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Don’t Count your Chickens or your Oil Wells Before they Hatch

By Claude Salhani | Tue, 07 May 2013 21:39 | 0

If one is to believe the hype and the optimism going around Lebanon these days, one would think that every Lebanese citizen, or at least those residing in Lebanon, is going to strike the jackpot and join the ranks of the Gulf Arab millionaires once drilling in the newly discovered offshore oil and natural gas fields begins.

Among the anecdotes making the rounds of Lebanese coffee houses is one that all Lebanese living abroad will now return to the old country. That would be nice but it would create a terrible shock to the real estate market, already over-priced as it stands.

A recent rating, taking into account rent calculated by the end of last year, placed Beirut as one of the most expensive cities for office space in the world. The survey by Cushman & Wakefield indicated that office space in Beirut was still less costly than Abu Dhabi and Amsterdam, but more expensive than Jakarta and Tel Aviv, with a going rate of about $640 per square meter per year. The world average is $510 per square meter, while the average in the Greater Middle East runs at around $475 per sqm.

Before the outbreak of the Lebanese civil war in 1975, a newly constructed office building on Beirut’s Hamra Street was cited in a Beirut newspaper as being the most expensive in the world, even surpassing cost of real estate on the Avenue des Champs Elysées in Paris. 

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And if you think that traffic is bad now in Beirut, wait until the the country’s prodigal sons and daughters, nieces and nephews, cousins and aunts and uncles start coming back. Lebanon’s current population stands at around four million – excluding about half a million Palestinian refugees and an additional plus or minus million Syrian refugees currently seeking shelter from their country’s war. 

While no precise figures are available the Lebanese government estimated in 1994 that there were roughly some 15 million Lebanese living outside the country.

Indeed, there is much (misplaced) optimism in the land of milk and honey (and monstrous traffic jams and frequent power cuts). There is a miscalculated belief that all the ills of the land will become bad memories of the past once the black gold and invisible gas begins finding its way from the depth of the Mediterranean Sea and onto world markets. Now optimism is good. Don’t get me wrong. I myself am a great optimist. The trouble with what is going on in Lebanon is that this optimism is reaching new heights, it is being mixed with reveries of a better life where all problems become solvent, and cash – in hard currency – starts to flow in as the oil flows out.

This current mind set is like mixing water to gasoline. It will fill up the tank faster and cheaper but it will ruin your engine and you will be left stranded by the wayside.

Among the popular anecdotes is one that relates how instead of making into the Guinness Books of records for creating the world’s largest bowl of humus, the Lebanese will now have the world’s largest bowl of caviar.

Or yet that there will be so much money going around that even valet parking attendants will now have their own valet parking attendants.  Farfetched? Perhaps, but then again in a country where you can get home delivery and valet parking even at your local McDonalds, everything is possible.

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That is assuming the rampant corruption that is so prevalent among many Lebanese politicians do not get a hold of the benefits of this new manna from the depths of the sea and the rest of the Lebanese are left inhaling the fumes from the additional oil and gas being consumed by the extra number of cars sitting in traffic jams and the fumes generated by the thousands of private generators needed because the government is still incapable of providing electricity around the clock

Chances are that now that there will be even more money to be made from selling Lebanese oil on the local market to run those generators, there will be even more incentives not to provide proper electricity needs even more.
 
So I for one would not hold my breath, other than to avoid the stench of the generators nor would I count my chickens or for that matter my barrels of per day before they hatch.

By. Claude Salhani

Claude Salhani, a specialist in conflict resolution, is an independent journalist, political analyst and author of several books on the region. His latest book, 'Islam Without a Veil,' is published by Potomac books. He tweets @claudesalhani.

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