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Mideast Regional Economies and Recent Events

With the Middle East on the verge of a major widening of hostilities between Israel and its neighbors, what will be the economic effects should a grand-scale war break out? It goes without saying that while some commercial links with Israel will be affected, Lebanon, the country from which the Hizbullah terrorist group launched an attack into Israel that Israel deemed an ?act of war? long before the French foreign ministry called Israel?s response the same thing upon a ?friend of France?, will suffer the most economic damage from the actions of a group the United Nations has time and again told the Lebanese to disarm.

Israel has imposed a land, sea and air blockade on Lebanon. The three runways of Beirut?s international airport have been bombed by the Israel Air Force and thus made unusable ? meaning that as far as air travel to Lebanon is concerned at the moment, airlines around the world will likely lose money from cancellations of business trips and/or trips for pleasure. Israel has already hit several key roads in Lebanon, and has announced it may take out the Beirut-Damascus road as well.

Conversely, Cyprus ? where many flights to Lebanon have been diverted since the outbreak of hostilities ? might see a temporary increase in revenues as the island nation turns into a refuge of sorts from the fighting gripping the continent to its east. And Air Sinai, an Egyptian airline which ferries tourists and others back and forth from Egyptian resorts to Israel, canceled its flights to Israel on Thursday.