The view from Beirut: It's the end of progress
Bomb damage - a Beirut suburb lies in ruins.
Fortune International -- The tourists are gone from the swank downtown of newly rebuilt Beirut - a shoppers' paradise with high-end stores, including Burberry, Tiffany's, a Porsche dealership, and haute couture designers like Beirut's own Elie Saab.
The wealthy Persian Gulf Arabs who have made the Phoenicia Intercontinental Hotel their home away from home left town before Israeli bombs reduced Beirut's suburbs to rubble in the fight against Hezbollah.
The Israeli campaign has damaged more than key Hezbollah neighborhoods: It has destroyed all progress made in the tiny nation since the end of the civil war in 1990. Lebanon's economy relies almost exclusively on tourism, international business, and finance. Now its infrastructure has been wrecked and its tourists traumatized, and everyone is looking to get out.
"Lebanon is a service economy," says journalist Leena Saidi. "Its natural resource is its people - educated, multilingual, and business-savvy." After the civil war, which destroyed most of Beirut's downtown, the capital went on a building spree. But corruption and public-sector bloat sent Lebanon's debt skyrocketing to more than $40 billion.
It wasn't until the end of Syrian military and political occupation in 2005 that international companies - and tourists, who now account for 25% of Lebanon's GDP - started flocking back.
Economist Marwan Iskandar says Lebanon was headed for 6% growth before the wave of attacks. Now it's looking at zero growth at best. The cost of rebuilding its highways, power plants, refineries, and airport is incalculable.
But the greatest damage is psychological. "They need to fix the psychology of seeing Beirut at war again," says Iskandar, "to earn back the tourists."