The Voices of Growth

In the first week of the conflict, Executive spoke to the private sector to guage its reaction to the war. (NB: Some of the figures quoted may have changed)

Pierre Achkar

The Lebanese Hotel Owners Association

Of course the situation is extremely bad for tourism. Tourism and warfare just do not go hand in hand. We were en route to a record year in terms of foreign arrivals, but now everyone has left. Hotels in the Greater Beirut area, all along the coast, as well as the Chouf, are performing badly, are almost empty. Only hotels, furnished apartments and restaurants are performing well in the region from Beit Merri to Bcharre. Here, most hotels have an occupancy rates of 90% to 100%. Most rooms are occupied by internally displaced from the South or from areas close to the areas most affected by the war. Generally, the poor have to stay in schools, but the middle class and wealthier prefer to rent a house or take a hotel room. However, as soon as a ceasefire is signed they will all go back to their area. What we need now is a comprehensive ceasefire, a final political solution, so Lebanon once and for all can come back as a tourist destination. It’s at this moment too early to talk about the damages and loss of income, but it will be significant.

Michael Dunn

Michael Dunn & Co.

My personal view on these events is quite straightforward. Israel had it all worked out and pre-planned. But now that the PR is turning against them, it will be interesting to see if they have the stomach. Regarding my work, a lot of us in real estate have made a big effort to get this far. None more so than Solidere and their investors. I have spent 10 years living in Lebanon and a lot of this time, it has been very hard slogging through the recession. 2005 and 2006 have been very promising. The Souks in downtown was well underway. Multi-national companies were expanding their businesses and taking more space. Right across the board, there was growth. For the first time in 10 years, we have seen real growth in the office market with a jump from $250 to $300/ m2. To me, it does seem as if there is a sadistic and jealous aspect to this attack on Lebanon. The economy was moving quickly forward and with that, there would come political progress too. I think Israel would resent the idea of Lebanon becoming more powerful. Ultimately, what we have lost is the confidence that had come back to the country. It takes years and years to create and develop that. And Lebanon needs it.

Rizk Khoury

Cumberland Insurance

The situation is catastrophic, as everyone else told you I’m sure. Because of the security situation, the economy has come to a standstill. In the insurance sector, we try to keep offering services to our clients, but it is very difficult with this situation. Some employees cannot come to work. On a financial level, it is very difficult to currently collect premiums. Basically, we are trying to keep our operation running, but live on a day-to-day base. We try to maintain our contacts with hospitals and brokers, but it is very difficult, as we operate on a 60% capacity. The effect of the crisis will be worsened every day this continues. Let’s hope it will not last long, so we can pick up the pieces, and continue our lives and work where we were before.

Marwan Iskander


The effect of this situation on the economy is obvious. First of all, Lebanon’s Gross Domestic Product was growing at a rate of 6% before the war started. Now there’s zero growth. The loss of income and opportunities because of the lack of 6% growth is the equivalent of $1.4 billion on an annual base. Secondly, there is the immense damage to Lebanon’s infrastructure, which is currently estimated at some $1 billion, but which is set to increase in case of further bombardments. Thirdly, the damage to the summer season, which normally runs from June to October, yet this year ended at July 10, while we had already recorded an influx of 40% more tourists over the first 6 months, compared to last year. A loss of an estimated $1.5 billion, although part of this amount is already included in the overall decrease in the country’s national income. In addition, the damage to plants and factories is currently some $100 million, without taking into account loss of production and profit. On top of that, there is the issue of housing and supplying the some 500,000 internally displaced, which I’d say costs an estimated $200 million. Finally, there’s the loss of government income, which amounts to $600 million over three months. Now, of course these are all estimates, but it may be clear that these are staggering figures and don’t paint a pretty picture.

Tareck Farah

Financial Funds Advisors

People need not be afraid of a currency devaluation. In the first stage of the conflict there was some lack of banknotes, but that was quickly solved. Lebanese banks have some $70 billion in deposits, 70% of which is in dollars. What’s more, the Central Bank has some $13 billion in reserves, which is huge, and that’s without the $1 billion Saudi Arabia has donated. So, there is no considerable pressure on the pound. Now, if we look at reconstruction and estimate damages at some $1 billion, I think, that’s achievable for the government, certainly with the foreign aid coming in. But this, if the conflict lasts for weeks, not months. Finally, a word on shares and the stock exchange. Most Lebanese shares are still being traded at the London stock exchange. Solidere lost some ground, as it went from a price per share of $21 to $15. But Solidere also has a lot of money in the bank thanks to the sale of land and as soon as the situation improves, the price per share will increase. So, there are some nice opportunities, and in fact we already see some investor demand.

