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Rafik Hariri's murder hits the booming economy of Lebanon
(DPA)

18 March 2005
BEIRUT — The bomb that killed former Lebanese prime minister Rafik Hariri has also hit Beirut’s booming economy.

Hariri, a billionaire who was killed by unknown assailants in central Beirut a month ago, was a symbol of the reconstruction of the state and its capital after the long civil war that ended in 1990.

“While the death of another prominent figure would have been a crisis, this attack was a political earthquake,” says Yassin Jaber, minister of transport and public services in the government that resigned in response to popular protest after the murder.

Foreign investors and businessmen are reacting cautiously to the new uncertainty.

For example, the Dutch multinational Heineken has put plans to build its own brewery in Lebanon on ice.

Because beer consumption fell by almost a third in February, production at the Almaza brewery, in which Heineken has a majority share, has been cut back.

“There is a feeling of unease, of uncertainty,” says Ronald Voorn, the Dutch brewer’s representative in Lebanon.

“Lebanon was seen as a country opening up to the world and focusing on its future,” Voorn says, adding that this could now change. Heineken is awaiting development before deciding on its next move.

Many tourists and the business people accustomed to meeting in Beirut for conferences are taking a similar wait-and-see attitude.

The first reaction was one of shock and led to the cancellation of more than half the bookings at hotels and with transport companies, according to Lebanese reports.

The manager of one international hotel chain has said that hotels in Beirut have gone from 70 per cent occupancy to just 20 per cent.

And local visitors to the ski resorts in the mountains around Beirut report that clients from the Gulf states are staying away.

The luxury hotels that have risen again in Beirut are part of the economic boom that Hariri played a major role in leading after the war.

Forei capital, coupled with cheap labour poured into the country, many workers coming in from Syria, but also from Sri Lanka and the Philippines. The evident consumption of Western goods, the ubiquity of expensive cars and four-wheel-drive vehicles on the streets of Beirut stand in sharp contrast, however, to the much more basic living conditions in the interior.

Beirut is a metropolis of business and entertainment that differs strongly from much of the rest of the country.

The earthquake of Hariri’s death has also hit the Lebanese pound. In an attempt to prevent investor flight to the security of the dollar, the banks have at short notice doubled interest rates on investments in the domestic currency to 15 per cent. Should this crisis continue, the wider economy will begin to suffer. Thus far there are no clear indications that foreigners are taking money out of the country in large amounts.
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