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AI era can benefit from lessons of the nuclear arms race

AI era can benefit from lessons of the nuclear arms race

AI era can benefit from lessons of the nuclear arms race
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Every so often, news emerges of an advanced AI model outperforming its predecessor, restarting debates about the trajectory of AI. These incremental improvements, while impressive, also reignite discussions about the prospect of artificial general intelligence or AGI — a hypothetical AI that could match or exceed human cognitive abilities across the board.

This potential technological leap brings to mind another transformative innovation of the 20th century: nuclear power. Both promise unprecedented capabilities but carry risks that could reshape or even end human civilization as we know it.

The development of AI, like nuclear technology, offers remarkable opportunities and grave dangers. It could solve humanity’s most significant challenges or become our ultimate undoing. The nuclear arms race taught us the perils of unchecked technological advancement. Are we heeding those lessons in the AI era?

The creation of nuclear weapons introduced the concept of mutually assured destruction. With AGI, we face not only existential risks of extinction but also the prospect of extreme suffering and a world where human life loses meaning.

Imagine a future where superintelligent systems surpass human creativity, taking over all jobs. The very fabric of human purpose could unravel.

Should it be developed, controlling AGI would be akin to maintaining perfect safety in a nuclear reactor — theoretically possible but practically fraught with challenges. While we have managed nuclear technology for decades, AGI presents unique difficulties.

Unlike static nuclear weapons, AGI could learn, self-modify, and interact unpredictably. A nuclear incident, however catastrophic, allows for recovery. An AGI breakout might offer no such luxury.

The timeline for AGI remains uncertain and hotly debated. While some “optimistic” predictions suggest it could arrive within years, many experts believe it is still decades away, if achievable at all.

Regardless, the stakes are too high to be complacent. Do we have the equivalent of International Atomic Energy Agency safeguards for AI development? Our current methods for assessing AI capabilities seem woefully inadequate for truly understanding the potential risks and impacts of more advanced systems.

The open nature of scientific research accelerated both nuclear and AI development. But while open-source software has proven its value, transitioning from tools to autonomous agents introduces unprecedented dangers. Releasing powerful AI systems into the wild could have unforeseen consequences.

The Cuban Missile Crisis brought the world to the brink but also ushered in an era of arms control treaties. We need similar global cooperation on AI safety — and fast.

We must prioritize robust international frameworks for AI development and deployment, increased funding for AI safety research, public education on the potential impacts of AGI, and ethical guidelines that all AI researchers and companies must adhere to. It is a tough ask.

With AGI, we face not only existential risks of extinction but also the prospect of extreme suffering and a world where human life loses meaning.

Mohammed A. Alqarni

However, as we consider these weighty issues, it is crucial to recognize the current limitations of AI technology.

The large language models that have captured the public imagination, while impressive, are fundamentally pattern recognition and prediction systems. They lack true understanding, reasoning capabilities, or the ability to learn and adapt in the way human intelligence does.

While these systems show remarkable capabilities, there's an ongoing debate in the AI community about whether they represent a path toward AGI or if fundamentally different approaches will be needed.

In fact, many experts believe that achieving AGI may require additional scientific breakthroughs that are not currently available. We may need new insights into the nature of consciousness, cognition, and intelligence — breakthroughs potentially as profound as those that ushered in the nuclear age.

This perspective offers both reassurance and a call to action.

Reassurance comes from understanding that AGI is not an inevitability based on our current trajectory. We have time to carefully consider the ethical implications, develop robust safety measures, and create international frameworks for responsible AI development.

However, the call to action is to use this time wisely, investing in foundational research not just in AI but also in cognitive science, neuroscience, and philosophy of mind.

As we navigate the future of AI, let us approach it with a balance of excitement and caution. We should harness the immense potential of current AI technologies to solve pressing global challenges while simultaneously preparing for a future that may include more advanced forms of AI.

By fostering global cooperation, ethical guidelines, and a commitment to human-centric AI development, we can work towards a future where AI enhances rather than endangers human flourishing.

The parallels with nuclear technology remind us of the power of human ingenuity and the importance of responsible innovation. Just as we have learned to harness nuclear power for beneficial purposes while avoiding global catastrophe so far, we have an opportunity to shape the future of AI in a way that amplifies human potential rather than diminishing it.

The path forward requires vigilance, collaboration, and an unwavering commitment to the betterment of humanity. In this endeavor, our human wisdom and values are the most critical components of all.

Mohammed A. Alqarni is an academic and consultant on AI for business.
 

