After more than a year and a half of closure of the Saudi market due to the Covid-19 pandemic, Lebanese industrialist Ziad Bekdache, specializing in paper, was preparing to send his first delivery to Saudi Arabia, when the news broke. fallen like a cleaver. On October 29, Riyadh recalled its ambassador and banned imports from Lebanon to protest against criticism from the Minister of Information, Georges Kordahi, against the war in Yemen.
The Sunni Gulf monarchies are thus putting pressure on the Cedar Country to extricate itself from the grip of the Shiite Hezbollah party, which supports the Houthi rebellion in Yemen. Collateral victim of this showdown, Mr. Bekdache found himself with $ 50,000 worth of notebooks on his hands, a cargo still stored in the Oriental Paper Products factory in Roumieh, on the outskirts of Beirut.
“The problem between the Gulf and Lebanon is political. I was amazed that Saudi Arabia and Bahrain ban imports. It is punishing a majority of the population for the actions of a minority ”, deplores Mr. Bekdache, of which Saudi Arabia is the biggest export customer. Other manufacturers find themselves with containers blocked in Saudi ports, like Georges Nasraoui, the CEO of Sonaco, which owns the Lebanese delicatessen brand Arabiya. “It’s a small amount – $ 200,000 [177 000 euros] -, but colleagues have 1.5 million goods blocked ”, he said.
The effect could be devastating
Even at the height of the Covid-19 restrictions, the Saudi market remained one of their main outlets. According to the Association of Lebanese Industrialists, $ 1 billion in industrial exports were made to the Gulf in 2020, out of a total of $ 2.3 billion in exports, and Saudi Arabia alone accounted for , $ 217 million. “The ambition was to return to 500 million dollars of industrial exports to Riyadh in 2022-2023”, says Nicolas Chammas, president of the Beirut Traders Association.
Manufacturers were betting on the comparative advantage induced by the collapse of the Lebanese pound against the dollar, and the resulting drop in production costs, to gain market share. From now on, they fear that the United Arab Emirates and Kuwait, which have contented themselves with recalling their ambassadors, will decree the same bans. The effect could be devastating for the Lebanese economy, already in the throes of slump. With the fall in tourism and investment, expatriate remittances and exports are the main sources of dollar supply.
You have 54.41% of this article to read. The rest is for subscribers only.