The trade balance deficit, which declined significantly to reach about $7.5 billion in 2020 as a result of the decline in imports and the deterioration of the exchange rate of the lira, could have been stopped by increasing exports, which would benefit from the depreciation of the local currency and by attracting investments. Unfortunately, things will not go as the traders and industrialists expect.
Vice President of the Industrialists Association Ziad Bakdash told Sky News Arabia that exports to Saudi Arabia amounted to $240 million in 2020, mostly foodstuffs, at a time when industrialists expected that the volume of exports would rise to $500 million in 2022 with the depreciation of the lira. And the entry of new production lines into the Lebanese industry, including sterilizers, cleaning materials, tools and medical supplies.”
But the expectations of the industrialists were disappointed, according to Bakdash, after the scandal of captagon smuggling from Lebanon to the Kingdom, which prompted many industrialists to move their factories from Lebanon abroad, in addition to a large number of them buying lands in Cyprus, Turkey and Egypt two months ago, which means the flight of Investments from Lebanon, and many citizens losing their job opportunities. And all because of the economic and political policies that have been in place for years, especially what happened to the Gulf states in general and Saudi Arabia in particular.
As for the head of the Lebanese-Gulf Relations Development Authority, Elie Rizk, he explained in a statement to “Sky News Arabia” that the losses that will be inflicted on the Lebanese economy are not limited to the trade sector – as the volume of exports to the Gulf countries reaches about 1.2 billion dollars out of 3.7 billion dollars. Is the total volume of exports in 2020 – but will also affect the tourism sector after banning the arrival of many Gulf nationals; This means another blow to the tourism sector, especially since the spending of Gulf tourists is twice what other tourists spend.
Rizk pointed out that about 80 percent of the Saudis have sold their property outside Beirut, while others are going to sell their property inside Beirut as well, calling on the local authorities to move to heal the rift, prevent Lebanon from being a conduit for drug smuggling to the Gulf countries, and stop any hostile rhetoric against the Gulf countries. Which did nothing but good for Lebanon over the past decades.
According to economic expert Basem Al-Bawab, Lebanon’s loss of $1.2 billion in exports has negative repercussions on workers, industrialists, traders and farmers, as Lebanon is unable to find an alternative market for goods that were exported to the Gulf countries. This will lead to stagnation of goods on the one hand, and spoilage of vegetables and fruits on the other hand.”
Rizk concluded by saying that “Lebanon is losing the cash dollar at a time when it needs every dollar to avoid further collapse of the national currency and to enhance its hard currency assets.”
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