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The Global Economic Doctor
August 11, 2020

The Global Economic Doctor

Beirut’s Agony: Ports, Food, and China

Beirut’s Agony: Ports, Food, and China

Summary: On August 4th the port of Beirut was the scene of a horrific explosion, which killed more than 150 people, injured 6,000 and left some 300,000 homeless. The damages are estimated to be in excess of $15 billion. The city’s hospitals, already struggling due to the COVID-19 pandemic, were damaged by the blast and swamped with injured. On top of already raging economic and political crises, the explosion now raises the question of food security. Prior to the explosion, 80 percent of Lebanon’s imports passed through Beirut’s port. Without a functioning port in Beirut, the country now relies on a handful of secondary ports, chief among them being Tripoli in the north, to import food and to export its products. The problem is that the country’s rail system has been dismantled and parts of the road system are not geared to carry heavy loads from Tripoli in the north to Beirut and points south. Lebanon is looking at a very challenging second half of 2020 and the condition of its ports will weigh heavy on national fortunes. But Lebanon’s geostrategic location in the Eastern Mediterranean may help it find an exit from its national crises.

Lebanon and Beirut
Beirut, once called the Paris of the Mediterranean, has long functioned as the main port for Lebanon. The city has a history of being a gateway of exports/imports for the interior, with Beirut functioning as a trade entrepot for Damascus and Homs in Syria as well as Amman in Jordan (to a lesser extent). Indeed, it has been one of the largest and busiest ports in the Eastern Mediterranean.

The harbor operates under the authority of the Gestion et Exploitation du Port de Beyrouth (GEPB), which is owned by the Lebanese government. The GEPB has not been known for its great management and accountability. According to Timour Azhari, writing for Aljazeera (August 5, 2020):

It is also not lost on Beirut’s residents that this tragedy emanated from the city’s port, a public utility known locally as the “Cave of Ali Baba and the 40 Thieves” for the vast amount of state funds that have reportedly been stolen there over the decades. The allegations include claims that billions of dollars in tax revenue never reach the state treasury due to schemes to undervalue imports, as well as accusations of systematic and widespread bribery to avoid paying customs taxes.

Whoever is to blame for the Beirut explosion, it has left a major crisis in its wake — in particular, food security. It is estimated that Lebanon imports more than 50 percent of its food on an annual basis. This puts the explosion into a potentially grim context. According to the UN’s Food and Agriculture Organization (FAO), the national grain silo, which was destroyed by the explosion, was the “only major grain silo” in the country.

The combination of the destruction of the 120,000-ton capacity structure, disabling of the port, and general political instability spells trouble. A humanitarian crisis would also affect Lebanon’s estimated 1.5 million Syrian refugees and 270,000 Palestinian refugees. While the UN’s World Food Program (WFP) has indicated that it stands ready to help deal with the situation, Lebanon faces a “grim food security situation.”

The WFP is allocating 5,000 food parcels to affected families, enough to feed five people for one month with basic food items such as rice, pasta, tuna, oil, salt and tomato paste. Other countries, such as France and the United States, are sending help, but most of this still depends on a port. Simply stated, the challenge is going to be getting those parcels into the hands of needy Beiruters, something made all the more difficult by the disabling of the country’s main harbor.

After Beirut, what is there?
In the aftermath of the explosion, Lebanese Minister of Public Works and Transport Michel Najjar stated that the Port of Beirut had sustained massive damage and most of its facilities and warehouses had been destroyed. He also noted: “We will depend on the Tripoli port in northern Lebanon, and we are currently evaluating its capacity along with other ports in Sidon and Tyre.”

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