Lebanon conflict hurting economy, experts say

Residents of Hay Madi, a southern suburb of Beirut, salvage what remains of their home and business after an Israeli airstrike. (Hugh Macleod/IRIN)

BAGHDAD — Economists say that the current conflict in Lebanon is having a negative impact on the Iraqi economy as most of its trade with Lebanon has been frozen and business with Syria has decreased.

“Lebanon and Syria were Iraqi’s most important trading partners,” says Muhammad Rushi, an economic analyst and professor at Baghdad University. “Hundreds of contracts had to be cancelled or postponed due to the current violence in Lebanon.”

There are no reliable statistics on the volume of trade between those countries but officials say that millions of dollars are exchanged every month in trade that includes medicines, vegetables and grains.

According to Rushi, loss of revenues from cancelled contracts could be disastrous to Iraq’s already shaken economy. “Trade with those countries [Syria and Lebanon] involves a huge number of investors, and even the ministry of Trade in Iraq,” Rushi notes.

Since the Israeli attacks on Lebanon started on 12 July, nearly 100 trucks carrying Iraqi exports to Lebanon have been kept at the Iraqi border or inside Syria. Drivers say that some materials, particularly food items, have already expired.

“Because of the long stoppage at the border and because of the hot weather, the food that I was sending to Beirut has become rotten,” says Safua’ad Ahmed, owner of a trading coompany in the capital, Baghdad. “As a result, I have lost about $200,000. Many of my colleagues have suffered huge losses for the same reason, and in such cases there is no one who can help us.”

Trade with Syria has also decreased in the past two weeks as Syria has been preoccupied with helping those Lebanese who are seeking refuge in their territory.

“Most of the contracts with Syria and Lebanon have been frozen and it is unlikely they will be revived in the near future,” says a senior official in the Iraq’s Ministry of Trade. “Even products from Syria that are required in Iraq are scarce.”

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