Selim Wardy

Domaine Wardy

I lived through the 1982 invasion and this is much worse when you consider the size of the bombs they are throwing at us. I am working with a relief committee in Zahleh to ensure the people can get the basic necessities such as mattresses, food and drugs. People have medical conditions such as diabetes and we need to provide for them. They have nothing. We even have to provide coffins. The harvest this year? Who knows? We don’t even have any pickers. The place is empty. Come and see what is happing here; it is incredible. The place is empty. One of my vineyards has been damaged. I have 45 hectares in Zahleh, but most of my vineyards are in the north Bekaa and we are unable to reach them because the roads are so badly damaged. We don’t even have our raw materials for the fermentation. What would be really devastating to the morale of the wine sector would be the undoing of all the good work [Lebanon’s wine producers] have done in the past decade in terms of building awareness, improving what is an excellent product and trying to penetrate new markets. If we have no harvest, all that work will have been for nothing.

Nayef Kassatly

Kassatly Chtaura

The situation is crazy, really bad, I mean, there are no words. Because of the war situation we cannot open the factory and risk the life of some 100 employees. Suppose the factory gets bombed. What’s more, we transport our goods. Trucks are regarded as a legitimate target. But even if trucks were able to move, where would we go? The port is closed, the airport is closed, and even Masnaa is closed. Like most factories in Lebanon, we export 70% of our goods to Syria, Saudi Arabia and the Gulf. Till August, I think we will be able to pay salaries, but after that, we will see. Finally, the Bekaa is running out of petrol, which we need to keep fruits and products refrigerated. If we run out, we lose all our stocks. Of course, we are lucky compared to Dalaal and Maliban Glass, but we, like the rest of the Bekaa, are in total darkness. All I ask for is one road. Give us one road to Syria or Beirut. We are only 10 kilometers away from Syria. And the future? I don’t know. We cannot afford another crisis, so we have been thinking of a plan B. Maybe we should move the factory abroad.

Toufic Dalaal


Following the bombardment on Maliban, we decided to close the factory, so not to put our some 400 employees in danger. Consequently, no one got killed when the raid took place. They were two planes that fired several rockets. When they realized one building was still standing, they returned and bombed that as well. And so, everything is destroyed. We have to start from scratch. That’s why I’m currently in the States. I’m an American citizen and I came here to buy new machinery, as I want to reopen as soon as possible. We are obliged to do so, as we have a good reputation in the region. What’s more we have lots of work. We have several factories under one roof, one of which produces prefab homes for the US army in Iraq and Afghanistan. So far, our clients have been very understanding and allow us to deliver with some delay. In any case, contractually the fact we are late is not our fault. Why we’ve been hit? I have no idea. I’m still half under shock. But we are too far from the border to fire Katyushas. We live in a Sunni, not a Hizbullah area. So the only thing I can think of is economic warfare. Israel wants to break Lebanon.

Michel Waked

Liban Lait

On July 17, one Israeli plane flew over and hit the factory with a missile, and on its return fired another one. The whole factory is completely destroyed. What we will do now, I don’t know yet. There are many shareholders and first we have see what the situation will bring, peace, a ceasefire, under what conditions. So, before that is clear we cannot make a decision. I can’t say exactly what the damages are. We’ve asked a team of expert to make a detailed report, and I don’t want to make claims before that has been done, but sure, it will be millions of dollars. They hit us, because we employ a lot of people from the area. The Israelis warned before the war started that they would teach Lebanon a lesson it would never forget: messing with Israel will come at a cost, because we will put you 20 years back in time. And that’s what they did. What happened in the Bekaa is no such thing as collateral damage, no, they deliberately targeted the big factories. But let’s not forget that it is not just the Bekaa. In the Dahyeh and the South, lots and lots of small and medium-sized companies have been destroyed. I know one man who worked 20 years in Africa and set up small company in south Beirut. He lost everything.

Salah Baraki


The factory is 42 years old, of which I worked here 41 years, yet in two minutes everything was gone. There were Israeli jets that raided the factory and fired four or five missiles, I’m not sure. They were huge bombs. The craters are enormous and a some 20-meter steel beam landed on top of the office building. It seems they specifically targeted the production area. The damage, I don’t know, maybe $20 to $25 million. We have to see if the owner, an Indian businessman in London, will decide to rebuild. Meanwhile, what will we do? There are some 400 employees and their families who are dependent on this factory. What am I going to do? I’m 60, I have five children, two of whom are still in university. This should be my time to retire and enjoy, but now, everything is uncertain. Do I blame Hizbullah? No, I blame myself. I should have left the country ages ago.