Lebanon loses out in exports with its biggest customer in crisis
BEIRUT: Lebanon has lost around $150 million in exports since the beginning of 2012, the head of the state-run Export Development Council was quoted as saying Wednesday.
Khaled Farshoukh warned that an imminent crisis would hit the industrial and agricultural sectors if the government failed to secure export routes bypassing Syria, were the security situation has been deteriorating since an uprising started March 2011.
“[Lebanese exports would face] a disaster if border crossings with Syria become completely closed,” the National News Agency quoted Farshoukh as saying.
He reiterated that the government should take measures to secure additional maritime shipping routes, particularly to vital markets in the Gulf Cooperation Council states.
“The recently opened ferry route between Mersin [Turkey] and Tripoli is not enough because it only serves the Turkish and Iraqi markets,” he said. “We need a route that could serve the Gulf markets.”
While the head of the Investment Development Authority of Lebanon told The Daily Star last week that the government was finalizing talks over the issue with various shipping agencies, a solution has yet to materialize. He admitted shipping via sea is not a readily available option.
Agriculture Minister Hussein Hajj Hasan said Tuesday maritime transport should be a part of a comprehensive plan to boost exports, rather than a temporary measure.
Farshoukh said industrial exports were particularly affected by the deteriorating situation in Syria. Some “40 percent of all our exports are transported through Syria. The figure stands at over $1.5 billion,” he said.
According to Farshoukh the last few months saw the sharpest drop in exports. “The number of trucks crossing the borders fell from over 300 to just 50 [per day],” he said. “On many days not a single truck is crossing the border.”
He said most truck owners were hesitating to take shipments after many of them faced security incidents. “Many trucks were abducted and others which were shot at,” he said.
Transportation prices have risen sharply, Farshoukh added, putting the increase at around 50 percent.
Moreover, most insurance companies have been refusing to issue policies on trucks and goods passing through Syria. “Those who still accept have multiplied their fares by more than ninefold,” he said.
Economists have given conflicting reasons behind Lebanon’s alarming trade deficit that increased 22.5 percent to $8.71 billion in the first half of 2012. While some said smuggling of fuel to Syria accounted for the increase, others said the soaring cost of imports and stagnating exports are behind the widening deficit.
- Fully booked for post-sanctions business: Iran's five star hotels are buzzing with Western business delegations
- The source of all brain drain: Lebanon's university graduates downbeat about their future prospects
- Is Erdogan's party waging a 'holy war' against the free market economy?
- Costs and benefits: the tough economics of hosting the World Cup
- Mind the gap: descripancy between income and social development persists in the Middle East