Lebanon, a tiny country nestled at the crossroad of the Mediterranean basin, has certainly seen better days. What once was a renowned hub for day and night tourism, hospitality, and the food and beverage (F&B) industry is now spiraling into a full-scale recession, fighting for a glimpse of daylight.
The number of F&B companies that have shut down in Lebanon since Sept. 1, 2019 has reached a staggering 785, according to Tony Ramy, president of the Syndicate of Owners of Restaurants, Cafés, Night-clubs and Pastries in Lebanon. Around 240 companies ceased activity during the month of January alone.
And while the majority of F&B employees are working part-time or on a half-salary basis, over 25,000 of them have been let go from their jobs due to the reported 75-percent decrease in sales.
A recent study by InfoPro, a Lebanese market research and polling firm, estimates a total 220,000 people have lost their jobs since October 2019. The month marked a historic nationwide uprising to protest corruption and topple leaders who've been ruling for decades. The revolution's ignition seemed like the last straw for business owners who have been financially struggling for some time in a fragile economy.
The study, executed with a representative sample of 300 companies weighted according to region, size, and sector, notes the Oct. 17 revolution as a turning point. This is when "most companies had already depleted their reserves, and many had lost their ability to resist the crisis, contrary to the situation in previous security or economic emergencies during the past 25 years."
The Lebanese pound, pegged to the U.S. dollar at 1,507.5 LBP since 1997, hit 2,400 LBP in the black market in February 2020, with banks imposing capital control and prohibiting their customers from withdrawing large amounts of dollar banknotes.
The exponential increase in prices coupled with the decrease in people's purchasing power has made an already dire situation even tougher.
While thousands of restaurants are still fighting for the pot of gold at the end of the rainbow, hundreds have called it quits
"We pay rent in US dollar, and there is no US dollar," Chafic Koleilat told StepFeed. Koleilat is the co-owner of Work Lounge, a resto-cafe/print house in the busy street of Hamra. Opening its doors just shy of a year ago, the coffee shop will soon be saying goodbye to its customers, most of whom are students who've spent months studying away the night cozied in one of its corners.
"We no longer have any customers because people don't have money anymore," the café owner explained, unraveling the situation that has forced them to shut Work Lounge's doors. "Banks are imposing a lot of hurdles on us and we have no idea how long this crisis will last." Koleilat also made note of the absence of any governmental interference, marking its negligence in deducting taxes or sending out a helping hand in paying electrical bills.
Besides a couple of different Gandour products, the Lebanese manufacturing industry practically doesn't exist. With the vast majority of raw materials imported from abroad, restaurant owners continue to charge customers the same old prices, while solely carrying the burden of the current dollar exchange rate they pay their suppliers with.
Finders speaks the story of numerous expats with a life-long dream of residing in Lebanon
Finders, an e-commerce website allowing the Lebanese to shop online from stores like Amazon and Macy's, was founded by four expats with nothing more than the hope for a better future in a country they call home.
"After two incredible years, we are left with no other choice but heart-breaking decision to shut our doors," reads the official goodbye statement. "We are sad to go but the economic crisis has left the Lebanese people with dwindling purchasing power and investors without the ability nor the interest to invest. Someday, we hope to be back as part of a new and prosperous Lebanon."
It may be a distressing ship to board, but Finders certainly isn't the only passenger setting sail. Long loved businesses like Beirut Cat Café and The Gathering restaurant have also bid farewell with their own goodbye statements.
"As that main gate closes, I will forever cherish your smiles and laughter," reads the last post by The Gathering on Instagram. "Till we get together again at our next Gathering."
What now for white and pink collar workers and business owners with bills to pay?
Numbers don't lie, and the numbers in Lebanon foreshadow a not-so-promising future. Back in November 2019, the World Bank gave notice of a poverty rate that could reach half the population if the economic situation worsens. Youth unemployment, which is already high, could see an even steeper rise.
"International experience suggests that in economic crises, both the poor and middle class can be hurt disproportionately, and the new government should intervene swiftly to protect these people against negative effects of adjustments," warned the World Bank.
The red alarm was sounded almost four months ago, but it seems to have fallen on deaf ears. Confidence in the economy has yet to be restored, and the emerging economic crisis looms with the passing day.
"No trust," shouted protestors marching in Riad al-Solh as the newly formed government's vote of confidence took place 100 days into the revolution. Are the people ready for prime minister Hassan Diab's very own "let them eat cake"?
