REMAINS OF BEIRUT SILOS ARE EMBLEMS OF BANKER’S LOST DREAM FOR LEBANON
▶ Yusuf Beidas’s ill-fated vision of a Middle East financial centre resonates today, writes Khaled Yacoub Oweis
In Dresden, Germany, it was a statue of a woman with open arms looking over the ruined city. In Hiroshima, Japan, it was the walls of a church, and in New York, it was steel beams from the World Trade Centre.
Those were captured in photos – parts of structures that remained after great destruction and loss of life.
The disaster at the Beirut port last week was not as deadly, but the explosion was huge, and enough of one building at its centre survived for citizens and visitors to make out what it was.
It is the grain silos building, the brainchild of Palestinian banker Yusuf Beidas, whose rise and fall as one of the world’s most prominent businessmen in the 1960s became a defining chapter in Lebanon’s history.
While 158 people were killed in the explosion and more than 6,000 were injured, military specialists said the silos were crucial in shielding half of Beirut from greater destruction, in particular the heavily populated areas along the western coastal part of the city.
“That building made a major difference. Without it, the casualties could have been much worse,” said a security official who studied the event.
Beidas’s Intra Bank empire collapsed in 1966, and Lebanon’s politicians divided much of its assets, taking government overreach to new levels.
The once white silos appeared to have taken the brunt of the explosion, limiting the damage to the Beirut Corniche and the mostly Muslim western half of the city.
The building’s east-facing walls collapsed, but the ones facing west remained.
Retired lorry driver George Bassil, who used to transport supplies from the silos to mills in Beirut, said he grew up hearing from his father – who also worked there – how strong the 50-metre high structure was.
“I did not realise what he meant until I saw for myself. The silos were built correctly to take the pressure of the wheat and barley and corn inside it,” Mr Bassil told The National.
“They stopped the destruction from being far worse.”
The silos were funded by the Kuwait Fund for Arab Economic Development and built after Beidas died in exile in Lucerne, Switzerland, in 1968. They had a capacity of 120,000 tonnes, or 10 per cent of Lebanon’s annual imports, before the explosion.
Beidas’s son Marwan told The
National that the silos were part of his father’s efforts to make Beirut the trading and financial centre of the Middle East.
“My father greatly loved Beirut and its hardworking, civil people. The decent people. Not the indecent politicians,” said Marwan Beidas, who is in his 70s.
By the time a run on Intra forced the bank to halt paying its depositors in October 1966, the bank was the largest in the Middle East. It accounted for 40 per cent of deposits in Lebanon’s domestic banks.
Beidas set up International Traders, whose telex code was Intra, when he fled Jerusalem to Beirut after the founding of Israel in 1948.
He was so tight with margins and meticulous with numbers that International Traders soon took over most of the currency exchange market in Lebanon, providing Beidas with the capital to set up Intra.
Beidas outflanked the Lebanese and Syrian families that dominated banking in Beirut.
He focused on external expansion, and Intra soon had 40 branches abroad, amassing more petrodollar deposits than the competition, as well as from the Palestinian diaspora and the many Syrians who did not trust the country’s Baathist rulers.
He rubbed shoulders with a who’s who of the East and West, from France’s president Charles de Gaulle, to Egypt’s
Gamal Abdel Nasser, and King Faisal of Saudi Arabia.
Intra owned a skyscraper on Fifth Avenue in New York, property on the Champs Elysee in Paris, Chantiers Navals de la Ciotat, one of France’s biggest shipyards, and assets in Africa.
In Lebanon, Intra controlled the flagship Middle East Airlines, the famed Casino du Liban, and the Phoenicia Intercontinental Hotel, one of the world’s busiest.
Another landmark was the Beirut port. It was run by Intra’s subsidiary, Cie de Gestion et d’Exploitation du Port de Beyrouth.
It may never be known what led to the run on Intra. A sharp increase in interest rates in Europe and the US may have prompted some big Saudi depositors to shift their money westward. Intra had also invested heavily in fixed assets and liquidity was low.
For disputed reasons, the then newly established central bank, Banque du Liban, did not provide enough cash to boost Intra’s liquidity, although Intra had no shortage of assets.
In an interview with Life Magazine in 1967, Beidas gave a very low opinion of the Lebanese political class, and the Association of Banks in Lebanon.
He said his competitors “knifed him” and that he could not return to Lebanon because he would not be awarded the right to defend himself “freely and fully in a fair and open court”.
