Urgent call to our nation's leaders to save Lebanon, the Lebanese people, and the legitimate private sector

The president of the RDCL (Rassemblement des Dirigeants et Chefs d’Entreprises Libanais), Nicolas Boukather, expressed his deep concern over the irreversible consequences of the ongoing war on Lebanon’s legitimate private sector. He revealed the deep anxiety felt by the private sector in the face of this war, highlighting the immense challenges it is facing. He explained that as long as the ports and the airport remain operational, the supply chain can continue, but the danger remains real and imminent. The logistical routes through Syria are impassable due to the sanctions imposed by the Caesar Act. Thus, the private sector considers it urgent and existential that the war ends immediately.

Boukather also mentioned the private sector's fear of a potential Internet outage, whose consequences would be catastrophic for businesses and all economic sectors. He added that despite numerous appeals and meetings organized by the RDCL to allow the use of "Starlink," no positive response has been received.

Regarding the current challenges, Boukather stated that the legitimate private sector faces a major emergency: supporting its employees by providing them with secure housing for their families displaced from the affected areas. He also pointed out that many companies are forced to relocate their warehouses, offices, and other infrastructure from the attacked areas, resulting in considerable exceptional costs, while continuing to support families in need.

As for the losses, Boukather revealed that they have been accumulating steadily since the beginning of the year, estimating them at around $4 billion. The extension of the war would only multiply these losses. He noted that the current situation affects all sectors, not to mention the enormous costs related to human losses and additional destruction. He added that in 2023, the Lebanese economy represented about $20 billion in GDP, which is only 35% of the 2019 level. However, the ongoing war will result in an additional economic contraction of more than 5% this year, threatening many jobs. Boukather also expressed his fear that if the war continues, the annualized contraction (September-September) could reach 25%. He insisted that it is still impossible to fully assess the economic impact of an expansion of the conflict, but key sectors of the national economy are already experiencing declines ranging from 40% to 90%, depending on the sector and regions. For example, tourism is completely paralyzed, with a drop in arrivals estimated at 40% in 2024, potentially reaching 80% within a year if the war continues (even if the airport remains open). Restaurants, for their part, have recorded a decline of 70% to 90%. Similarly, the school year and education are at risk of collapsing or, at the very least, facing major disruptions. The advertising and media sector is severely impacted, with a decline of 70% to 100%. Non-essential retail sales have decreased by 80%, and the delivery sector has suffered a 40% drop due to logistical difficulties and closures. The trade of non-essential goods has also lost the majority of its activity. On the other hand, in some areas hosting displaced people, sectors like real estate and supermarkets are experiencing a temporary increase in demand, to the detriment of affected areas. Security companies are also seeing a rise in demand. More worryingly, attacks on private property highlight the importance of cooperation between the Lebanese army, the internal security forces, and the private sector. Boukather emphasized that these figures and extremely negative factors exert additional economic and existential pressures on businesses, already facing cash flow tensions and unable to access financing in the current financial context. As a result, he fears that this situation may place many companies, especially small and medium-sized ones, in a critical position, directly threatening jobs and even preventing the settlement of companies' obligations.

In the same vein, Boukather explained that the balance of payments could turn negative if the war continues. While it showed a surplus of nearly $1.5 billion until September, it risks turning into a deficit of $4 to $5 billion over the next 12 months if the war continues. This would have a major impact on the Central Bank’s reserves, the value of the Lebanese pound, inflation, and purchasing power, further exacerbating the social stability issues.

This is why Boukather stressed that the RDCL considers it absolutely crucial to take immediate action to stop the war. He also called for the full implementation of international resolutions and treaties, and a clear statement from the government and parliament aimed at separating Lebanon from the ongoing regional conflicts. In this context, he explained that the RDCL is calling for the immediate opening of a parliamentary session, in accordance with the Lebanese Constitution, to elect a president of the Republic capable of reassuring all Lebanese people. The responsibility is heavy and historic for all political forces to unite the Lebanese people at this crucial moment in the history of our nation. He also called for the formation of a reformist government immediately after the election of a president, in line with the aspirations of the Lebanese people, capable of strengthening the confidence of the Lebanese and the international community, in order to protect Lebanon from imminent dangers. He added that any delay in these measures could, unfortunately, lead to irreversible consequences for the country’s stability, security, and future.

In this context, the RDCL is calling on the international community to strengthen its support for the Lebanese army, the only legitimate armed force capable of protecting and reassuring all citizens. It also calls for increased support to Lebanese state institutions to meet the urgent needs of the people across the country, both in terms of security and the economy and society.

In conclusion, Boukather stated that the RDCL urges all concerned parties to act without delay to achieve these vital goals and build a strong state capable of protecting its citizens as well as its legitimate private sector, which is resisting the informal economy, before it is too late.