Lebanese industrial exports benefit from Syrian conflict
With most of its industry in shambles as a result of the 23-month-conflict, Syria is now increasingly dependent on Lebanese-manufactured exports to meet its immediate needs, officials and industrialists told The Daily Star Monday.
However, they warned new markets were still needed as industrial exports in general had plunged in value.
“We do not at all like to say that about our neighbors but as they say ‘one man’s misery is another man’s fortune,’” Industry Minister Vreij Sabounjian said, adding that demand for construction materials and foodstuffs had been increasing in the neighboring market.
“Many plants in Syria have unfortunately been destroyed or abandoned by owners as the conflict raged. This led to some of the demand shifting to foreign products and Lebanese industrialists and traders are covering some of it,” he said.
News media have reported that hundreds of industrial plants in Aleppo, Idlib and Damascus’ suburbs were either razed to the ground by combatant groups or looted.
But Sabounjian and other industrialists do not see Syria as a viable market in the near future, adding that demand in the war-engulfed nation is inconsistent and restricted to bare necessities, particularly as the Syrian pound continues to slide.
The country’s currency hit a record low of 105 pounds to the dollar last year on the black market, before recovering slightly.
Jacques Sarraf, chairman of Malia Group, a leading Lebanese industrial firm, told The Daily Star that the increase in exports to Syria was primarily for the reason that the Lebanese border is the only “politically open” border.
Syrian and Lebanese traders, he said, were meeting the remaining local demand through Lebanon.
“This applies to both Lebanese-made and imported products. This year Lebanon imported the highest volume of goods in its history,” he said, arguing that official export figures did not reflect all the trade happening between the two countries.
“A big portion of the trade between the two countries is happening through nontransparent methods,” he said.
Official figures show Lebanon’s industrial exports declined by nearly 12 percent in the first 11 months of 2012, according to an Industry Ministry report released Monday.
Total industrial exports reached $2.688 billion; $352 million lower than during the same period in 2011. Compared to 2010, the decline stands at 8 percent, the report said.
But Syria received nearly 12 percent of industrial exports in November, outpacing Saudi Arabia and United Arab Emirates, Lebanon’s traditional top export markets.
In the same month, exports fell 13.9 percent, signaling that exports were declining at a faster rate toward the end of the year in spite of the increase to Syria.
But Sabounjian continues to see hope in spite of the figures.
He said most of the decline was accounted for by the precious stones and metals sector, which are highly volatile markets easily affected by the economic slowdown in Europe and some regional countries.
The minister said his ministry was striving to open up export markets outside of the Arab world and Europe, where, he said, demand for Lebanese products had stagnated.
Both experts, however, agree that the conflict in Syria has no overall positive impact on the Lebanese economy.
“The conflict in Syria is by far more devastating on the Lebanese economy than most people think,” said Sarraf, a businessman who made investments there before the conflict broke out.
- Tunisian, Moroccan Chambers of Commerce meet to discuss economic partnership
- Egyptian economic experts predict inflation rate will continue to climb
- In wake of failed coup, Turkey shuts down all Gulen-linked businesses
- World Bank offers Jordan $1.4B over six years for Syria response
- Kuwait fights budget deficit: Reexamining government salaries, expatriate labor