“No one can create a huge financial empire without some mistakes. But I will not return to be gagged and jailed without trial, to be silenced – perhaps forever,” he said.
Marwan Bedas said that when the run on Intra started, his father was in Europe, and received a call from Yusuf Salameh, the Palestinian-Lebanese merchant banker and writer who headed Intra’s branch in New York.
Salameh, who was the brother of Wedad, Beidas’s wife, asked him what to do with $4 million that were in Beidas’s personal account in New York, Marwan said.
The $4m in today’s money is equivalent to at least $32m.
“My father instructed my uncle to transfer the $4m to Beirut, to pay the depositors. My uncle made the transfer, and the money later evaporated,” he said.
In the Palestinian national psyche, Beidas embodied resilience. He also became a symbol of the failure of Lebanon to become a melting pot as Michel Chiha, the Lebanese statesman who laid the foundations of the republic after independence in the 1940s, intended.
Chiha envisaged a country where anyone could rise in its laissez-faire system, provided advancement was based on merit. Even Beidas’s enemies did not dispute that the “genius from Jerusalem” was well qualified.
In May 1966, five months before Intra collapsed, Lebanese publisher Kamel Mroueh was murdered in his office at the Al
Hayat newspaper in Beirut. Two men behind the killing, who served as enforcers for Nasser, were convicted. One was released, and the second escaped.
Mroueh’s son Kamel, who continued in his father’s line of work, regarded the killing as the day the rule of law collapsed in Lebanon, and a date to which the Lebanese civil war can be traced.
One of Beidas’s best friends, the late Lebanese business executive Najib Alamiudin, former chairman of Middle East Airlines, said that the 1975-1990 civil war started with the collapse of Intra. The two events marked failures in a system that were never remedied.
Beidas intended the silos to become the nucleus of a distribution centre, capitalising on Beirut’s advantage in logistics, marketing and modern finance. Few, after Beidas’s death at age 55, had an integrated vision for the economy of Lebanon, and the international connections to pursue it.
The silos became one of the few storage facilities for domestic markets. And they saved lives in a city with bittersweet memories of the man who built them and who did not live long after his dreams died.
Lebanon is in need of international help and competent leadership to recover from the tragic blast that devastated its capital last week.
On Sunday, a conference hosted by French President Emmanuel Macron and the UN raised $300 million in donations for Beirut, five days after the city was damaged by the huge explosion of 2,750 tonnes of ammonium nitrate improperly stored at its seaport. The incident killed hundreds, injured 6,000, rendered hundreds of thousands homeless and caused damage estimated at up to $15 billion. Donors insist the aid will go directly to the people and not to their government – a demand voiced by many Lebanese, enraged by the negligence of their leadership.
Even as Prime Minister Hassan Diab resigns – a key demand of protesters – the fall of the government is not enough to bring about real change in a nation plagued by corruption and mismanagement.
Senior Lebanese officials have admitted to knowing about the dangerous chemicals stored for six years at the port. This has shattered what little public confidence remained in a government that was already excoriated for its handling of Lebanon’s economic crisis and Covid-19 outbreak. The closing statement at Sunday’s donor conference urged Lebanese leaders to heed the call of their people to bring about lasting reform.
Beirut requires more than monetary assistance. The city needs medical aid, temporary shelters, engineering expertise and building equipment. Not a single penny was pledged by Lebanese leaders, nor have banks allowed Beirutis to access their foreign currency savings, locked as a result of informal capital control. Instead, the country’s political elite has evaded responsibility for the deadly explosion.
That the Lebanese people and the international community wish to bypass the state is a badge of shame for the government. But it is necessary in the short term. This, however, does not grant Lebanon’s leadership a licence to do nothing. European NGOs have complained that local authorities cancelled the relief they were planning to provide or stalled for hours before rescuers could access the site of the blasts. The country needs its institutions and officials to rebuild its capital and look after its people.
The Lebanese investigation into the blasts was meant to share its findings within five days. Nearly a week later, nothing has emerged. Protesters have called for an international investigation, as corruption pervades even the judiciary. Yet there is no guarantee that such a move would bring swift justice.
The only solution lies in strengthening Lebanon’s institutions and empowering the state, undermined by decades of sectarian politics, mismanagement and corruption. Lebanon is now at a crossroads. Protesters must continue to mobilise peacefully so that, with the help of the international community, pressure mounts for those responsible for the blasts to be prosecuted and true change to happen. If these efforts fail, the political class that has ruined Lebanon will remain in power.