The Lebanon-Israel Maritime Demarcation Deal: Implications and Opportunities

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Hanin Ghaddar|6 Oct 2022

A United States-mediated maritime border demarcation deal between Lebanon and Israel seems to be in its final stages. Lebanese and Israeli officials say it will be signed soon even though discussions are still on, and there is a possibility that a final agreement may not happen soon.

This week, the US ambassador to Lebanon, Dorothy Shea, handed ‎President Michel Aoun and PM-designate Najib Mikati a written ‎proposal from US mediator Amos Hochstein.‎ According to Lebanese media reports, the letter contains a final US proposal. Lebanon has also reportedly submitted a list of amendments to the American proposal to the United States. However, the Israeli government has refused these suggested amendments.

The US proposal includes a total separation between maritime ‎and land and gives Lebanon control over the Qana field while Israel maintains complete control over the Karish field. The proposal maintains Line 23 as the demarcation sea line, which Lebanon had submitted to the UN, and allows Lebanon to start exploring the Qana field. In addition, the agreement includes recognition of what Israel calls the “buoys line,” which extends five ‎kilometers into the sea from Rosh Hanikra, on the border with Lebanon.‎

Everything looks good from the Lebanon government’s perspective, and Hezbollah might spin it as a victory to legitimize their arms, claiming it has protected Lebanon’s interests. However, the devil is in the details.

Right to Explore

First, although Lebanon gets all of Qana, it only gets the right to explore, dig, and extract the gas. However, Israel’s claim in Qana will still have to be compensated. This week, Israeli Prime Minister Yair Lapid revealed that Israel‎ would receive royalties from gas that Lebanon extracts in the disputed area. The royalties deal will be worked out between Israel and the gas consortium led by French energy company Total, which has the Lebanese license to extract gas from the Qana field.

Second, despite all the victory rhetoric over Hezbollah’s threats to save Lebanon’s gas rights and interests, Hezbollah eventually agreed to a deal with Israel. This is also likely to mark their narrative and strategy for a long time, no matter how much they spin it. The group only accepted the deal because their threats were void, and Hezbollah could not afford to go to war with Israel. This new reality will weaken the resistance narrative in the long run.

In the years following the 2006 war, Hezbollah reached two critical realizations: that the threat of its missiles and drones could achieve more than the arms themselves. They also realized that another war could have worse consequences for the group than concessions to its sworn enemy. Moreover, the quality of its fighting force has been eroded by its subsequent involvement in the Syrian war, compelling it to opt for quantity over quality when recruiting new fighters.

Many Hezbollah units are now less well-trained, less ideological, and less disciplined, and the group would need more time, resources, and funding to rehabilitate them for war. Meanwhile, Hezbollah’s main patron, Iran, will not be in a good financial position to fully fund the group or rebuild its army and arsenal unless the stalemate over the nuclear deal is broken. Therefore, the group’s leadership has been hoping that the mere threat of war will push the parties into a deal sooner rather than later.

Third, while Karish has gas, Qana is still a prospect. Only when drilling is done will everyone know if and how much gas there is in Qana. It would take years before Lebanon sees any benefits, even if gas was found in Qana. Until then, Lebanon’s economy might push the country into worse economic deterioration and more instability. International investors who might be encouraged by the deal today might not enthusiastically invest in Lebanon at large if instability ensues.

Long-Term Benefits

Lebanon and Israel will have to face critical voices accusing them of concession. However, any deal requires concessions, and this one seems to be beneficial for both countries’ security and economy. Israel will start extracting gas and exporting it to Europe, hit by an energy crisis due to Russia’s war on Ukraine. Moreover, Lebanon is in dire need of financial revenues amid the economic crisis that has been crippling it since 2019. With fewer war threats and an energy deal, Lebanon could benefit from a new place in the international energy market.

While Israel’s economy benefits, there are many concerns that Lebanon’s revenues will disappear – as usual – in the vortex of corruption. Furthermore, without serious energy sector reforms – such as establishing a sovereign wealth fund – the Lebanese people and institutions might not see any real gains. That is why it is vital that international efforts continue after the deal is finalized to ensure Lebanon immediately starts implementing these reforms.

In the long run, this deal is an excellent opportunity to transition Lebanon from the war narrative to one of peacebuilding and economic development. Hezbollah and the current political class will stick to their old methods, but a deal like this is a partnership, especially with Israel owning a share in Lebanon’s Qana field. Common economic interests will impose a new reality that negotiations are more effective and beneficial than wars and conflicts. It will help Lebanon with investment opportunities and break its isolation.

When Israel and Lebanon share common interests in Qana and gas exploration along their borders, security, stability, and cooperation will be favored over threats, conflicts, and hostility. Eventually, the narrative will change as Hezbollah’s threats lose their value and justifications, and the next phase will probably witness more diplomatic solutions than conflict.

The next step would be negotiations over the land borders and Shebaa Farms. The success of the maritime border deal will prove that only this willingness on both sides, along with diplomatic negotiations, could lead to an Israeli withdrawal from Shebaa Farms and the end of conflict along the entire border. This phase will take more time and will be much more complicated. However, it is not impossible and probably the only way forward.

/epc.ae

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