Disclaimer: Views expressed by writers in this section are their own and do not necessarily reflect Arab News' point of view

Sweden storm to group victory with 4-1 win over Germany

Sweden storm to group victory with 4-1 win over Germany
Updated 2 min 2 sec ago

Sweden storm to group victory with 4-1 win over Germany

Sweden storm to group victory with 4-1 win over Germany

ZURICH: Sweden made the most of the sending-off of Germany defender Carlotta Wamser to sweep to a 4-1 win and secure top spot in their Group C clash on Saturday, with the Germans also going through to the quarter-finals as runners-up
The Swedes finished top of the group with a perfect nine points from their three games and will take on the runners-up in Group D — which features France, England, Netherlands and Wales — with the Germans taking on the winners of that group.
Germany defender Wamser set up Jule Brand for her side’s opener in the seventh minute, but the Swedes hit back through Stina Blackstenius five minutes later and they took the lead through a fortuitous goal from fullback Smilla Holmberg in the 25th minute.
Wamser’s red card for a deliberate handball in the box in the 32nd minute allowed Fridolina Rolfo to confidently slot home the resulting penalty, and substitute Lina Hurtig rubbed salt in Germany’s wounds with an 80th-minute goal to seal an emphatic win.


Lawmakers visit ‘Alligator Alcatraz’ after being blocked

Lawmakers visit ‘Alligator Alcatraz’ after being blocked
Updated 5 min 23 sec ago

Lawmakers visit ‘Alligator Alcatraz’ after being blocked

Lawmakers visit ‘Alligator Alcatraz’ after being blocked

OCHOPEE, Florida: Democratic lawmakers condemned Florida’s new Everglades immigration detention center after a state-arranged visit Saturday, describing a crowded, unsanitary and bug-infested facility that officials have dubbed ” Alligator Alcatraz.” A Republican on the same tour said he saw nothing of the sort.
The tour came after some Democrats were blocked earlier from viewing the 3,000-bed detention center that the state rapidly built on an isolated airstrip surrounded by swampland. So many state legislators and members of Congress turned up Saturday that they were split into multiple groups to view the facility.
“There are really disturbing, vile conditions and this place needs to be shut the hell down,” Rep. US Rep. Debbie Wasserman Schultz, a Democrat from Florida, told reporters after visiting. “This place is a stunt, and they’re abusing human beings here.”
Cage-style units of 32 men share three combination toilet-sink devices, the visitors measured the temperature at 83 degrees  in one area that was billed as air-conditioned and grasshoppers and other insects abound, she and other Democrats said.
Although the visitors said they weren’t able to speak with the detainees, Rep. Maxwell Alejandro Frost, a Democrat from Florida, said one called out “I’m an American!” and others chanting, “Libertad!,” a Spanish word for “freedom.”
State Sen. Blaise Ingoglia, a Republican from Florida, countered that he had seen a well-run, safe facility where the living quarters were clean and the air conditioning worked well. He recalled that a handful of detainees became “a little raucous” when the visitors appeared but said he didn’t make out what they were saying.
“The rhetoric coming out of the Democrats does not match the reality,” he said by phone. “It’s a detention center, not the Four Seasons.”
Journalists weren’t allowed on the tour, and lawmakers were instructed not to bring phones or cameras inside.
Messages seeking comment were sent to the state Division of Emergency Management, which built the facility, and to representatives for Gov. Ron DeSantis. DeSantis spokesperson Molly Best highlighted one of Ingoglia’s upbeat readouts on social media.
DeSantis and fellow Republicans have touted the makeshift detention center — an agglomeration of tents, trailers and temporary buildings constructed in a matter of days — as an efficient and get-tough response to President Donald Trump’s call for mass deportations. The first detainees arrived July 3, after Trump toured and praised the facility.
Described as temporary, the detention center is meant to help the Republican president’s administration reach its goal of boosting the United States’ migrant detention capacity from 41,000 people to at least 100,000. The Florida facility’s remote location and its name — a nod to the notorious Alcatraz prison that once housed federal inmates in California — are meant to underscore a message of deterring illegal immigration.
Ahead of the facility’s opening, state officials said detainees would have access to medical care, consistent air conditioning, a recreation yard, attorneys and clergy members.
But detainees and their relatives and advocates have told The Associated Press that conditions are awful, with worm-infested food, toilets overflowing onto floors, mosquitoes buzzing around the fenced bunks, and air conditioners that sometimes shut off in the oppressive South Florida summer heat. One man told his wife that detainees go days without getting showers.
Florida Division of Emergency Management spokesperson Stephanie Hartman called those descriptions “completely false,” saying detainees always get three meals a day, unlimited drinking water, showers and other necessities.
“The facility meets all required standards and is in good working order,” she said.
Five Democratic state lawmakers tried to visit the site when it opened July 3 but said they were denied access. The state subsequently arranged Saturday’s tour.
The lawmakers have sued over the denial, saying that DeSantis’ administration is impeding lawmakers’ oversight authority. A DeSantis spokesperson has called the lawsuit “dumb.”
As Democratic officials headed into the facility, they said they expected to be given a sanitized and limited view.
Wasserman Schultz told reporters the lawmakers came anyway because they wanted to ask questions and get a sense of the structure and conditions.
 


