Supervisor Elham AbolFateh
Editor in Chief Mohamed Wadie

Lebanon, Gulf States Tensions Hold Disastrous Repercussions on Economy


Sun 31 Oct 2021 | 11:52 AM
Taarek Refaat

Tensions Between Lebanon and the Gulf states (GCC), namely Saudi Arabia, could severely affect stability in the Middle East.

Both imports and exports are expected to drop significantly, as Saudi Arabia, Bahrain, and UAE summoned their Ambassadors in Lebanon over George Kordahi, Lebanon’s minister of information comments on the Saudi war in Yemen.

Saudi Arabia banned all Lebanese imports. Bahrain, Kuwait and the United Arab Emirates (UAE) decided to take similar measures in solidarity with Saudi Arabia.

Lebanon already suffers from an unprecedented financial crisis and the country has been trying to overcome its problems by negotiating a deal with the International Monetary Fund (IMF) which will be a harder task in light of the recent escalation.

If Lebanon is to reach a deal with the IMF, a big part of the money will be paid by GCC countries.

The crisis will have a bad impact on Lebanese industrialists and farmers who rely on the Gulf countries to export their goods.

The value of trade between Lebanon and the Gulf states witnessed a remarkable decline during the past year 2020, to a record USD 2.013 billion, compared to USD 3.467 billion during 2019, a decline of 42%.

The data issued by “G World Management” company, indicated that the value of the Gulf countries’ exports to Lebanon decreased by 60.8% to reach USD 828.435 million, compared to USD 2.115 billion during 2019.

Five commodities accounted for 80.1% of the total exports of the Gulf countries to Lebanon

Five commodities accounted for 80.1% of the total exports of the Gulf countries to Lebanon with a value of USD 663.612 million during 2020, led by precious stones and heavy metals with about USD 485.442 million, followed by plastics and their products with about USD 90.363 million, then pharmaceutical products by about USD 42.548 million. Cereals or flour exports recorded USD 22.893 million, while sugar and its products recorded USD 22.366 million.

The data indicated that the value of Lebanon's exports to the Gulf countries plunged by 12.4% during 2020 to reach USD 1.184 billion, compared to USD 1.352 billion, year-on-year.

Five commodities accounted for 57.8% of Lebanon’s total exports to the Gulf countries

Five commodities accounted for 57.8% of Lebanon’s total exports to the Gulf countries, with a value of USD 684.582 million, topped by precious stones and heavy metals at USD 342,691 million; followed by fruits with about USD 128,866 million, then vehicles, tractors, bicycles and their spare parts with about USD 90,713 million.

Exports of vegetables, plants, roots and food tubers recorded USD 77.696 million, while vegetables and fruits products were worth USD44.616 million.

The trade balance between Lebanon and the Gulf states improved in their favour during 2020 by USD 356 million, compared to a deficit in 2019 that amounted to USD762.487 million.

Data issued pointed out that the number of Gulf companies registered in Lebanon from 1990 until March 2021 reached 214, with a capital of more than USD10 billion.

It noted that Lebanon is the fourth highest recipient of foreign aid from Saudi Arabia, with more than USD 32 million in aid, 43 projects by the King Salman Humanitarian Aid and Relief Center.