebanon. With a LL2 million ceiling, the NSSF will no longer have extra hospital costs and it will be left with an additional $11 million.
You have recently called for opening the Qlaiaat airport. How essential is this in supporting the Lebanese economy?
From an economic point of view, it is essential for the north. The main airport will always be the Rafik Hariri International Airport in Beirut. We don’t want to eliminate it but we need the Qlaiaat airport for two goals: so that Lebanon becomes the regional hub of shipping and for the low cost airlines.
Wouldn’t the airport need significant investment to be ready to operate?
It doesn’t need further investments. Airbus 330 and Boeing 777 can land there. The land size is 5.5 million square meters (550 hectares) and it has a runway of 3.6 kilometers that can be increased by another 400 meters. The other airports have a size of three million square meters (300 hectares) and can only cater to small planes. I am preparing a letter on behalf of the CCIA asking the government to allow us to run this airport. The majority of airports in Europe are run by the private sector and we hope to do that too.
Are you willing to call for a strike if the economic situation does not improve?
Who are we going to strike against? Government officials? They are not here. Today, my priority is to have security as without it, we can’t have economic growth. I’m asking for the state to enforce law and order. I congratulated parliamentary speaker Nabih Berri on his decision [on August 22] to “cut the hands” of every person who cuts the road to the airport; if only they took this decision three months ago and broke the hands, legs and head of every person who cut any road and not just the one leading to the airport.
What do you want from government officials?
I have just one wish and it is for the state to enforce law and order without which we can’t bring back investors. There should be justice on the kidnappings. If every person who needs money goes off and kidnaps someone then half of the population would be kidnapped. This is a problem; it’s not a joke. I hope that the government officials will save what is left for the benefits of the Lebanese citizens. We are approaching elections and maybe some politicians can only focus on having an extra deputy here and there but you can’t enjoy ruling when the people are hungry and broke. The more people are hungry, the less they will let you rule. I am not afraid when a citizen demonstrates but has a job — I am afraid when he takes to the streets and he is unemployed.
Is there light at the end of the tunnel?
I wish I had a positive message for you. The kidnappings brought us back 20 to 30 years and it reminded people of the war. We have a responsibility as an economic association to bring back confidence for the foreign investor, but he will think a lot before coming back. From 2005 to 2010, foreign investments reached $4 billion to $5 billion a year and last year it was zero. This year, it will fall into negative territory as some projects are being withdrawn. It will take at least two to three years to bring back confidence. We need to focus on bringing back the Lebanese expat first. Despite all this we are staying in Lebanon. Hopefully it’s a phase that we will overcome in the quickest way possible; Lebanon will be on its feet again soon and we will see smiles on people’s faces.