Doing it Saudi style, except worse: Lebanon to go after Syrian businesses

Published November 26th, 2013 - 03:55 GMT
Ever since the eruption of the civil war in Syria, hundreds of thousands of Syrian refugees have fled to Lebanon. Struggling to find jobs, many refugees have instead opened business in the already crowded market.
Ever since the eruption of the civil war in Syria, hundreds of thousands of Syrian refugees have fled to Lebanon. Struggling to find jobs, many refugees have instead opened business in the already crowded market.

BEIRUT: Lebanon will close any illegal Syrian businesses after a nationwide survey on these enterprises is completed, a senior official at the Economy Ministry said over the weekend. The official, who spoke on condition of anonymity, told The Daily Star that the ministry was following up on this issue and intended to carry out a nationwide survey of the illegal Syrian businesses operating in Lebanon in order to shut them down.

“We are informing the mayors in the concerned areas, and they are closing these businesses,” he said.

The official said that most of the shops being shut down were located in Tripoli and in the Bekaa Valley. “But there are also some shops that will be closed soon in Beirut and [others parts of] north Lebanon as well,” he said.

The official added that Syrians were welcome to open legal businesses and compete fairly. According to the official, fair competition by Syrian businesses may actually help consumers, because prices will go down.

Ever since the eruption of the civil war in Syria, hundreds of thousands of Syrian refugees have fled to Lebanon.

Struggling to find jobs, many refugees have instead opened business in the already crowded market.

Complaints of illegal competition from Syrians have grown as the refugee population in Lebanon has swelled, with many sectors claiming to be negatively impacted.

Mohammad Itani, a Beirut taxi driver, said he was drastically affected by the competition from Syrians.

“Over 60 percent of my business dropped during this past year due to competition from Syrian drivers,” he told The Daily Star. “Even though Syrian taxi drivers are ignorant of Lebanon’s routes, they work in the field by outsmarting their clients and asking them for directions.”

Itani expressed his anger at Syrian taxi drivers who charge lower prices even when they are asked to drive a long distance.

“Lebanese used to benefit from long distance transportation services by charging regular taxi fees,” he said, “but this is not applicable anymore due to the lower prices charged by Syrian taxi drivers.”

Itani’s grievances echo those of Lebanese in other businesses.

“We have seen some losses lately due to the Syrian presence in the market,” said Selim Keis, owner of a minimarket on Mar Elias’ main street.

Keis argued that Syrians tend to minimize their expenses by using their shops as living quarters, which helps them in lowering their prices and competing with Lebanese businesses.

“We pay all our taxes and dues, but I don’t think they do,” he said.

Lebanese business associations have sounded warning bells over the alleged increase in illegal businesses.

“We have received many complaints from Lebanese merchants saying that Syrians are operating in an illegal way that is hampering their businesses,” said Nicolas Chammas, chairman of the Beirut Traders Association.

“We have got some reports lately stating that over 100 illegal businesses have opened in Beirut,” he said.

Based on current regulations, foreign workers are required to get residence permits from General Security and a work permit from the Labor Ministry, in addition to registering the company in the commercial register and obtaining licenses from the municipality and governorate.

BTA’s chairman argued that Lebanon was already suffering from a lot of other factors and the Syrian crisis was an additional burden.

The refugees put an additional strain on an economy already declining due to two years of weak government performance, especially in its economic policy.

Most business sectors in Lebanon are impacted by the crisis, but exports especially have seen a sharp downturn largely because the land route through Syria has been virtually closed off.

Tourism has also been hit hard because of a drop in the number of Gulf visitors due to threats and the deteriorating security situation.

“What we have been experiencing since the beginning of the Syrian crisis is death by a thousand cuts,” Chammas said, adding that “if this crisis had come at a time of economic growth we wouldn’t have suffered the same way.”

Echoing Chammas’ views, Zouhair Berro, head of the Lebanese Consumers Association, highlighted the negative repercussions of the competition from Syrian businesses on the Lebanese economy.

“This is mostly hurting small Lebanese businesses and we have witnessed lately the closure of some of them,” he said.

Berro criticized the government for not easing the negative effects of the crisis, adding that they were likely to increase in the near future.

“The government is absent,” he said. “It should intervene very quickly to solve this issue by organizing the presence of the huge number of Syrians in Lebanon.”

Lebanon hosts the largest number of Syrian refugees in the region. In its latest report on the Syrian refugee situation in Lebanon published around a week ago, the U.N. refugee agency said the number of displaced in the country stood at 816,000, with around 11,000 newcomers between Nov. 8 and Nov. 15.

“The number of Syrians in Lebanon will soon reach half the number of Lebanese people,” Berro said. “The government should be able to deal properly with the negative impact of this issue,” Berro said.

But others say the reaction to the presence of Syrian refugees is overblown and highly exaggerated, explaining that the presence of the Syrians has added value to the economy.

The president of the Food Industries Association, George Nasrawi, announced several weeks ago that demand for consumer goods had increased due to the refugee influx to Lebanon, which had motivated some industrialists to expand production.

Louis Hobeika, professor of economics and finance at Notre Dame University, is also not bothered by Syrians opening businesses in Lebanon on condition that they operate in a legal way.

“It doesn’t bother me as long as these businesses follow the Lebanese law and pay taxes,” he explained.

Hobeika believes that consumers will be much better off if fair competition increases and prices diminish.

“How can I refuse that Syrians open businesses in Lebanon while Lebanese are operating successful businesses all over the world?” he asked. “We have to be fair.”

Hobeika said that some Syrians were very skilled and work in areas needed in the Lebanese market such as plumbing and car mechanics.

Syrian skills have also been reflected in the food industry in Lebanon.

Dip ’N Dip, a famous dessert shop, opened months ago on Bliss Street in Hamra, attracting clients with its wide selection of items cooked with Belgium chocolate.

“We are operating in a legal way, and no one can say that we are competing because the idea is new in Lebanon,” said Majed Hajj Said, a Syrian employee of the shop.

Hajj Said said that Lebanese love the idea of Dip ’N Dip as much as Syrians, which prompted the shop owner to start with an expansion plan in Lebanon and open six more branches by the end of 2014.

“All of the employees here are Syrians, but we do not have a problem to hire Lebanese as well in the near future,” he added.

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