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Economic analysis - Economic Paradoxes
Published in AL HAYAT on 05 - 07 - 2010

Small countries often fail to achieve their aspirations and dreams, in particular when the costs of the latter exceed its financial means, to execute mega projects. But it is not possible to always invoke incapacity and lack of means. Instead, the state should have a vision and a strategy, and draft scenarios for their implementation that exist between two boundaries or levels: a minimum one and a maximum one.
Some circumstances in a small country like Lebanon may apply to Arab strategies, within the context of the enhancement of the Arab League, which appears to have aged rather prematurely. This league seems unable to achieve the bare minimum of collective aspirations. This is while Arab investments, be they of an individual nature or of a governmental one (through sovereign funds), are attracted to non-Arab spheres.
Peculiarly, there were reports in the media a few days ago regarding a strategic agreement between Turkey and the State of Qatar, whereby the latter would export natural gas to Turkey, while the latter exports water to the gas-rich emirate. Such an obvious barter is purely commercial, and is based on securing certain resources to the people, resources that the latter do not possess. However, the oil-water barter was first proposed in Lebanon in middle of the last century, by the then-Minister and Member of Parliament Maurice Gemayel, but it was described at the time as being ‘pure fantasy'.
The Lebanese proposal was accompanied by studies indicating that there is a massive water aquifer underneath the territories of Lebanon, which Gemayel said derives its groundwater resources from Russia, over time, and which connects the Yamuna and Mount Hermon, which Israel seeks to seize along with its waters and its strategic peaks. In parallel with Gemayel's studies on water resources, there was the genius of Ibrahim Abdel-Al, who plotted the geography of water and oil in the small country. However, the state's budget and the vision of geniuses go their separate ways.
The Turkish-Qatari project took place in conjunction with the Lebanese Council of Minister's abstinence in what regards funding the Lakes and Dams Project to secure the country's future water needs, in tandem with the massive momentum in development and construction, and the urban sprawling that is taking place in parallel with decreasing precipitation, as a result of desertification on the one hand and global warming on the other.
Oddly, and in contrast with the ‘malaise' expressed regarding the funding of the water resources plan, Israel announced that it will build the largest desalination plant in the world south of Tel Aviv, which will produce around 300 million liters annually, or enough water to meet 40 percent of Israel's demand, and in 2013, it will produce half of Israel's demand.
Remarkably, the Lebanese Ministry of Energy presented the project with the aim to obtain funding from the general budget. In other words, it did not attempt to attract foreign investment, nor did it probe the depths of the earth in search of water that can be extracted according to Gemayel's hypothesis. The ministry did not attempt to study the water streams at sea off the northern coasts either, and which are now possible to exploit, noting that these do not cause pollution like drilling for oil at sea.
It is also possible, as long as the Ministry of Energy is proposing to sell water to the citizens by using meters, to call for international or exclusively Arab tenders to carry out the Lakes and Dams Project, through Built, Operate and Transfer (B.O.T) tenders, or by privatization, since this latter has become a slogan that remains unimplemented.
What can be said regarding the inter-Lebanese disputes with respect to socio-economic affairs, which are justified by the public debts that amount to more than one and half of the GDP, can also be said about the joint projects with Syria. While Damascus is seeking to build a joint dam and lake with Turkey on the estuary of the Orontes, the agreement to build a joint dam on the Orontes's headwaters with Lebanon has been hindered for decades. The situation is similar with many other various joint projects, over which there are differences between the two neighboring countries (between the considerations for economic integration, or common interests, and private interests instead of public ones).
Bizarrely, the ‘small country', which has since the middle of the past century conducted tests to ascertain whether there is oil in its territories and waters, did not think about passing a law on oil until Israel announced the discovery of massive natural gas reserves in its territorial waters, which it demarcates as it wishes, while gnawing at Lebanese territorial waters.
In the beginning of last April, the Seminar for Development Studies republished an e-book entitled “Maurice Gemayel and the Lebanese Development Resources”, with a preface by Minister of Culture Salim Wardeh. It mentioned that: Lebanon's exceptional feature in the eastern Mediterranean is that it is the most important water reservoir, followed by the Caucasus and Sudan. This Lebanese water reservoir in its present natural condition causes damages to several Lebanese regions as a result of flooding and overflowing into its lands, and particularly damages Palestine and Syria as parts of the Hula Valley in Palestine and of the Al-Ghab plain in Syria and Al-Asharna are turned into swamp land. Thus, the exploitation of Lebanese water resources in accordance with a comprehensive plan will prevent damages and lead, at the same time, to better exploitation of this hydroelectric energy for the benefit of Lebanon and Syria. It would also invalidate Israel's pretext in demanding Lebanon's wasted water that flows into the sea, or which overflows in the Hula Valley. [End]
Gemayel's book, which was published in 1951, enumerates the advantages that Lebanon can accrue by adopting a comprehensive plan for its water resources, and estimates the hydropower that can be stored at 1.3 billion cubic meters. The book also makes the case for the integration of power generation from hydropower or by relying on oil, which would secure around five thousand kilowatt hours per year for every Lebanese citizen, the highest rate in the world at the time.
Six decades ago, Gemayel's studies regarding a comprehensive plan for Lebanese water resources generated results that would lead to, among other things, to the draining of the Hula Valley and the swamplands of the Lebanese Bekaa, the Asharna and the Ghab in Syria. The surplus water in Lebanon would be diverted to Syria to push the desert eastwards, and the surplus water in the South of Lebanon would be transported in pipelines parallel to Aramco's pipelines into Saudi Arabia.
In the context of the paradoxes as well, the Arab Ministerial Council for Water recommended mid-last week that: “six million dollars be allocated to fund water projects in the Arab world”. This is while the Jordanian Minister of Water and Irrigation announced that “the studies indicate that Israel exploits 80 percent of Palestine's aquatic basins, and also those of the Syrian Golan and the Lebanese South”. In addition, the Iraqi Minister of Water Resources warned of the possibility of water shortage in his country as a result of irrigation projects in the countries upstream on the joint rivers with Turkey and Iran.
Indeed, these are economic paradoxes that await serious solutions.


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