Repercussions of Hariri's resignation: No black Monday

Negative economic effects still not apparent in the wake of Hariri's resignation.

6 November 2017 | 20:00

Source: Annahar

  • By Zeina Nasser
  • Source: Annahar
  • Last update: 6 November 2017 | 20:00

Customers drinking shots at a pub in Beirut. (AFP Photo/ Joseph Barrak)

BEIRUT: A variety of economic sectors have yet to show any marked declines in the now two days  following Prime Minister Saad Hariri’s sudden resignation on Saturday.  

But a few negative ripple effects may have begun, though not profound as of yet.

Passing through Hamra Street on Saturday night, a place usually full of party-goers and traffic, one could feel the difference. The streets were nearly empty and most of the pubs were complaining of a decrease in sales.


RESTAURANTS: NOT THE SAME SATURDAY

A slight change was reported by local restaurants, Annahar was informed.

Babel restaurant, which has several branches in and outside Beirut, mentioned that business was on par with last week, adding that reservations remained the same. Whereas Falamanki restaurant reported a 10 percent decrease on Saturday, but no other business problems.

The Monot-based Abdel Wahab, however, mentioned that there was a small drop in overall sales Saturday, though reservations were not affected. The restaurant’s customers are mainly from the Gulf and Lebanon, which management said might explain the small decline in business.

Enab eatery, in Jemmayzeh told Annahar that “Sunday was different,” adding that “the restaurant usually serves 350 people for Sunday lunch, while it only served 125 customers for its afternoon seating. “It’s a phase that will pass, that’s why we have no concerns,” they added.

Mezyan resto-pub in Hamra said that “there was only a slight change, and no one cancelled any reservations.” Adding, however, that “Hamra street did not have the same energy and vibes this weekend, as usual.”

Tony Ramy, President of the Syndicate of Owners of Restaurants said, “We’re waiting to see how the situation will develop this week,” adding that he can’t talk about any effects based on the past two days only.


HOTELS ALREADY IN LOW SEASON 

Hotels were slightly affected by Hariri’s resignation. Management at the Lancaster Tamar, Hazmieh, said that there was no change in reservations.  

Pheonicia, one of the most prestigious hotels in Beirut, told Annahar that there were a few cancellations, but “they can’t give a final assessment,” this early in the situation.

Wadih Kanaan, General Secretary of the Syndicate of Hotels Owners in Lebanon, explained that “hotels are currently in the low season,” adding “according to the data on our hands, Hariri’s resignation did not have any impact in this regard.”

Reports from the industry are not definitive as of yet, he noted.

Kanaan expected the picture to be “clearer in the upcoming days,” adding “that the Lebanese adapt quickly to any situation.” He also mentioned that meetings that are being held between officials in order to make hotel owners feel more comfortable.

Kanaan pointed out that Lebanese expatriates are expected to spend their December holidays in Lebanon, despite Lebanon’s critical condition. “They will not be affected by what is happened, and will visit the country as usual.”

The turnout of the Gulf citizens has been affected by the travel ban that was still in force, Kanaan mentioned, adding: “we are working on lifting the ban.”


TRAVEL AGENCIES: NO CHANGES

The Tania travel agency mentioned that “it's still too early to predict anything,” adding that “It’s already a low season, and we are usually affected in this time of year, with or without Hariri’s resignation.”

The agency added “Usually, during the low season, people who reserve fights are corporate, since people come to have workshops or other seminars in Beirut.”

Barakat Travel, said much the same thing: “Nothing changed, and it’s already low season.”

Jean Abboud, Head of the Syndicate of Travel Agencies, said that “the economic cycle in the low season is mainly focused on buying tickets, but the largest number of people visiting Lebanon is in December.

“There was no decrease in reservations in the past two days, and it was already weekend,” adding “travel agencies informed me that they are working normally.” Abboud hopes that “there would be no political tensions, and that everything will be on the right track in the economic sector.”


ECONOMIC EXPERTS: NO BLACK MONDAY

While a large number of banking deposits are made by Lebanese expatriates, almost $8 billion a year, according to the World Bank – with earlier forecast suggesting an uptrend -- a financial analyst told Annahar that a loss of confidence in the Lebanese economy could leave Lebanese expatriates less interested in placing their money in their home country.

Preliminary banking reports suggest that a large number of depositors are changing their accounts from liras to dollars, based on concerns over a drop on the value of Lira.

Economic expert Maurice Matta told Annahar that “Central Bank Governor Riad Salameh’s assurance on Sunday that the central bank's policies would ensure Lebanon's monetary stability despite the political crisis that ensued from the resignation of Prime Minister Saad Hariri and the collapse of his Cabinet, eased the situation and lowered the risks.”

"Lebanon is going through a political and governmental crisis that brings up inquiries about the future of the Lebanese pound," Salameh said in a statement, noting that the Lebanese pound exchange rate against the U.S. dollar would remain stable.

"This stability serves the best interests of Lebanon and garners unanimous support from all Lebanese," Salameh added, while attributing monetary stability to the Central bank's recent financial swap operations that aimed at bolstering BDL's foreign currency reserves and its cooperation with commercial banks.

Matta mentioned that “the money transfers are happening inside Lebanon, and this is a good thing for the Lebanese banking sector,” describing the political concerns that the economic sector is passing through as “a cautious phase, but not a risky one.”

Matta stressed that “Hariri’s resignation on Saturday spared the Lebanese more losses, since banks were closed on that day.” Usually, economic losses happen in the next hours of any shock or crisis. “The banking sector had two days to discount the resignation’s economic losses,” he said.

Hariri’s photos with Saudi Arabia’s King Salman bin Abdulaziz Al Saud in Riyadh, which spread this morning all over news agencies and social media, also made more people feel comfortable over the economic situation, according to Matta.


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