Page 5 - MEOG Week 24

MEOG Commentary MEOG

Lebanon lurches

towards the abyss

Positive signs in Lebanon’s energy and tourism sectors have been
swept aside by currency collapse and protests on the streets.

LeBanon ThE past few months have seen the Lebanese Tourism to fly high?
pound crash to record lows, banks unable to It was also announced last week that Beirut inter-
exchange currency and mass protests on the national airport will reopen to passenger traffic
What: streets of Lebanese cities. Matters now appear to by early July at the latest, as the economically
Street protests in be reaching a nadir. ravaged nation seeks to jump-start its tourism
Lebanon have escalated. The past few months have seen topsy-turvy sector for the all-important summer season.
news coming from Lebanon but the past week’s The airport will initially operate at a reduced
Why: mass protests threaten to take matters out of capacity of between 10 and 20 per cent - equating
The collapse of the control. to some 2,000 to 3,000 daily passengers based on
local currency and the number of entries and exits last year.
economy have brought Drilling hopes Prime Minister hassan Diab said last Tuesday
unemployment and In February to considerable fanfare the Tungsten that Lebanon would reopen air travel to wealthy
misery. Explorer set off to drill at its first exploration well Gulf Arab nations - historically a source of more
situated some 30 kilometres (16 nautical miles) than 30 per cent of Lebanon’s tourist traffic per
What next: offshore Beirut in block 4. A potential follow year - and focus on countries that are conducting
The green shoots of up in block 9 near the Israeli border was also coronavirus tests, known as PCR tests. Special
growth in tourism and mooted. safety procedures would be implemented for
energy may not be This was followed by Energy Minister Ray- passengers coming from other countries, he
allowed to grow. mond Ghajar declaring that while offshore added.
drilling had found traces of gas, there were no “What is important for us today is to put Leb-
commercially viable reserves in what was sup- anon back on the tourism map while balancing
posed to be one of the country’s most promising between health protection and tourism in order
domains. Earlier he had announced that drill- to revive the economy,” Diab said during a meet-
ing results in the Block 4, the first block to be ing with representatives of tourism-dependent
explored in Lebanon’s territorial waters, showed sectors, according to a statement released by his
that the basic elements of a geo-petroleum sys- office.
tem were confirmed in the Lebanese sea, while Tourism is one of the main pillars of the
the existence of a gas reservoir was not verified. small eastern Mediterranean nation’s crisis-ad-
As recently as May he was quoted as saying dled economy, accounting for some 18 per cent
that previous seismic studies by Lebanon proved of gross domestic product in 2017. Around two
the existence of gas, which encouraged French million tourists visit Lebanon each year, drawn
company Total to come and work in this field oil by the country’s picturesque beaches and moun-
and gas exploration in Block 9 of its territorial tains, ancient ruins and renowned food, drink
waters would start by the end of this year. and nightlife. The sector has been hit hard by
This may be so, but there has been much ove- the country’s descent into an economic crisis
rhype of Lebanon’s first offshore drilling efforts last year but if it were to recover that would be
in the past so they offer little recourse out of eco- a major boost.
nomic crisis. Following the nationwide lockdown. hun-
Lebanon’s potential to produce oil and gas dreds of businesses tied to tourism have closed
was heavily advertised to both international in the past six months, while tens of thousands of
donors and the population, and the latest workers have been laid off, according to tourism
announcements dashed the government’s hopes sector representatives.
of using a major hydrocarbon discovery as lev- Most lockdown restrictions have since been
erage to ease itself from its colossal debt – which eased. Though the lockdowns have heaped even
stands at $90bn. more financial misery onto Lebanon, officials
Exploration in block 9 was planned to start say the measures have helped mitigate the virus’s
before the end of the year, but Ghajar said the spread. Lebanon has recorded 1,368 confirmed
work will begin when the circumstances are cases of COVID-19 and 30 deaths from the dis-
right. ease, according to John hopkins University.

Week 24 17•June•2020 www. NEWSBASE .com P5