Economic collapse in Lebanon is affecting employees and companies

UNITED STATES (OBSERVATORY NEWS) — Weeks ago, Leticia told her employer that she had lost her job in the midst of a severe economic crisis in Lebanon that has been a major cause of a massive protest movement in the country for more than 40 days.

Since October 17, interior designer Leticia, 28, has been participating in protests against political power and demanding her leave because she has been unable to find solutions to the crises that plague Lebanon at all levels. Two weeks after the revolution, she found herself unemployed.

“Projects have been reduced for a year,” she told AFP. “Before the revolution, we had been told that we would get half of our salaries for part-time work in the last two months of the year.”

After the outbreak of demonstrations that paralyzed the country, the engineering company closed its doors for two weeks like most sectors. Afterwards, Leticia received a call to go to the office where she paid her last salary and “told me I was fired.”

She notes that what happened was not the result of “revolution, but it may have accelerated the course of things.”

Like Letessa, thousands of Lebanese find themselves at risk of losing their jobs, some of whom have already lost their jobs without warning, while employees in several sectors have been instructed to come to their part-time duty stations for half a salary.

Among them is Mary, 46, an employee who uses a pseudonym for fear of losing her job at a high-end women’s clothing store in Beirut where she has worked for 16 years.

“Since the beginning of the month, we started taking two more days off each week. The employer told us they would have to pay half of our salary, and we would be compensated later if the situation improves,” she told AFP.

Mary and about 20 of her colleagues did not object to the decision “because we fear the worst and no one will risk losing his job in such bad conditions.”

“We know the situation is bad for months. Fifty thousand liras have not entered our fund for days.”

– Poverty and unemployment –

The current crisis is the result of years of sluggish growth, with the state unable to undertake infrastructure reforms, reducing deficits, and declining foreign investment, as well as the repercussions of the political divide that has been exacerbated by the conflict in neighboring Syria since 2011 on an economy that relies mainly on services and tourism.

Public debt rose to $ 86 billion, equivalent to 150 percent of GDP. Lebanon was awaiting $ 11.6 billion in grants and loans approved by the Cedar Conference in Paris in 2018 in exchange for structural reforms and reducing the budget deficit, but the division over the implementation of these projects and the dispute over quotas and appointments prevented the government from fulfilling its obligations.

“We are not heading into a crisis. We are in the midst of an economic downturn,” says Maha Yahya, director of the Carnegie Middle East Center.

The World Bank forecast a slower-than-expected recession this year with negative growth of about 0.2 percent. He warned that the poverty rate (one third of the Lebanese) could rise to 50 percent, and the unemployment rate (more than 30 percent) among young people is likely to rise sharply.

Vital sectors began warning of catastrophic scenarios.

“Thousands of businesses are threatened with closure and tens of thousands of employees and workers are at risk of losing their jobs,” according to economic bodies, a grouping of private sector and banking institutions.

The Association of Restaurants and Amusements Owners Association counted the closure of 265 establishments within two months, with the number expected to reach 465 at the end of the year.

The country is experiencing a liquidity crisis that began in the beginning of the year, with banks setting a ceiling for conversion to the dollar, which gradually reduced it, causing the exchange rate of the lira, which was fixed at 1507 lira against the dollar years ago, to rise to more than two thousand in the parallel market.

The Association of Banks recently set the limit for weekly withdrawals for depositors at $ 1,000.

Several sectors have warned that they will not be able to import basic materials from abroad because of the scarcity of the dollar. The Minister of Public Health Jamil Jbak on Tuesday called on the Central Bank of Lebanon to intervene to provide the necessary amounts in dollars to facilitate the import of medical equipment.

The Lebanese noted the discontinuation of a number of medicines and a significant rise in food prices, in return for the decline in purchasing power.

– “The only option” –

“Today we are no longer able to import the goods … or collect our money from the market,” says Bilal Dandashli, general manager of two small-scale companies, one of which works in the road paints and safety measures and is dependent on imports.

From his small office in Beirut, he talks about the difficulties of customers who are unable to pay as well. “It’s like we are begging our money…. I want someone with $ 20,000. Today, bring me a $ 1,000 check. How will we continue?”

Bilal fears for his future and his ten employees.

“They have not been working for about two months,” he says. “I can hold on for a few months yet, or I will go to shut down the company and give them their rights.

He warned the General Labor Union on Wednesday of “arbitrary dismissal” in a wide range of sectors, saying that “can not accept arguments under an emergency circumstances not exceeding a month and a half to carry out this campaign.”

“I received a job offer from Kuwait and I am studying it now,” says Leticia, who spends her time sending her resume to foreign companies.

“If traveling is the only option, I will have to take it,” she said, tearing her eyes. “I will start again but not here, because there is no hope.”

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