Why BCG’s involvement in Gaza marks an all-time low for consulting firms

Why BCG’s involvement in Gaza marks an all-time low for consulting firms
Updated 18 min 23 sec ago

Why BCG’s involvement in Gaza marks an all-time low for consulting firms

Why BCG’s involvement in Gaza marks an all-time low for consulting firms
  • FT investigation examined Boston Consulting Group’s role in Gaza aid planning, including plans for Palestinian relocation
  • BCG has disavowed the work and fired two senior partners — but the scandal sheds light on the wider industry’s irresponsibility

LONDON: A Financial Times investigation, published on July 4, found that a consulting firm connected to the Gaza Humanitarian Foundation secured a multimillion-dollar contract to help shape the initiative and a proposal for the possible “relocation” of Palestinians from the Gaza Strip.

The Boston Consulting Group was found to have played a central role in designing and managing the US- and Israeli-backed project, which aimed to replace the UN as the primary coordinator of humanitarian aid in Gaza.

Amid growing criticism, BCG denied any ongoing involvement in the Gaza Humanitarian Foundation. In a June 7 statement, the firm said it initially provided “pro bono support” in October 2024 to help launch “an aid organization intended to operate alongside other relief efforts.”

BCG has faced heavy scrutiny for its role in Gaza’s postwar reconstruction, mainly through its work with the controversial Gaza Humanitarian Foundation. (AFP file)

The firm said two senior US-based partners who led the initiative “failed to disclose the full nature of the work” and later engaged in “unauthorized” activities outside the firm’s oversight.

“Their actions reflected a serious failure of judgment and adherence to our standards,” the firm said. “We are shocked and outraged by the actions of these two partners. They have been exited from the firm.

“BCG disavows the work they undertook. It has been stopped, and BCG has not and will not be paid for any of their work.”

The company emphasized it is strengthening internal controls to prevent future breaches. “We deeply regret that in this situation we did not live up to our standards,” the statement said. “We are committed to accountability for our failures and humility in how we move forward.”

FAST FACTS:

• A Financial Times investigation examined BCG’s role in Gaza aid planning, including controversial proposals for Palestinian relocation.

• BCG disavowed the work and fired two senior partners, but documents suggest deeper involvement and lapses in internal oversight.

• The scandal underscores wider concerns about consulting firms’ ethics, with similar controversies involving PwC, KPMG, EY and McKinsey.

Following the FT story, BCG issued another statement on July 6 disputing aspects of the reporting. “Recent media reporting has misrepresented BCG’s role in post-war Gaza reconstruction,” the firm said.

BCG reiterated that the initiative was not an official company project and was carried out in secret. “Two former partners initiated this work, even though the lead partner was categorically told not to,” the statement read.

“This work was not a BCG project. It was orchestrated and run secretly outside any BCG scope or approvals. We fully disavow this work. BCG was not paid for any of this work.”

Buildings that were destroyed during the Israeli ground and air operations stand in northern of Gaza Strip as seen from southern Israel on July 10, 2025. (AP Photo)

However, individuals familiar with “Aurora” told the FT that BCG’s involvement ran deeper. The report revealed that BCG created a financial model for Gaza’s postwar reconstruction that included scenarios for mass displacement.

This revelation intensified scrutiny of the consulting industry’s ethical boundaries.

“Consulting companies… are held to a higher standard of professionalism and ethics than other lines of work,” Dr. Abdel Aziz Aluwaisheg, the Gulf Cooperation Council assistant secretary-general for political affairs and negotiation, wrote in an April opinion piece for Arab News.

He warned that without corrective action, major firms risk alienating clients.

