Beirut is preparing to open a new chapter in its relations with Gulf countries following President Joseph Aoun's visit to Saudi Arabia yesterday. This marks the end of more than a decade of diplomatic coldness, which has proven particularly damaging to Lebanon's economy, even before the 2019 crisis.  “The two sides have agreed to address obstacles to the resumption of Lebanon's exports to Saudi Arabia and the necessary procedures to allow Saudi citizens to travel to Lebanon,” according to an official statement following Aoun's meeting with Crown Prince Mohammad bin Salman. This step signals the reactivation of 22 bilateral agreements — frozen since 2017 — covering sectors such as finance, agriculture and security. These agreements are expected to be revived during Prime Minister Nawaf Salam's upcoming visit to Saudi Arabia with an expanded ministerial delegation during Ramadan.  “We are already preparing to welcome tourists from the Gulf,” said Pierre Achkar, president of the Federation of Tourism Trade Unions and the Union of Hotel Owners. He anticipates “several hundred million dollars” in tourism revenue this year, noting that at their peak, Gulf tourists generated billions of dollars annually before the first restrictions were imposed by the Gulf monarchies starting in 2011.  Beyond tourism, Lebanon’s broader economy stands to benefit from renewed commercial flows between the two countries. The impact of the diplomatic cooling on Lebanese exports has been significant, with Saudi Arabia accounting for between 5 percent and 10 percent of Lebanon's annual exports between 2012 and 2020, although this share has gradually declined over the past 15 years.  While tensions had already strained trade, the real turning point came in 2021, when Lebanon lost one of its key trade partners amid an ongoing economic crisis.  The kingdom effectively halted the entry and transit of all Lebanese exports. This had a devastating impact on Lebanese exports.  From 2022 onward, Lebanese exports to Saudi Arabia have nearly vanished, dropping to less than $1 million annually, according to customs data. In contrast, Saudi Arabia was Lebanon's third-largest export market in 2020, with nearly $230 million in exports — 5.6 percent of Lebanon's total exports. According to Elie Rizk, president of the Lebanese-Gulf Business Development Commission, which helps Lebanese and Gulf companies establish themselves in both regions, the actual number may have been even higher, as some exporters undervalued their goods to pay lower taxes.  The top five categories of products exported to Saudi Arabia included prepared foods and beverages (25.5 percent of the total), chemical products (15.8 percent), fruits and vegetables (14.5 percent), machinery and mechanical appliances (9.8 percent), and paper and printed materials (7.1 percent).  According to customs data, Lebanese exports to Saudi Arabia fell from nearly $454 million in 2012 to $230 million in 2020, a near 50 percent drop over that period. This decline was part of a broader downward trend in Lebanese exports, which decreased from $5.6 billion in 2012 to $4.1 billion last year, partly due to the closure of the Jaber-Nassib border crossing between Syria and Jordan in 2015, after years of civil war in Syria. The crossing reopened in October 2018.  Beyond trade with Saudi Arabia itself, the kingdom plays a key role for Lebanese exporters as a transit hub for goods heading to other Gulf countries. For example, the Association of Lebanese Farmers reported that $24 million worth of fruits and vegetables were exported to Saudi Arabia between January and November 2020, while $68 million of these goods were exported to other Gulf states during the same period. This represents a substantial loss of revenue for Lebanon, which hopes to recover it with the lifting of restrictions.  “Once bilateral agreements are signed and restrictions are lifted, we expect a boost in exports to the kingdom. Lebanese factories are capable of quickly ramping up production to serve the Saudi market once again,” said Rizk. (ICE BEIRUT)

Fonte notizia: L'Orient Today