Businesses Struggle to Cope As Protests Close Heart of Beirut

Dec. 07, 2006- Sales at the Virgin Megastore in downtown Beirut had just begun bouncing back from the summer war when a sit-in connected to Lebanon's tense political standoff paralyzed the area, forcing the store closed again.

This vibrant city, mostly rebuilt after its long civil war, has been struggling since the Hezbollah-Israeli war with a series of political crises that have brought both fears of civil war and economic devastation.

The latest blow has been fierce: a weeklong sit-in by Hezbollah and other opposition protesters in two downtown squares has brought the heart of Beirut to a standstill, transforming it into a tent city of protesters camped out and combat troops in armored vehicles behind barricades of barbed wire.

Hundreds of businesses have lost revenue and many have closed. Hotels hoping for strong tourism during the holiday season -- Christmas and the Islamic al-Adha -- have seen most of their bookings canceled, with visitors fearing the country's turmoil.

No end is in sight; the opposition threatens another massive protest Sunday.

The Western-backed government has tried to ignore the protests -- designed to unseat it -- and Prime Minister Fuad Saniora has gone about his schedule from his fortified offices nearby.

But Finance Minister Jihad Azour has said every day of the sit-in costs the economy $70 million in losses.

Overall, the economy has been gloomy since the summer war. The latest cycle of unrest began Nov. 21 with the assassination of anti-Syrian politician Pierre Gemayel, followed by a national strike, his funeral and the opposition sit-in that began Dec. 1.

Road closures have caused huge traffic jams and troop searches of pedestrians downtown have kept many away. Scattered violence between Sunni Muslims backing the government and Shiites led by Hezbollah has fueled the uncertainty.

For this city that prides itself as the Paris of the Middle East, the impact has been severe on the posh designer boutiques, restaurants and nightclubs that cluster downtown.

"Downtown is like a ghost town. And the sad thing is that every time we think it's over, some new disaster strikes," said George Helou, training director at a trendy food outlet that now is closed.

Sidewalk cafes -- a favorite of Gulf Arab tourists in years past -- now sit empty and closed. Restaurants and department stores also have closed, and hundreds of white canvas tents have been pitched in streets and parking lots around the two squares.

Outside the fashionable Buddha Bar, a Hezbollah tent was pitched steps away from portable latrines and water tanks in the middle of an intersection in front of the prime minister's building.

On Thursday, Charles Samaha worked to move women's clothes and shoes from his store to a suburban branch. "It looks like it's going to last long," he said, estimating his losses were at least $100,000. Even at the other branch, he conceded, sales are "very light" because of the uncertainty.

Banks and multinational companies with downtown headquarters have relocated staff and offices. Others now work shorter hours, evacuating their buildings before the afternoon, when the Hezbollah protests often become boisterous.

Virgin's Murr has laid off 20 percent of his employees in the past few months and says he is thinking seriously of closing the downtown Beirut branch if instability persists. The store has several smaller branches elsewhere in the city and its suburbs.

"We are losing a minimum of $50,000 with each day of closure," he said.

Overall, about 15,000 people in the tourism industry could be laid off early next year because of hotel booking cancellations, said Pierre Ashkar, an industry official.

Tourism -- which brings in about 12 percent of Lebanon's gross national product -- is crucial for a country with no significant natural resources. But the sector was devastated by the Israel-Hezbollah war.

Before the war, the Tourism Ministry was predicting a record 1.6 million visitors in 2006, with revenues topping $2 billion. But in August, the number of visitors -- 26,000 -- was down 85 percent from the same month in 2005, and September's 67,000 visitors was 43 percent less than the year before. More recent figures were not available, and officials have not estimated dollar losses in tourism.

Despite everything, signs of resilience remain: The annual Beirut Marathon, titled "For the Love of Lebanon," went ahead Sunday after a week's postponement. But the 20,000 runners had to take different routes to skirt the protests.

By Zeina Karam, Associated Press Writer