On September 21, 2016, La Maison du Futur in cooperation with the Konrad Adenauer Stiftung published a 24-page policy paper authored by Lebanon’s former Minister of Economy and Trade, Dr. Nasser Saidi. In his paper titled “Lebanon’s Oil and Gas Wealth: Policy Recommendations for Escaping the “Devil’s Excrement” Curse” Dr. Saidi addresses two key questions:
- How realistic are the expectations that Lebanon could become an energy exporter and drive significant economic growth?
- and what should be done to effectively manage Lebanon’s prospective energy wealth?
Highlights from the whitepaper include:
Four risks to Lebanon’s ability to tap into its petroleum wealth:
- Volatile and unsustainable commodity prices
- Uncertainty of Lebanon’s oil and gas reserves and production
- Geopolitical and legal risk – driven by maritime border disputes between Lebanon and its neighbours
- Domestic political risks - driven by dysfunctional politics and dismal governance
It is essential that three basic questions be publicly debated and include civil society:
- How fast should Lebanon’s oil and gas reserves be depleted?
- How much should be saved annually?
- What should be done with the revenue?
Policy recommendations to establish the building blocks of good governance and sound management of Lebanon’s oil and gas wealth:
- The Government of Lebanon should formally join the Extractive Industries Transparency Initiative (EITI) in order to ensure transparency and disclosure of governance and management of its natural resources.
- Lebanon should adopt and comply with the precepts of the Natural Resource Charter.
- Lebanon should establish an Independent Energy Regulator. The Lebanese Petroleum Administration should be made independent from the Ministry of Energy and Water (MEW) and legally transformed into a regulatory body for the oil and gas sector with a widened mandate for the administration and management of Lebanon’s natural resources. The separation and independence from the MEW is important to protect management and decision-making from political interference.
- Lebanon should adopt a Fiscal Responsibility Law and a Fiscal Rule.
- Lebanon should setup a Sovereign Wealth Fund that would manage and invest oil and gas wealth
For more details, please read the full English and Arabic versions of the whitepaper.
Jamil Hijazi is a volunteer at LOGI completing his Master in Oil and Gas Economics at the Centre for Energy, Petroleum and Mineral Law and Policy, Dundee University, Scotland.
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