Friday, December 01, 2006

Beirut merchants fear sit-in will deal fatal blow

Beirut merchants fear sit-in will deal fatal blow
'30 percent of downtown restaurants will close'

By Osama Habib Daily Star staff

BEIRUT: A prolonged sit-in and demonstrations in Beirut Central District will put many companies, restaurants and shops out of business, merchants warned on Thursday. "The situation is horrific. If the sit in lasts for 10 days at least, then I can assure you that 30 percent of the restaurants in the BCD will close their businesses for good," Paul Ariss, the president of the Restaurant Owners Association, told The Daily Star. Hizbullah and its allies are expected to stage a massive demonstration Friday afternoon to press the government of Prime Minister Fouad Siniora to give up more than one third of the Cabinet seats to opposition groups. But Siniora has indicated that he will not give in to the opposition's demands, prompting analysts to expect a long political crisis in the country. The Economic Committee, which represents the main business groups in the country, has met all of the leading politicians from both camps to highlight the negative effects of the demonstrations on the fragile Lebanese economy. But despite the intensive meetings, the committee was not able to get one pledge from opposition leaders to call off the demonstrations. "Friday's highly anticipated wide demonstrations in the heart of the Lebanese capital will virtually shut down most businesses, shops and restaurants in Beirut Central District and all the adjacent areas," Ariss said. He added that the restaurants in Lebanon are still reeling from the fallout of the war with Israel this summer and that any more security setbacks will cripple the industry. "I don't think we will have any customers if the protestors decided to stage a sit-in at the BCD for a long time," Ariss said. He added that some of the small sandwich shops may open to feed the protestors, but stressed that the restaurant sector in general will stay closed during the sit-in.

Ariss said each restaurant in the BCD has invested more than $300,000, meaning that the 100 restaurants have a combined investment of $30 million. The BCD is home to hundreds of companies, banks and shops which employ 3,000 people. The private sector has already incurred more than $5 billion in direct and indirect losses due to the war with Israel and analysts fear that the country's GDP will fall below zero percent by the end of the year. Merchants had hoped to make up for the previous drop in the volume of business during the Christmas season as many Arab tourists booked rooms in hotels in Beirut and the mountains. Now they fear the expected tourists will cancel their plans. Nadim Assi, the president of Beirut Merchant Association, said traders want a break from the continued political tension. "Merchants have compiled huge losses and debts since the July war and if demonstrations are carried out as promised, these losses will mount," he said. Assi appealed to all political groups to set their differences aside for the sake of the country and the economy. Economist Marwan Iskander predicted the private sector will loose around $30 million a day if the demonstrations take place. "Every day of strike will further harm the economy and shrink the $24 billion GDP," Iskander said. He added that the political stalemate will also reduce the chances of the donor conference taking place in Paris next year. "Even the opposition wants the Paris III conference to be convened in order secure grants and soft loans," he said. Iskander believes that the crisis will come to an end because no one has an interest in seeing the country fall apart. Adnan Kassar, president of the Economic Committee, said business leaders have not yet decided on their next step if the crisis continues. "We are studying all options," he said, declining to reveal whether the committee will call for another open strike.

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