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First the pandemic, then the blast: A constant uphill battle for Lebanese enterprises

News | 13 August 2021 | Alf Tore Bergsli
For ett år siden ødela massive eksplosjoner mesteparten av Beiruts havneområder og nærliggende nabolag. Tre Fafo-forskere er medforfattere til en rapport om hvordan hendelsen påvirket lokalt næringsliv. Konkurser og oppsigelser av arbeidstakere har bidratt til å forsterke de allerede mørke utsiktene formet av landets dype politiske og økonomiske krise og negative effekter av covid-19-pandemien.
One year ago, massive explosions destroyed most of the Port of Beirut and flattened surrounding neighbourhoods. Fafo has co-authored a report on how the disaster has affected nearby enterprises. The resulting closures and lay-offs further worsened the pessimistic outlook caused by Lebanon’s deep political and economic crisis and the negative impact of the COVID-19 pandemic.

On 4 August 2020, massive explosions at the Port of Beirut — a key artery for the national economy — destroyed most of the facility and severely harmed surrounding neighbourhoods, killing more than 200 people, wounding more than 6,500, and displacing around 300,000.

As part of an ongoing series on the effects of the COVID-19 pandemic on enterprises in Arab countries, Fafo, the International Labour Organization (ILO) and the United Nations Development Programme (UNDP) have conducted a special report that examines the impact of the Beirut port explosion on local enterprises.

Based on a study of 1,664 enterprises operating within a five-kilometre radius of the explosion site, the researchers find that:

  • Most of the surveyed enterprises were damaged by the port explosion (86 per cent), and one-third were severely or completely damaged.
  • Despite the severe structural damages, 40 per cent of the enterprises currently operates as they did before the explosion. The same proportion of enterprises operate with reduced opening hours or reduced workforce. Along with the damages from the explosion, reduced operations are closely associated with the COVID-19 pandemic.
  • 14 per cent of the enterprises have shut down either temporarily or permanently.
  • Only 3 per cent of the enterprises run with a profit after the explosion.
  • Since the explosion, one-third of the enterprises with payroll employees have laid off one or more persons.
  • Enterprises affected by the Beirut port explosion are more worried about threats from Lebanon’s structural, economic and political crises than the direct consequences of the explosion.
“A lesson for policymakers and aid programme developers is that policies and support measures must address both the immediate and medium-to-long-term needs of the enterprises to enhance their capacity to overcome future shocks. Addressing the structural economic challenges is essential to ensure business sustainability and promote development and growth,” the report concludes.

Fafo’s researchers: Tewodros Aragie Kebede, Svein Erik Stave and Åge A. Tiltnes.
Publisert: 13 August 2021