30 Years of Partnership
What is happening in Lebanon?

HERZ partner Sami Hert & Sons SARL is one of the few companies in Lebanon that has been able to maintain its business. However, turnover has shrunk massively: only 25% of the usual turnover can now be achieved. The reasons for this are the political situation and the massive taxes in Lebanon. On the occasion of the 30th anniversary of the successful partnership, it was a special pleasure for HERZ to welcome Loutfi Hert, Managing Director of Sami Hert & Sons SARL, to HERZ in Vienna.

In addition to business matters, the current situation in Lebanon was also at the centre of the conversation. A great opportunity for HERZ News to report first-hand and authentically on the challenges of everyday life in Lebanon and the current market situation. After all, who better to tell us about the reality on the ground than someone who experiences it first-hand every day?

HERZ in Beirut - 1994

It was in the so-called ‘Paris of the Middle East’ that Gerhard Glinzerer and HERZ sales manager Susanne Juza crossed paths with Loutfi Hert, Managing Director of Sami Hert & Sons SARL, in Beirut in 1994. What began as a meeting within the framework of an organisation of the Austrian Chamber of Commerce in Beirut developed into a long-standing and trusting partnership between these two companies. Loutfi Hert returned to his home city of Beirut after the end of the civil war in 1990. He had previously lived in Canada for 18 years. On his return, he took over his father's company and expanded it dynamically with fresh ideas. He ultimately built up a nationwide sales structure in Lebanon with showrooms and warehouses, which are fortunately owned by the company.

In an interview with HERZ News, he talks about the corrupt situation in Lebanon and the societies money being frozen in the banks by the government.

HERZ News: What is the current political situation in Lebanon and how does this affect the industry?

Loutfi Hert: We have had an economic crisis in Lebanon since 2019. The money that the entire population had in bank accounts before 2019 has been frozen. We are only allowed to withdraw 150 dollars per month from our accounts, from our own money. Any other amount is taxed at 85 %. At the same time, inflation in the country increased dramatically. 1 dollar used to be equivalent to 1,500 Lebanese pounds, now we are at 90,000 Lebanese pounds. Taxes and customs duties have been set higher than usual. Economically, it is impossible for a company to survive without a strong and stable foundation. How are you supposed to finance all this if you don't have access to your own money?

HERZ News: How can business still be conducted?

Loutfi Hert: We have developed into a cash society. Cash is photographed and the serial number of the notes is checked. We no longer accept cheques because they are worthless. Banks are now only used to make transfers, but no longer to store money. When I have payments to make, two employees take the money to the bank to transfer it. They take different routes and are equipped for their own protection.

HERZ News: Could it be said that the situation has also led to an increase in crime?

Loutfi Hert: People are desperate, unemployed and depressed. Not even basic needs can be properly met. The price of food has increased tenfold within days, while salaries have remained the same. A good example is water: the water tanks are filled twice a week. We pay for water from the government that we can't even drink. That's a monthly cost of around 130 dollars. An average salary is the equivalent of around 350 dollars.

HERZ News: What about the power supply and heating?

Loutfi Hert: Electricity is not made available to us. The government has spent 45 billion dollars on electricity in the last 15 years. The money has gone into the pockets of politicians. Either you have generators or you buy electricity from people who have generators. Diesel is used for heating. My running costs are around 500 dollars for diesel, although I only heat for two hours in the morning and evening. It's all pretty corrupt.

HERZ News: Was the situation better before 2019?

Loutfi Hert: It used to be corrupt too, but we never thought they would help themselves to our money. The salaries of civil servants have been raised to European levels. A person who doesn't even turn up for work earns 3,000 dollars a month - someone has to pay that. That's how they took the people's deposits. It was a political privilege for them. From 2019 onwards, things went significantly downhill. Since then, several hundred thousand people have left the country and moved to the Gulf-Region (Qatar, Saudi Arabia, etc.), Turkey, France, Canada or the USA in search of a better and secure life.

HERZ News: How do the Lebanese see the situation?

Loutfi Hert: The silent majority in Lebanon is fed up with corruption and with all politicians from all classes and religions. We have the right to peace and the right to live. Beirut was called the Paris of the Middle East. When there was nothing in the Middle East, Beirut was the jewel. Will it return again? I hope so. All we need is stability. I'm an optimistic person by nature, even though I've been through hell. Something has to happen, something has to change. We'll see how long it takes. Hope lives in me.

HERZ News: Thank you very much for your openness and clear statements on the situation in Lebanon. There is little we can do from Austria to improve the current situation. We wish you the very best under the given circumstances and we hope that you will be able to resume normal business activities as soon as possible.

Did you know that...

.. archaeological finds in Lebanon prove that this area was already inhabited by Homo sapiens at least 40,000 years ago? Egbert, the skeleton of a child (first photo) and Ethelruda, upper jaw fragment (second photo), were found together with their tools, which belong to the Upper Palaeolithic period (Euroasian Palaeolithic). This confirms the theory that Homo sapiens migrated to Europe via the Levant. With an estimated age of 45,900 years, Ethelruda is also older than all the remains of early Homo sapiens found in Europe to date.