Businesses in northern Israel count the cost of conflict

Tourism and industry have been virtually wiped out in recent weeks, write Henry Chu and Vita Bekker in Kiryat Shemona, Israel

Tourism and industry have been virtually wiped out in recent weeks, write Henry Chu and Vita Bekker in Kiryat Shemona, Israel

August has been the cruellest month for Edna Sabach, all the more so since it's usually the high point of her year. Summer travellers fuel the travel agency where she works.

But Israel's war with Hizbullah in Lebanon laid to waste the tour bookings, the hotel reservations, the flight plans she laboured over for her clients for months, as blasted to bits as the company's building sign, which was hit by a Katyusha rocket.

"Summer is over until next year," Sabach said. "Everything we worked for is gone . . . And you can't get it back."

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The shaky ceasefire in place since Monday has prompted thousands of residents who fled Hizbullah rockets to stream back to northern Israel to face the grim task of discovering and assessing their losses.

The Israeli government has already issued its preliminary estimate of the month-long war's price tag: $5.3 billion (€4.1 billion), including defence spending, emergency aid to hard-hit communities, the cost of physical damage and the consequences of a 1.5 per cent loss in the country's gross domestic product. It all adds up to a blow for an economy that had gingerly begun to recover two years ago as Israeli-Palestinian violence subsided.

It could take years for northern Israel to mount a full recovery, officials say.

This town on the Israel-Lebanon border was drained of people for five weeks, its shops and offices shuttered, its streets abandoned.

Yesterday activity bloomed again as customers bought bread, residents swept out their homes and traffic clogged the highway that connects north and south through the Jordan River valley.

But as many people filled Kiryat Shemona's community centre as a local mall. City officials have turned the centre into the headquarters for residents filing claims for government assistance in the wake of the war, and crowds have filled the building to demand compensation for wrecked homes and businesses. Two police officers had to be called in on Thursday to maintain order.

An estimated 1,600 homes in Kiryat Shemona were damaged in the war. Since Sunday, said Shlomo Carmely, an official with the Israeli Tax Authority, 3,000 people have filed claims for compensation in a town of about 25,000. Tempers have been short in the summer heat.

"They weren't here for a month and a half, and they haven't seen their homes, and now that they see them, they want to fix them right away," Carmely said. "It's like, 'Hey, time out!'"

For businesses, especially seasonal ones, the losses have been irrecoverable.

The famous peaches, lychees and pears of north Israel have rotted in the orchards that blanket the fertile hills. Farmers hope that their apples are salvageable, but only now have they started returning home to see whether the rockets that set ablaze vast tracts of land consumed their trees and whether their inability to spray pesticides doomed their harvests. Officials say that agricultural damages in the north exceed $100 million.

Tourism has suffered, not only here in the scenic region around the Sea of Galilee, but throughout Israel.

About half of the visitors who had planned trips to Israel in July and August have either cancelled or been no-shows, said Ami Etgar, director general of the Israel Incoming Tour Operator Association.

An estimated 630 factories in northern Israel also shut down during all or part of the war, including Iscar Metalworking Cos, a business in the upper Galilee in which American billionaire Warren Buffett's Berkshire Hathaway Inc bought a controlling stake in July.

More rockets rained down on this area, just a few miles from the border, than any other part of the country.

At the Port of Haifa, losses in July surpassed $14 million. Sixty per cent of Israel's foreign trade passes through the port. During the war, the port handled only about a quarter of its typical cargo traffic, as global shipping companies sharply scaled back operations.

"When international companies leave, they don't hurry back very soon," said the port's president, Amos Uzani.