Money can make the world go round, and money can make people powerful. Except for Lebanon, where the roar of wealth is louder than usual as the country struggles to emerge from a deep economic crisis.
On a recent Friday night, new imported luxury cars lined the streets below Beirut’s Sky Bar. Inside the rooftop venue, waiters snaked their way through the well-dressed crowd, handing out sparklers and $400 worth of Dom Pérignon champagne with a sense of urgency prepared for a crisis.
But the closest thing to an emergency was a table running out of tequila. “We cleared them from Don Julio,” said Rolex-wearing Jean, 27, who returned to Beirut from his base in West Africa. “That’s what happens when there are too many high rollers.”
The Sky Bar was already a popular nightclub long before Lebanon’s 2019 crisis, but that year as anti-establishment protests swept the country and the banking crisis turned into a devastating financial collapse, the GDP ) shrunk by 40% and the bar closed.
Today, however, luxury hospitality is enjoying a resurgence, helped by a segment of the population that has been unaffected by the crisis and even profited from it, as well as intense pressure on currencies that have allowed some businesses to repay debt cheaply.
After reopening in June, Sky Bar quickly regained its appeal among foreign tourists, status-conscious locals and wealthy expats heading home for the summer. For some, the Sky Bar’s return heralds a new chapter in Lebanon, where unbridled flamboyance is back in vogue – for the few who can afford it.
“It’s so cool to be rich again,” said Sandra, a 43-year-old fitness enthusiast, while shopping at luxury department store Aïshti.
Although half of the country’s more than 8,000 restaurants, bars, cafes and nightclubs have closed since 2019, business has begun to pick up recently. Tony Ramy, president of the Restaurant and Patisserie Owners Association, said about 250 restaurants will open in 2023, with at least 30 more expected to welcome customers before the end of the year.
“It’s been an outstanding season,” Lamy said of the blockbuster summer, “creating much-needed jobs.”
Industry experts say the lack of a national economic recovery plan and wild currency swings are actually benefiting some hotel companies. Owners were able to repay their debt at an official exchange rate that did not reflect the true value of the Lebanese pound, helping them free up capital for reinvestment.
Lebanese have long been praised for their ability to party through their darkest days, which included a 15-year civil war from 1975 to 1990 and occupation by foreign troops. “But even during war and political instability, Lebanese people still have money,” said Nasib Gobril, chief economist at Byblos Bank in Beirut.
That changed in 2019: The celebrations quickly fizzled out, and as the nation sank, jaw-dropping excesses were suddenly met with disapproval.
But this year Lebanon is back to its former glory. The country’s Mediterranean beaches are packed, restaurants and clubs are sold out, and multimillion-dollar weddings are back.
Analysts say the rich in Lebanon today include those who early withdrew their money from banks or used their connections to move money abroad, as well as those who never used the country’s banking system in the first place. Others work for foreign companies, receive salary in U.S. dollars, or receive remittances from relatives abroad, which amounted to an estimated $7 billion last year.
“New categories of wealth are also created,” Gobril said. He cited cases of people profiting from the crisis by hoarding subsidized imports, exploiting loopholes in the banking system or engaging in blatant criminal activities such as money laundering.
An estimated 2 million tourists visited Lebanon this summer, including returning expatriates, who also continued to spend.
This is in stark contrast to the plight of most Lebanese. Since 2019, the Lebanese pound has depreciated 95% against the US dollar.Lebanon has an estimated population of 6 million, more than three-quarters of whom are still alive below bread lineAccording to the United Nations. As people continue to lose access to savings, record numbers of families are falling into food poverty and children are out of school.
Lebanon lacks the funds to power its national grid, and its politicians are too stubborn to form a government and push through reforms that would unlock much-needed international aid.
Experts say it’s difficult to tell how many people in Lebanon can still afford basic goods, let alone luxuries. The $10 billion economy is largely dollarized and cash-based, a byproduct of the financial collapse and bank failures.
Some economists say that around 5-10% of the population has incomes close to 2019 levels. “But given the level of economic activity, that’s not what we’re seeing: the purchasing power is there whether we like it or not,” Gobril said. He said 25% of the population had regained most or all of its pre-crisis levels. All income.
Bazalt, a Japanese fusion restaurant in downtown Beirut, has been fully booked since opening in June.Located in a former bank, guests can sip cocktails, try truffle pizza or enjoy royal hair The chef’s carefully planned cuisine and the DJ’s spinning dance music echo in the restaurant surrounded by basalt rocks.
A 25-course sushi set costs $150 per person, the equivalent of six months’ salary for a civil servant, and comes with imported Japanese fish and gold leaf garnishes.
“We’ve never seen a business like this,” said Tarek Karam, a partner at Bazalt. The restaurant is expected to recoup its investment in two and a half years, “but currently we expect it to be completed in just 16 months.”
Karam attributes Bazarte’s success not just to tourists but also to wealthy locals whose purchasing power is undervalued. “Tourists are great, but we see a high demand from locals for restaurants like ours. They come and they spend a lot of money.”
Lebanese new poorThe former wealthy elite were quick to show disdain for these people upstartor as one high-end restaurateur put it: “Customs officials take bribes and diesel generator operators or currency exchangers profit”.
“I hate to talk about social class, but I’m not going to let these people into my agency until there’s a crisis,” he said.
“But, like everyone in Lebanon these days, I’ve had to adapt my business to their more flamboyant tastes.”
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