Timour Azhari

BEIRUT, Reuters – The machinery at Oriental Paper Products (a stationary factory located outside of Beirut) is idle, and work shifts have been cut. The company was already in financial trouble due to Lebanon’s financial crisis. A full-blown diplomatic dispute with Saudi Arabia made things worse.

Riyadh imposed a ban on certain goods coming from Lebanon last week, as a response to criticisms made by a Lebanese Minister about Saudi Arabia’s role in Yemen’s civil war.

These comments only exacerbated the deteriorating relations among the former allies. Riyadh became increasingly critical about what it calls arch-enemy Iran’s increasing influence over Lebanon via the Hezbollah, a powerful and armed movement that Tehran supports.

The impact of the new law is already felt at Oriental Paper Products as well as businesses throughout Lebanon.

When the ban was imposed, it had produced $500,000 of office supplies and books destined for Saudi Arabia.

We already have our problems, and they (Lebanese politicians), are adding to them. God bless the Lebanese,” Ziad Begdache, chief executive officer, said to Reuters.

This row occurs at an especially bad time in the Lebanese economic system.

Bekdache is also deputy head of Association of Lebanese Industrialists. He stated that industries sought to take advantage of increased competiveness caused by the collapse of the currency to increase Saudi Arabia’s exports from $240 million to $600 millions in 2020.

“Now it’s zero,” said he, noting that many Lebanese businesses had relocated their factories to Oman and Turkey to escape the Saudi ban.

The exports of Lebanese non-food products to Saudi Arabia are : gold, jewellery and machinery.

Bekdache stated, “It seems as if someone is planning to destroy the industrial and economic sectors of Lebanon. In addition to cutting the ties between Lebanon and other parts of the world, especially with the Gulf and Saudi Arabia.”

A request by the Saudi Embassy for comments on the effects of their ban on exports from Lebanon was not answered immediately by the economy and industry ministers of Lebanon. The Center for Internatonal Communication of the Saudi government media outlet did not reply immediately.

“WHY DO WE PAY THE PRICE?”

Lebanese companies have suffered from one of the most severe economic crises in Lebanon’s recent history. The COVID-19 pandemic, a major explosion at Beirut’s port and the destruction of parts the capital compounded this problem.

Lebanese pounds, tied to the U.S. dollars for nearly two decades has seen a more than 90% decline since 2019. This has slashed the local buying power while global economic downturn drastically decreased exports.

After a rise in drug smuggling, Saudi Arabia stopped imports from Lebanese food and agricultural products in April.

Lebanon claims it has made significant progress in addressing the issue since, with several drug busts.

Saudi Arabia and four Gulf states recalled their diplomats to Lebanon last week. Saudi Foreign Minister said that Saudi Arabia didn’t see any point in engaging again as long Lebanon was being dominated and ruled by Hezbollah.

Hezbollah has publicly supported Information Minister George Kordahi. His comments have triggered the latest row. He is now under pressure by some politicians to resign.

This week, Lebanon’s Foreign Minister Abdallah Bou Habib called the Saudi demands impossible https://www.reuters.com/world/middle-east/lebanon-says-it-wants-dialogue-with-riyadh-not-demands-about-hezbollah-2021-11-02 to meet, and urged Riyadh to resume talks with the government to resolve differences.

Leaders of Lebanese businesses have expressed growing dissatisfaction.

“Did we create Hezbollah? Is there an arsenal of rockets in our possession? We have to pay for it. According to the Lebanese head of an export company that has made more than $1,000,000 to Saudi Arabia, he spoke under anonymity to protect the delicate nature of the subject.

Many firms tried to help Saudi Arabian companies when this crisis began.

Joe Rizk (Lebanese businessman), was the supply chain manager for Second House Products, which makes spice blends as well as a range of dry foods. He met the Saudi consul in Beirut just one day before Kordahi made his comments.

Rizk spoke from an industrial area outside Beirut, saying that they tried to find a solution but it got more complicated.

Rizk explained that before the ban 20% of his products were sold in Saudi Arabia to 700 restaurants. The company is unable find alternatives buyers for the Islamic holy month Ramadan. This peak season, Rizk noted, was the time when the majority of Rizk’s products are consumed.

He says now that he has considered moving his production to another country, but is worried about lay-offs.

We end up paying for the very large issues. Rizk spoke out about Lebanese and Saudi citizens. It is a loss not only for us but also for the other people involved.