Displaced Palestinians carrying relief supplies from the Gaza Humanitarian Foundation (GHF) return from aid distribution centers in Rafah to their tents in the southern Gaza Strip on May 29, 2025. (AFP)

ndeed, in recent years, top consulting firms like McKinsey, PwC, KPMG, and EY have faced growing scrutiny for putting profit over ethics, with scandals revealing conduct lapses worldwide.

McKinsey, for instance, faced heavy backlash for its role in the US opioid crisis. The firm was accused of helping Purdue Pharma and other manufacturers to aggressively market addictive painkillers, including OxyContin, The New York Times reported.

Aluwaisheg noted in his op-ed that some of these ethical lapses “are quite common throughout the consulting business.”

However, he added, “big firms are more likely to commit them,” citing sprawling operations that limit senior management oversight.

The industry’s core business model may be the issue: consulting firms adopted law firms’ high-fee model for expert advice — without their legal liability.

Despite this, demand for consulting services remains high. Aluwaisheg believes governments and businesses will continue to need outside expertise.

People walk by PricewaterhouseCoopers (PwC) New York headquarters. (AFP)

Still, accountability concerns have prompted some governments to take action. In February, Ƶ’s Public Investment Fund banned PwC from taking on new advisory and consulting contracts for one year.

Some media outlets reported that the decision was related to an ethical violation tied to an alleged recruitment of a senior-level employee from the client’s side. The suspension did not impact PwC’s auditing work.

These events highlight ongoing concerns over consulting firms’ roles in controversial actions. In April 2024, KPMG’s Dutch arm was fined $25 million after over 500 staff cheated on internal training exams, Reuters reported.

Yet the BCG case may represent a new low for the industry.

The Gaza Humanitarian Foundation’s model bypassed traditional organizations like the UN, restricted aid distribution to limited sites under Israeli oversight and relied on private security contractors. This move has had deadly consequences.

According to Gaza’s health authority, at least 740 Palestinians have been killed and almost 4,900 injured while attempting to reach aid centers, drawing condemnation from humanitarian organizations and UN officials.

Displaced Palestinians look around on alert in the wake of gunfire shots as they receive food packages from a US-backed foundation pledging to distribute humanitarian aid in western Rafah in the southern Gaza Strip on May 27, 2025. (AFP)

UN aid chief Tom Fletcher called the initiative a “fig leaf for further violence and displacement” of Palestinians in the war-torn enclave.

In a July 10 letter to the FT editor, BCG’s CEO Christoph Schweizer pushed back against the allegations that his firm endorsed or profited from projects related to Gaza.

“None of that is true,” Schweizer wrote, adding that “a few people from BCG were involved in such work. They never should have been.”

Adding another layer to the controversy, FT reported on July 6 that staff from the Tony Blair Institute were also implicated in postwar planning that included scenarios for mass Palestinian displacement — despite being prominent advocates for peace in the Middle East.

Christoph Schweizer, CEO of Boston Consulting Group. (Supplied)

The plan, seen by the FT, imagined Gaza as a regional economic hub, complete with a “Trump Riviera” and “Elon Musk Smart Manufacturing Zone,” based on financial models developed by BCG.

While the Tony Blair Institute for Global Change denied authoring “The Great Trust” blueprint, it acknowledged two staff joined Gaza planning calls and chats. It also denied backing population relocation.

Arab News approached the TBI for comment, but did not receive a response by the time of publication.

Nevertheless, its involvement has triggered additional concerns about the ethics of postwar reconstruction planning and the role of consulting firms in shaping policies with far-reaching humanitarian consequences.
 

 


The battle for talent: Ƶ’s high-stakes bet on human capital

The battle for talent: Ƶ’s high-stakes bet on human capital
Updated 12 July 2025

The battle for talent: Ƶ’s high-stakes bet on human capital

The battle for talent: Ƶ’s high-stakes bet on human capital
  • Kingdom’s rapidly expanding sectors are creating an unprecedented demand for highly skilled professionals

RIYADH: As Ƶ accelerates its transformation under Vision 2030, a critical question has emerged: Can the Kingdom build a homegrown tech workforce strong enough to power its digital ambitions?

From artificial intelligence and smart mobility to fintech and clean energy, the Kingdom’s rapidly expanding sectors are creating an unprecedented demand for highly skilled professionals. Yet despite billions in investments and major infrastructure rollouts, supply still lags behind demand.

This challenge, however, is far from ignored.

