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Ten billion dollars. This is the staggering figure of losses in Lebanon put forward by the Caretaker Minister of Economy, Amine Salam, as a result of the Israel-Hezbollah conflict. Beyond the human and material losses, there is an economic dimension that can no longer be ignored. For a country already at the bottom of the pit, this is one war too many.

Conflicts indeed have a significant humanitarian impact, but they also carry a heavy economic cost that cannot be overlooked. On average, a war annihilates 15% of a country’s GDP. In this context, beyond its humanitarian consequences, war slows down economic growth and intensifies inflation. Overall, the economic risks are multiplied. Additionally, citizens tend to spend less money on their daily consumption and save more. They also refrain from purchasing durable goods. Consequently, the entire economic cycle is disrupted.

According to economist Fouad Zmokhol, there are no exact figures. He points out that the figure of $10 billion put forward by the Caretaker Minister of Economy, Amine Salam, is entirely plausible. “The destruction and loss of income in the southern economy, especially in the agriculture and livestock sectors, are dramatic and will persist in the years to come due to phosphorus bombings, not to mention the losses in terms of investment and growth,” he explains.

Devastated Agriculture in the South

Fires have reignited in southern Lebanon since last Wednesday, and seven villages have been attacked again with phosphorus, according to sources in the Ministry of Agriculture. “Since the beginning of the war, 55 villages have been bombed 737 times with phosphorus. 6,000 dunums have caught fire, of which 2,200 have completely burned. These include forests, olive groves, oaks, and fruit trees,” the aforementioned sources specify. More than 60,000 olive trees and between 4,000 and 5,000 trees of various species (oaks and pines) have been destroyed. 55% of woods have been burned, 35% of fruit trees, and 10% of herbs (parsley, mint, coriander) have been damaged.

Tobacco growers will also not be able to plant this year as they cannot access their land (production represents about 2 million kilograms, which accounts for 55% of the country’s total production and generates more than 10 million dollars in revenue). As for fruits and citrus fruits, on a cultivated area of 7,500 hectares, the South alone generates 72% of the income from this sector (16.25 million dollars out of a total of 22.5 million dollars). The South produces 22% of Lebanon’s fruits and citrus fruits and 38% of the country’s olives, supplying 5,000 out of the 25,000 tons of olive oil produced annually in Lebanon. Thus, the losses suffered during the bombings can affect up to a fifth of the profits from Lebanese olive production, which amounts to nearly 23 million dollars.

All these crops generate vital income for the residents of the South, especially in border villages.

Interviewed by This is Beirut, an agricultural expert explains that it is possible to replant the lands, but first, they need to be cleaned and checked for soil and water contamination, which is very likely with the use of white phosphorus. Additionally, significant financial and technical investments are required to restore full productivity.

The ministry has not yet conducted the required analyses; therefore, it is still impossible to determine when farmers will be able to resume cultivation of their lands.

It should be noted that 65% of the population in the South works in the agricultural sector, given that this region benefits from favorable agro-climatic conditions. It is a highly productive area for a wide variety of products and represents about 80% of the GDP of southern Lebanon.

The Caretaker Minister of Agriculture, Abbas Hajj Hassan, estimated the losses in the agricultural sector alone to be “several billion dollars,” emphasizing, however, that this is an estimate as the war has not yet ended.

A Blow to Hotels

It is also a blow to the tourism industry, which accounts for 20% of the country’s gross domestic product (GDP). While Lebanese expatriates return to the country despite tensions at the border, foreign tourists are no longer coming. Therefore, “the hotel industry is severely affected, with the majority of Lebanese expatriates owning residences in Lebanon,” said the president of the Federation of Tourist Syndicates and the Hoteliers Syndicate, Pierre Achkar. He also mentioned that small mountain hotels, which are not large establishments, have closed their doors, but they do not formally declare it. They open randomly for three to four days when they have customers.

He emphasized that the real survival challenge for hotels lies in the exorbitant costs of electricity and water, expressing despair at any potential state aid. Achkar stated that despite everything, the situation is not completely bleak, as some establishments like the Four Seasons or Le Gray are reopening. However, he is convinced that true hope will only come when the war is over.