Thursday, September 20, 2018

No Al Wadi Al Akhdar and Khoury Home are not closing down - BUT....

Artwork by Geoana Hobeiche from her diploma project
Yesterday, like many Lebanese I got the news that two large companies - Al Wadi Al Akhdar and Khoury Home - are closing down. Both companies have denied it categorically which is a relief considering that Khoury Home alone employs about five hundred people.
That's the good news. The bad news - well, news is non-countable so cannot make it into a plural but the media have caught up with the economic spiral we have been engulfed in and now they are laying it out on the open.
People in the financial sector are publicly saying it is the politicians' fault. Economists are exposing the many shady "financial engineering" schemes that authorities have been involved in, which basically, also means the said authorities are implicated in the quagmire.
To be honest, as an ordinary citizen, I took the easy way out several months ago and switched financial formulas from one bank to another. But on the ground - and here I speak as someone who studied economics, as someone who works in communication, and as an average citizen: Heaven help us!
On a main shopping street (not naming it) - four adjacent stores run empty with "for rent" on them. Shops still open on the said street, which is a main shopping hub - are already offering discounts on the new collections. A major mall - again no names - is offering for tennants to stay rent-free because several shops closed down creating huge holes in their departures.
A small restaurant in Achrafieh is paying premium rent near Sassine square, when a major chain is paying half of it in downtown Beirut to rent for triple the size.
You know what CDS is? That's the Credit Default Swap which is the cost of insuring Lebanese govenment against default. For the next 6 months it is at 1224 (figures of September 17th, 2018). That of Turkey is 400 and that of Argentina is 640 just to give you an example. This means that what happens in the next 6 months is very crucial.
So no matter how you look at it, this is scary.
Advertising is scarce because no one wants to invest. So even with a new government (with all the high expectations thrown upon it) I sincerely wonder how on earth it will manage to get anything done.
There has been a lot of talk about devaluing the currency as a result of it no longer being pegged to the Dollar, this of course will yield immediate chaos. But if there is anything we as Lebanese specialize in - well, that's chaos!