Hardened Lebanese merchants battered by Beirut blast

BEIRUT (Reuters) – Sleep Comfort survived Lebanon’s 15-year civil war. But nothing could have prepared the high-end family furniture business for the Beirut port blast that destroyed swathes of the capital.

Employees barely escaped glass shards which flew across the showroom, located in one of the hardest-hit districts. In an instant, one-third of the furniture stock was lost and the factory gutted, incurring some $600,000 in losses.

“I am only here for my father otherwise I would have left,” said chief sales manager Jad Ayoub.

“I would go anywhere.”

The biggest blast in Beirut’s history killed at least 170 people, injured 6,000 and triggered protests against a political elite blamed for political turmoil and economic collapse. Homes and businesses were razed in the country’s commercial heart.

Authorities have said they will hold those responsible to account.

The Aug. 4 explosion dealt a catastrophic blow to everyone from mechanics to major food importers, already struggling amid a financial crisis that hammered the currency and sent unemployment soaring.

Beirut was built around its port, one of the region’s busiest and for centuries a lifeline for Lebanon’s merchant culture.

The blast badly damaged it, and while some shipping lines say they are resuming visits to its container terminal, traders and business owners say they have no visibility on what goods survived or when imports can resume.

“The government decided that anything in the port has to be analysed for ammonium nitrate residues … Everything is at a standstill. There is nobody to answer us,” said Hani Bohsali, general manager of Bohsali Foods SAL and president of Lebanon’s food importers syndicate.


He said the 52 companies in the Syndicate of Importers of Foodstuffs, Consumer Products and Drinks could suffer losses of no less than $50-60 million.

“It is indeed a disaster. In case these goods were demolished (along with) a good part of my working capital, can I continue in the same volumes I used to before? Definitely not. Will the bank give me new credits? No, because of the financial crisis.”

Lebanon imports nearly 85% of its food. It defaulted on its foreign currency debt in March, citing critically low reserves.

The government, which quit this week over the blast, had launched talks with the IMF for a bailout but they were put on hold due to an internal row over the scale of financial losses.

Authorities have said initial estimates show $15 billion in damages, a bill Lebanon cannot pay.

Insurance firms have taken a hit.

Ghassan Saab, vice chairman of Fidelity, said the company has received 500 claims for property and motor damages as well as those from political unrest running into the hundreds of millions of dollars.

“I doubt that all of the 60 insurance companies operating in Lebanon would survive the 2020 challenges which are the financial crisis, Covid-19 and the explosion,” Saab said.

“Definitely, the government resignation will help, but the government is not enough. Lebanon needs a complete reform to recover.”

Foreign donors have linked any financial lifeline to the state to the enactment of long-demanded reforms.

After the blast, the central bank told local banks to lend dollars interest-free to people and businesses for essential repairs, saying it would in turn provide those financial institutions with the funding.

The banking association is studying “specific mechanisms” to help customers and says it will cooperate with the central bank. But many business owners doubt they will get any help from banks that have frozen people out of hard currency savings.

“We can’t go to the banks, they have no money,” said George Saab, who incurred losses of $500,000 from damage to his laundry and restaurant equipment business.

“The government are a bunch of crooks. There is nothing we can do. No one is helping us. The world community has to rescue us.”

Source: Read Full Article