Lebanon to become trendy tourist, business destination

Lebanon to become trendy tourist, business destination What does one say about Beirut -- a colorful, booming, blossoming city, with traffic like nowhere else, warm hospitality, burgeoning political tensions that keeps the government on a tight wire act; lingering animosities amid incredible cultural diversity, but ultimately, a city and country ready to put a fractured past behind it, if only events allow.
Lebanon and its capital city are very cosmopolitan, with global visitors coming both to tour and to conduct business -- particularly in Beirut, which is the primary hub for banking, building, retail, and digital business.
At question is whether this vibrant, hip, chaotic city and the country it represents is at a tipping point up or down economically for the next several years to come.
Banking is still reporting in as a strong sector but elsewhere in the economy questions are arising about how definitive various contractions are. Given the general upheaval of the region, perhaps very definitive!
A recent International Monetary Fund report stated that final growth figures for 2011 are expected to hit between 1-2 percent, dropping from an 8 percent average during 2007-10, "with real estate, tourism, retail and wholesale trade -- key drivers of recent high growth -- having been hit hard."
After a strong showing of several years, tourism dropped 23.7 percent to 1,666,051 visitors in 2011 versus 2,167,989 tourists in 2010 largely because of concerns about the growing scope of fighting in neighboring Syria. To make matters worse, many would-be travelers, particularly from Europe and the United States are cutting back on traveling as they tighten their personal budgets.
Yet Beirut is betting on the fact that its numerous high-end hotels, top-shelf dining and bars, along with the sun and sand will continue to attract visitors from around the world. Also, the country is home to a number of spectacular historical spots and World Heritage sites.
And there is also a high glitterati quotient to the capital, both from visitors and Beirutis alike. Whether it's a trip to "City Mall" on the weekend, an evening of theater at the Casino du Luban, a performance by Maraca Salsa at the Al Bustan Festival, or an evening at the famous Sky Bar -- the glitter is on display.
Beirut is famous for its many affluent districts, such as Gemmayzeh, Achrafiyeh, the central downtown district, which includes the Solidare (a key reconstruction project after the decimation of the civil war) and Verdun. All of which are high-end shopping and dining areas. I have been residing in the singular Hamra district near to the American University Beirut and Lebanese American University.
Hamra is considered by some to be one of the more colorful and eclectic commercial districts of the city. It is well known for its high-street shops, trendy fashion shows both on Hamra Street and the Rue Bliss by AUB, and also as the location of a large number of hotels, furnished apartments and endless take-a-ways and coffee shops patronized by visitors, residents and students.
However, what becomes obvious almost immediately are high prices for many goods, services, hotels and dinning in Beirut. These prices are in stark contrast to the wage levels of executive, retail and dinning workers.
Even a well-heeled visitor, which this correspondent is not, could quickly go broke, particularly in Beirut, unless they keep a careful eye on spending.
One longtime American expatriate describes Beirut as having "First World aspirations but not quite making it on the wage and other levels."
A fact of life in Beirut are the often power outages, where everything shuts off for a moment and then private generators snap on.
If one is in the right company, the momentary darkness can be considered romantic, but is not the biggest selling point for convention-promoters and other business people.
A $1.2 billion funding bill endorsed by the Cabinet last year for improvements in the electricity sector has yet to be implemented sufficiently to show meaningful infrastructure changes. Also current fiscal limitations are testing the government's ability to make improvements in other key areas, such as water, which is being used at near the limits of its availability.
One Lebanese business analyst said the economy of the nation can be viewed two ways: both as a "dynamic growth market" but also a county that is burdened by a large public debt borrowed largely from domestic banks. After the 1975-90 Lebanese Civil War, Beirut has been on a long-term spending binge to rebuild and modernize. Though a largely successful effort, it has required much more spending than supported by taxes or other government revenues.
The recent IMF report also noted: "Still government debt at 134 percent of (gross domestic product) at end-October 2011 remains among the highest in the world and gives rise to large recurrent financing needs."
Nevertheless, Lebanon, and particularly Beirut, has gained status as a financial center in the region, in part attributable to its strong private banking system, which is open to foreign investment and maintains secrecy laws that have earned the country yet another nickname -- the "Switzerland of the Middle East."
Also, a large amount of remittances -- in percentage terms -- come into the country from Lebanese abroad back to their families. At an estimated 10 million people, the Lebanese Diaspora is more than twice the population of the country, which has just more than 4 million residents.
World Bank figures for 2010 indicated remittances totaled $8.2 billion and account for one fifth of the country's economy.
On the question of social strife -- there is a general reluctance on the part of the Lebanese people to discuss or dwell on the lengthy civil war or more recent troubles, of which there are a long list. The pertaining attitude about the civil war, in particular, is that they would rather forget it and move on. Many express hope for a more unified and profitable future for Beirut as a business hub and tourist destination.
A Bank of Audi report notes: "The local political tensions and widespread regional political disturbances left their imprints on the performance of the trade and service sector in 2011. Tourism activity contracted after vibrant years in 2009 and 2010."
The 23 percent drop in tourism was the most substantial decrease since 2006 after the brief -- but costly -- conflict between Hezbollah with Israel. This closed Beirut's port, airport and the majority of major roads after a heavy Israeli bombing campaign.
But Lebanon and the Lebanese are nothing if not resilient -- somewhat like the boxer who just won't stay down even after an economic roundhouse punch.
Riad Behni, manager of the recently opened Dar Bistro and Books in Hamra is running an establishment with an appeal for culturati and foodies alike -- including locals, students and visitors. One finds both earnest laptoppers and dining couples on any given evening. Off a short alley from Roma Street, Dar is in an impeccably restored old French-style house, with muted charm, good service, and a well-heeled Bohemian clientele.
Behni, like many business people, is taking a confident wait-and-see attitude, noting that in the case of Dar the establishment is in its first seven months of business. It has started to make its name locally and with foreigners, and the upcoming tourist season is just around the corner.
This wait-and-see attitude describes a great deal of the country's economic sentiment.
Also, amid the larger region known as the Middle East, most Lebanese like to note, there is something different about Beirut and Lebanon.
Because of the cultural diversity -- ethnic and religious -- fluency of residents in Arabic, French and English, and because of its hip aura, many Lebanese point out, "this isn't just the Middle East, it's Lebanon!"