by Dana Halawi
BEIRUT, Oct. 13 (Xinhua) -- The agreement between Lebanon and Israel to resolve a decades-long dispute over their maritime border in the eastern Mediterranean will have both short and long-term positive effects on Lebanon's economy, Lebanese experts said.
Bilal Alameh, a political and economic researcher and professor of economics, management, and marketing at the Modern University for Business and Science (MUBS) in Beirut, said the offshore exploitation activities will create hundreds, if not thousands, of jobs for the Lebanese.
Another short-term economic benefit, according to Alameh, is the petroleum companies' purchase of equipment and materials for its operations, which is expected to benefit relevant business sectors in Lebanon.
Lebanese and Israeli leaders announced Tuesday the two countries have reached a "historic" agreement to demarcate the maritime border after years of U.S.-mediated negotiations.
The agreement has been welcomed in Lebanon, where people have pinned their hopes on the agreement to mitigate the country's lingering economic crisis that has plunged the majority of the population into poverty.
A few hours after the announcement of the deal by Lebanon and Israel, Lebanese Energy Minister Walid Fayyad said that Lebanon would start immediately with the logistical preparations for oil and gas exploration in its waters.
Meanwhile, Prime Minister Najib Mikati asked the representatives of France-based oil and gas company TotalEnergies to take necessary measures for oil and gas exploration in Lebanese waters.
"Even if we immediately start exploring for oil and gas in Lebanon, it will take at least four years before we can begin excavation and selling, so the financial gain will be delayed," said Alameh.
According to Ayman Omar, director of the Ishraq Center for Studies and an economist, oil and gas exploration will have a significant financial impact on Lebanon's public finances because it will drastically improve the country's budget in terms of revenues.
"The budget will not only be devoted to salaries and wages, servicing the public debt, and making advance payments for electricity, but also funding infrastructure projects, for instance," he said.
He believed the agreement would also restore confidence in Lebanon's financial market, attract investment to the oil and gas sector and other related industries in the country, and raise its credit ratings by international rating agencies.
However, Omar emphasized that an oil and gas exploration deal does not exempt the government from structural reforms and should not prevent the judiciary from holding the corruption and misfeasance of the state's resources accountable.
Lebanon has been going through its worst economic and financial crisis, with public debt surpassing 100 billion U.S. dollars in the absence of sufficient revenues for the government to cover its expenses.
Lebanon's steep crisis plunged over 80 percent of the population into poverty, with the unemployment rate among the youth standing at 70 percent, according to the United Nations Children's Fund. ■
