With Israeli forces in action once more in both Gaza and Lebanon, the clock has been turned back in two areas of the Middle East, exposing the fragile foundations of diplomatic efforts to resolve the region’s long-running crises and throwing the region’s economy into jeopardy, the Middle East Economic Survey reported Monday.
The destruction of Lebanon’s economic infrastructure, and the air, sea and land blockade on the country, have regional as well as domestic implications where the economic and psychological price will be enormous, the report said.
Overnight, the long and delicate process of restoring international confidence in the country after 15 years of civil conflict has been wrecked.
This summer Lebanon was expecting a bumper tourism season, with the anticipated spending by visitors, from the Gulf states and elsewhere, seen as a vital source of income for the struggling national economy.
The Israeli raids — not least those on Beirut airport, Lebanon’s gateway to the world — have sent the process of reconstruction and rehabilitation back to square one, MEES said.
In regional terms, the re-emergence of Lebanon in recent years as a centre for tourism and business did much to stimulate intra-Arab commerce and economic activity.
An IMF report pointed to “an apparent strengthening of intra-regional economic ties,” strongly heightened after the September 11, 2001 bombings in the US, seen through the flow of capital from country to country and by a sharp rise in intra-regional tourism. Lebanon was the key player in this process, the MEES report added.
The report’s chief editor warns that groups opposed to current regimes — especially militant Islamic organisations — could capitalise on the anti-Israeli and anti-Western sentiments kindled by the latest violence to seek to destabilise the regimes that govern them.
And this could happen anywhere in the Middle East and North Africa, including oil and gas producing regions.
This possibility raises the question of what impact the violence and instability in the Middle East will have upon the global economy.
If Syria and Iran were to become involved, then the footprint of hostilities would cover the whole of the Middle East, including the Gulf, and the chances of disruptions to oil exports would rise significantly, the MEES report added.
The assumption is that if hostilities persist, the world’s sole superpower will intervene and seek to use its diplomatic muscle to broker an end to the violence.
But while three Israeli soldiers are held by radical Islamic groups, the Bush administration will be reluctant to drop its unqualified support for the actions ordered by the present Israeli government.
Even if the US does intervene and the hostilities stop, the casualties of the conflict could be so serious that the path back to economic and political stability will be formidably steep. And laying firm foundations for a process to resolve the region’s crises will be even more difficult than in the past.
