Lebanese companies pay high for standoffs with Saudi Arabia

Beirut (AP) — A concise and polite Whatsapp that Lebanese DJs will not sign a deal within days of moving to Riyadh to play for a month at one of the latest entertainment centers in the Saudi Arabian capital. I notified you by a message.

The head of a Beirut-based telecommunications agency was negotiating to revive a two-year-old contract that was derailed by a pandemic for hundreds of thousands of dollars. After two days of silence, her Saudi client called an apology, saying it wasn’t the time.

Business owners who had been exporting stationery to the Kingdom for years had to return 20 containers of notebooks and paper ready to be shipped to a warehouse outside Beirut. .. “Freeze everything,” ZiadBekdache recalled what the handler told him.

These are some of the victims of a fierce backlash against Lebanon in Saudi Arabia in October after the Lebanese minister criticized the war against Iran-backed rebels in Yemen.

Underlying the crisis is a long-standing regional conflict with Iran, and Saudi Arabia is worried about the growing influence of the Iran-backed Hezbollah group in Lebanon. Lebanon is captured in the middle.

In response to the Minister’s comment, Saudi Arabia recalled its ambassador and banned the import of Lebanon, from chocolate to chemicals. This has resulted in about $ 240 million annually.

The diplomatic crisis is causing anxiety among Lebanese, especially those working in the Gulf countries, when Lebanon has already endured an unprecedented economic collapse.

“I felt sick not only for myself, but for my country and foreigners,” said DJ Chloe. “We all have families abroad.”

Remittances from more than 350,000 Lebanese working and living in the Gulf were essential, especially as the meltdown boosted inflation and unemployment in former middle-income countries. According to the World Bank, remittances in excess of $ 6.2 billion, primarily from Gulf countries, will account for 18.9% of Lebanon’s GDP in 2020, making it one of the highest remittances in the world.

Exports to Saudi Arabia have declined in the last few years, but Saudi Arabia has been the largest importer of Lebanese products such as soaps, printed books and canned goods.

Lebanese government officials sought to ease the crisis, saying that the comments made by intelligence minister George Kordahi before taking office did not represent their views.

Meanwhile, Kuwait, Bahrain and the United Arab Emirates have also recalled their ambassadors to lead Lebanese diplomats, like Saudi Arabia, to lead one of the coldest diplomatic relations between these Gulf states and Lebanon. I asked for it.

The relationship was sour for a while.

In 2013, hundreds of Lebanese Shiites working in the Gulf were banished on suspicion of supporting Hezbollah. The deportation came after the group joined the Syrian civil war on the side of President Bashar Assad, also backed by Iran.

Since then, the Gulf countries have imposed sanctions on Hezbollah and named Hezbollah a terrorist group.

In 2017, Riyadh quoted Hezbollah’s rule in a television statement and forced Lebanon’s then Prime Minister Saad Hariri to announce his resignation during his visit to the Kingdom. The dramatic move backfired: Hariri returned home, regained his alliance with Hezbollah, and lost Saudi support.

Saudi Arabia estimates that due to the financial crisis in Lebanon in 2019, Saudi Arabia was absent after spending more than $ 6 billion on investment and government support in Lebanon between 2004 and 2015.

The impasse in government formation was prolonged because Riyadh refused to support Hariri again, either because no one supported it.

Earlier this year, Saudi Arabia increased pressure and expanded its net. It prevented Lebanese produce from reaching or passing through the kingdom after accusing Hezbollah of using cargo to smuggle drugs. It was a blow to farmers who depended primarily on the Gulf to sell their goods.

Saudi Arabian companies have shown that boycotts have become even more widespread.

Ajlanal-Ajlan, chairman of the Saudi Chamber of Commerce, said all business relationships, including Saudi Arabian investors working in Lebanon, would be suspended.

“This is the minimum amount that Saudi businessmen and businesses can offer to support the government,” he said, according to the Saudi-owned Asharqal-Awsat newspaper.

Some argued that Saudi measures corresponded to collective punishment that effectively empowered Iran and its allies.

Ziad Nasreddin, an economist who agrees with Hezbollah’s view, said Gulf companies withdrawing from Lebanon would open the door to alternative investors.

“Going east is one of those options,” he said, referring to China, Russia, Iran and Iraq.

However, some people who have a business relationship with Saudi Arabia are paying a high price.

DJ Chloe said the Riyadh-based Lebanese company, which had negotiated with her and other Lebanese artists to perform at one of the glamorous entertainment centers in the Saudi capital, lost its entire contract.

She said the message from Riyadh- “Please kindly accept my apology” -indicated that the priority of hiring Lebanese people has changed.

Nayla el-Khoury’s Beirut-based telecommunications agency has been working with Saudi companies for over a decade, hoping to revive an entertainment project with a delayed pandemic when Saudi clients freeze. ..

“This was supposed to put food on the table of 40 people,” she said, tweeting angry to the Lebanese Minister of Information.

El-Khoury accused Lebanese politicians of dragging the people into a battle that was not theirs. “I have been punished for the involvement of the parties in a war I have no opinion on,” she said.

Saudi measures threaten to dismantle the wreckage of Lebanon’s manufacturing base. The banking crisis has already forced many companies to downsize and run out of fuel, making Lebanon one of the most expensive countries to produce electricity.

Georges Nasraoui, head of the Lebanese Industrialist Association, said at least 15 factories from 900 members of the group have moved to neighboring countries in recent months. More people are considering moving, putting more work at risk.

Imports from Saudi Arabia were also affected.

Fadi Abboud, owner and former minister of Lebanon’s general packaging industry, said repeated orders for polypropylene from one of Saudi Arabia’s largest petrochemical plants were delayed. After that, new orders were suspended.

“What do they want us to do now? Are you going to buy petrochemicals from Iran?” Aboud said, adding that he may be forced to relocate.

Bekdache, owner of a family-owned Oriental Paper Products with a history of nearly 70 years, plans to increase exports to Saudi Arabia to benefit from the collapse of the Lebanese currency, which has made notebooks more competitive. I did. He is currently considering moving his business away from Lebanon.

He said it was sad that “we get this boycott” after years of mutual cooperation and investment.

“It’s as if they are boycotting their brothers.”


Associated Press writer Aya Batrawy contributed from Dubai, United Arab Emirates.