Lebanon: Unlicensed Syrian Businesses Target of Ministry Plan

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Beirut and Mount Lebanon governorates host around 28.8 percent of informal Syrian businesses, concentrated in Bourj Hammoud, Nabaa, Tarik al-Jadida, and Mazraa. However, these establishments have a different image than those in the Bekaa. (Photo: Reuters - Ali Hashisho)

By: Soha Shamas

Published Thursday, November 7, 2013

Dimashq al-Yasmin, Ya Mal al-Sham, Bab al-Sham. These are the names of some shops owned by Syrian refugees in Lebanon: restaurants, grocers, roasters, tailors, and car mechanics. Most of the establishments relocated from Syria, though some were established by Syrians in Lebanon. However, few operate legally. They form an informal market made up of thousands of "irregular" establishments around the country.

A field survey conducted by the Lebanese Economy and Trade Ministry found that, in the past two years, Syrians established around 1,196 unlicensed businesses in the country. After the shutdown of 377 in Bekaa, the remaining number is 819 operating informally in various trade and tourism fields.

Such data has provoked various reactions, some of which could be attributed to the "usual" xenophobia against Syrians and others to concerns about serious competition with Lebanese-owned businesses.

By not fulfilling legal obligations, some observers believe that these Syrian establishments will fuel an expansion of the informal market, especially since the number of actual informal businesses is believed to be much higher than documented.

Should these businesses be shut down? Even without taking into consideration the extraordinary circumstances of displacement?

Lebanese traders are divided on the issue. Some welcome Syrian establishments and consider them useful. Others are angry.

Economy and Trade Minister Fuad Fleifel tells Al-Akhbar, "The Lebanese economic system allows any foreign investor to move freely, and no one can stop them from conducting commercial activities, except in the areas set by the Labor Ministry and on the condition that investors abide by laws and regulations."

Foreigners in Lebanon (including Syrians) are banned from several types of jobs: money exchange, import and export, accounting, brokerage, engineering, printing, tailoring, barbers, laundry, and car mechanics. Based on current regulations, foreign workers are required to get residency permits from General Security and a work permit from the Labor Ministry, in addition to registering the company in the commercial register and obtaining licenses from the municipality and governorate.

The conditions seem very complex and do not accommodate the temporary situation of most Syrian establishments. However, Fleifel devised a plan to shut them down with the help of security forces. The plan will be implemented in several phases. Over the past few days, the ministry has warned Syrian-owned establishments in Beirut. Next they will head to Mount Lebanon, the north, and the south.

"The cries of Lebanese industrialists and merchants were loud," declares Fleifel, defending the plan. He wants the municipalities to "inform concerned authorities about such violations."

According to the Economy and Trade Ministry's survey, 54 percent of the informal Syrian businesses are located in the Bekaa, mainly in locales such as Zahle, al-Marj, Bar Elias, Taalabaya, and Majdal Anjar.

"The competition is harsh and illegal," explains head of the Zahle Chamber of Commerce Elie Chalhoub. "Syrian shop owners are smuggling raw materials and goods at a very cheap price from Syria, in addition to employing cheap Syrian labor. Most of them do not pay taxes or electricity and municipal bills."

Chalhoub even asserts, "The shop closures in Bekaa were merely a farce, since most of the shops reopened two days later."

However, Chalhoub ignores that most of the protesting Lebanese businesses are also "irregular." They do not declare their profits at the Finance Ministry and most of their workers are also Syrian. Smuggling is also accessible for all, despite the competitive advantages of Syrians.

Abu Ammar, who was forced to close his restaurant in the Bekaa recently by security forces, says that when he went to the concerned authorities to settle his situation, a lawyer told him not to bother, since the ministry would not give him a work permit.

"The lawyer advised me to seek a Lebanese partner and divide the shares, 52 percent for him and 48 percent for me. This would solve the issue," Abu Ammar explains. "So I found a Lebanese relative, agreed with him on doing it, and now we are back in business." He adds that "many have done the same thing to regularize their situation."

The Bekaa closures do not seem to be a real measure to solve the situation. Many, including Chalhoub, believe that it was merely a charade to appease a certain climate.

Beirut and Mount Lebanon governorates host around 28.8 percent of informal Syrian businesses, concentrated in Bourj Hammoud, Nabaa, Tarik al-Jadida, and Mazraa. However, these establishments have a different image than those in the Bekaa.

Rashid Kebbe, who heads the Barbour Market Business Association, believes "large Syrian capital should be welcome in Lebanon because it will invigorate the economy. We call on Syrian industrialists, known for their quality products, to come to Lebanon and become our partners."

North Lebanon attracts about 8.9 percent of Syrian establishments, spread around Akkar and Tripoli and, to a lesser extent, in Zgharta, Batroun, and Koura. But the traders in Akkar do not share the same position as those in Barbour. They have many complaints about the competition.

Head of the Akkar chamber of commerce Ibrahim al-Dahr believes the situation has reached a limit. "Syrian shop owners are receiving international aid, and they have all the conditions of production on their side, contrary to businessmen from Akkar. They also have political protection," he explains.

Dahr gives an example from the cell phone trade. "Syrian traders smuggle broken phones to Syria, where they get refurbished and returned to Akkar to be sold for pittance."

Around 8.1 percent of Syrian establishments chose South Lebanon, concentrating in Saida and Tyre. Head of the Chamber of Commerce in the south Mohammed Saleh believes that no one should be opposed to them, "since they encourage the business cycle and attract investments."

"In Tyre, the competition is confined to small traders," explains Salah Sabrawi, member of the Chamber of Commerce and deputy head of the municipality. "They are competing with Palestinian businessmen more than Lebanese businessmen."

This article is an edited translation from the Arabic Edition.

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Interesting article

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