By Correspondent
NBC News
updated 9/5/2006 3:19:50 PM ET 2006-09-05T19:19:50

BEIRUT, Lebanon — U.N. Secretary-General Kofi Annan said on Tuesday that he expected progress within 48 hours on a deal to have Israel lift its air and sea blockade of Lebanon.

The Israeli embargo, an attempt to keep arms from reaching Hezbollah, has put a lid on all air and sea traffic into Lebanon, except for some commercial and aid flights into Beirut and some cargo ships carrying aid.

NBC News’ Jim Maceda reports from Beirut on the effects of the Israeli blockade on the Lebanese economy and the likelihood that it will come to a close anytime soon.

What is the effect of the Israeli naval blockade in Lebanon that has now been in effect since July 12, the start of month-long war between Israel and Lebanese Hezbollah guerrillas?

With a wide range of figures coming — from economists to politicians — it’s hard to quantify the economic effect of the blockade. One very anti-Israeli member of parliament says that Lebanon is losing $50 million a day. That’s probably a high estimate, but there is no doubt that Lebanon is losing and has lost millions of dollars a day.

There are various ways, some more subtle than others, to gauge the effects. While you don’t see poverty in the streets as a result of the blockade, the most obvious effect seems to be a lack of tourists in the major hotels, restaurants, and shops in Lebanon. It is hard to quantify the costs of the lack of tourism, but it is clearly millions of dollars now that it is almost two months since the conflict began.

I went to Baaldek, one of the ruins of the ancient world in the east Bekka Valley that usually draws in thousands and thousands of tourists. I went out there with a small group of other NBC journalists — tourists, on this occasion — to see this incredible site. We were the only visitors there.

We were absolutely hounded by frustrated merchants who hadn’t seen any business in weeks. Each one had a terrible story about how as a result of the war and the blockade, their business has just dried up. Ever since the war began there has just been no tourism in Lebanon and that continues to be the case.

Before the war, economists were predicting that the Lebanese economy would have a good year and was expected to have 4 to 6 percent growth. Now the same economists, as a result of the ongoing blockade, are talking about not only zero growth — but negative growth for this year.

Another example is the property boom. That was supposed to be up around 50 percent before the war, now as the blockade goes on, real estate is continuing to plummet. Unemployment is also continuing to grow as a result of the blockade — economists are now expecting unemployment to rise to about 20 percent. In addition, stock market shares continue to drop as well.

All that said, you don’t feel a crunch in terms of basic goods and there are no signs of a humanitarian crisis. There has been no visible tightening of belts among people who can afford to buy consumer goods. The reason for that is that while ports are closed, the roads are open. There is a tremendous flow of goods from Syria and Turkey — in fact, things the traffic of goods being shipped by land has been beefed up to try to compensate for the closures at the ports and at the airport.

What about anger among Lebanese that Israel is still implementing the blockade at all?

There is no question that Lebanon is losing a lot of money as a result of a lack of trade and that the economy is being hit. However, many Lebanese will tell you that equal to the problem of economic loss is the loss of face, the loss of dignity, the loss of sovereignty.

The issue of sovereignty is what’s really bothering the average Lebanese man or woman in the street. The fact that the war is over, and Israel has no institutional or legal right to maintain a blockade on a sovereign country, yet continues to do so, is angering to many Lebanese.

That is the basic premise for this ongoing demonstration — sit-in, if you will — by a group of Lebanese parliamentarians. They want this blockade over — not just for economic reasons, but because they say it is a violation of Lebanese sovereignty.

What is Israel’s position on the blockade? 

On Tuesday, Kofi Annan expressed optimism that the embargo would be lifted in the next 48 hours. There are a lot of people who are waiting to see what in fact will happen. People have heard this before from the United Nations.

When Annan recently visited Beirut, there was word that the embargo would end within 48 hours. As it turned out, Israeli Prime Minister Ehud Olmert rejected any notion of lifting the embargo at that time.

Israel’s reaction on Tuesday to Annan’s suggestion was similar, saying it will lift this embargo when it believes the pieces are in place — meaning the Lebanese forces and UNIFIL, the U.N. peacekeepers — are in sufficient numbers to take over that blockade.

For the Israeli government this is an arms embargo and their position remains unchanged. There may be some developments, but people here are taking it with a grain of salt.

The Lebanese parliament is trying to keep pressure on the international community to halt the embargo — not only by maintaining this sit-in, which is getting some publicity — but also sending an official letter of protest to the U.N. Security Council.

What are the Israeli’s holding out for? Are they waiting for the return of the Israeli soldiers?

Olmert is clearly in a weakened position as a result of this war. He needs to get something from the Lebanese. He may have compromised his political future by prosecuting the war in what was perceived by many in Israel as a relatively moderate way. He is facing a tremendous amount of criticism by his public right now. In the polls, he’s never had worse numbers, his popularity has plummeted.

Obviously he wants the Israeli soldiers back and there is a sense that things are moving forward behind the scenes. Annan suggested on Monday that he could assist in the mediation on that issue, but it seems that we are still days or weeks away from a breakthrough there.

The more immediate issue is getting the Lebanese Army, Navy, and UNIFIL forces in place to take over the job of preventing arms shipments from getting in from Syria or from the sea to the hands of Hezbollah. That is Israel’s main concern. It’s doing the job now with a lot of aerial reconnaissance, drones are flying over this country all the time, which Lebanon considers violations of Resolution 1701 because they are penetrating Lebanese airspace. 

But Israel believes its doing the job and doing it well. They are less confident in the Lebanese Army and want to see a robust UNIFIL force doing that job at the borders, at the airport, at the seaport. 

Analysts say that we are more like 10 to 14 days away from Israel lifting the blockade — mainly because it will take that much time to get the Lebanese Army and UNIFIL forces up to sufficient numbers and in place to take over that job.

During the actual conflict, one huge issue was all of the displaced people who were fleeing the fighting. What has happened to all of those people?

According to the U.N. there are still about 250,000 displaced people, out of the million people who fled their homes during the conflict. So, three-quarters of the people have returned home, but another quarter of a million either can not return home because their homes have been destroyed or they are too fearful of a rekindling of fighting to go home.

Now, what you don’t see, despite those figures, is any kind of refugee camps. We have looked for them, we have asked about them, but have seen almost nothing.

About a week ago, we saw about 600 to 700 displaced Lebanese in three or four buildings just outside Sidon. We went back on Monday to film them, but they had already been absorbed by the local population. That is the Arab way — it is an amazing phenomenon.

Literally, 250,000 displaced people have been absorbed by Arab hospitality — by extended family, extended friends of family, extended tribes. So, you don’t see them, but the problem is still there.

Jim Maceda is an NBC News correspondent on assignment in Beirut, Lebanon.


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