Emptiness is what characterizes a large number of retail shops along the downtown streets of Lebanon’s capital Beirut on Monday, the first day that the retail shops in the country are supposed to resume their full operations in a deteriorating financial environment.
Dory Slim, owner of Petals and Pearls, a well-known clothing shop in Beirut, has decided to shut her business down after 15 years of work in the industry.
She said her business bore the brunt of nationwide protests that broke out last year when people started having difficulties in withdrawing their money at banks, before the COVID-19 outbreak early this year exacerbated the situation.
“I have to pay a big amount for rent and I do not have fresh money to import products,” Slim told Xinhua.
Lebanon has witnessed in the past few months a shortage in the U.S. dollar because of an economic slowdown and the drop in cash injections from the Lebanese abroad.
Hence, banks decided to restrict withdrawals of depositors and their money transfers abroad, creating a huge crisis for local businesses who largely rely on import.
The dollar shortage has also created a parallel market, in which a greenback is exchanged for 4,000 Lebanese pounds and more, as opposed to the official price of about 1,514 pounds.
“If I secure dollars at the current market rate of over 4,000 pounds, I will have to increase my prices and no one will be able to afford my items,” Slim explained.
Nicolas Chammas, head of Beirut Traders’ Association, warned that many of the shops operating in malls will also not reopen.
“Many brands operating in Lebanon have numerous branches. Some must shut a few ones … while others have shut down all their branches,” he said.
In addition, the sharp loss in the value of the Lebanese pound against the U.S. dollar has caused a dive in the purchasing power of the Lebanese, Chammas noted.
After defaulting on its debt earlier this year, Lebanon has been negotiating with the International Monetary Fund the possibility of acquiring funds to save the country from further deterioration