“We are proud to take human capital development to the next level,” said Minister of Human Resources and Social Development Ahmed Al-Rajhi, during the launch of the National Skills Platform in April 2025. “Technical expertise alone is not enough. Leadership, strategic thinking, and adaptability are equally important, and skilling and reskilling for the workforce is a national priority that all stakeholders should engage in.”

The AI-powered platform connects Saudi job seekers to customized learning pathways, marking a shift toward demand-driven education and training.

Despite billions in investments and major infrastructure rollouts, supply still lags behind demand. (SPA)

A national priority

Education Minister Yousef Al-Benyan, who also chairs the executive committee of the Human Capability Development Program, emphasized the broader purpose behind the Kingdom’s reforms.

“Vision 2030 is not just a roadmap for national transformation — it is a model for how investment in people can drive sustainable progress,” Al-Benyan wrote in an April op-ed for Arab News titled “Vision 2030: Elevating human capability in a changing world.”

Citing the World Economic Forum’s Future of Jobs Report 2025, he noted that while 170 million new jobs will emerge globally by 2030, another 92 million will be displaced. He warned that 44 percent of core skills are set to change within five years, with digital and AI literacy becoming as fundamental as reading and math.

“Without these,” he wrote, “individuals are unable to participate meaningfully in today’s digital economy.”

Yousef Al-Benyan, Saudi education minister. (Supplied)

Scaling up training and inclusion

This outlook is shaping some of Ƶ’s most ambitious workforce initiatives. Among them is the Waad National Training Campaign, launched in 2023 and supported by more than 70 organizations. The program surpassed 1 million training opportunities in its first phase and now targets 3 million by the end of 2025.

Waad’s Women’s Employment Track has been particularly successful, with a 92 percent retention rate in tech roles—contributing to a record rise in female participation across the digital economy.

Waad, Al-Rajhi noted, is an investment in “the promise of human potential.”

Meanwhile, the Future Skills Training Initiative, led by the Ministry of Communications and Information Technology since 2020, has provided training to hundreds of thousands of Saudis in areas like cybersecurity, data science, and cloud computing. Supported by the Digital Skills Framework and private-sector partnerships, it has grown steadily.

One such partnership — a 2023 collaboration with IBM — aimed to train 100,000 Saudis in AI and machine learning.

Ahmed Al-Rajhi, Saudi minister of human resources and social development. (Supplied)

Talent gaps persist

Despite this progress, a 2025 report by Nucamp and the ministry highlighted a 20 percent shortfall between tech job vacancies and qualified local talent. Critical roles such as AI engineers, cloud architects, and data analysts remain in short supply.

“Demand for AI and cloud experts far exceeds supply,” said Ahmed Helmy, managing director for SAP in the Middle East, in an April interview with Asharq Al-Awsat. The result: fierce competition among employers.

To meet short-term needs, Ƶ is tapping into international expertise. The Premium Residency Program, launched in 2021, allows skilled foreign professionals to live and work in the Kingdom without a local sponsor. By late 2023, more than 2,600 had taken advantage of the scheme.

In 2024, five new visa categories were introduced to attract investors, entrepreneurs, and tech specialists. These include provisions that exempt founders from Saudization quotas for their first three years—providing flexibility to scale teams while supporting local hiring in the long term.

“Such incentives allow skilled professionals to have a more stable life and make long-term investments in their careers in Ƶ,” said Raymond Khoury, partner at Arthur D. Little, in May.

Still, officials stress that international hiring is a stopgap — not a substitute.

“While attracting global talent is crucial, sustainable growth depends on balancing international expertise with local knowledge development,” said Mamdouh Al-Doubayan, MENA managing director at Globant.

To that end, foreign hires are increasingly being integrated not just as employees, but as mentors and trainers.

Startups adapt with remote models

In the private sector, startups are turning to remote hiring to bypass local talent shortages. A 2024 study by Wamda found that many Saudi companies are building distributed teams, sourcing tech talent from Egypt, Jordan, and other regional markets. This strategy shortens hiring cycles and enables around-the-clock operations.

The trend aligns with the Kingdom’s Telework Initiative, which certifies employers to offer remote roles to Saudis—especially women and those living outside major urban centers.

Competitive pressures from giga-projects

The hiring challenge became especially acute in 2023. That year, PwC’s Middle East Workforce Survey reported that 58 percent of Saudi firms struggled to fill key tech roles. A MAGNiTT report found that 65 percent of startup founders saw the shortage of senior tech talent as their top obstacle.

A concurrent survey by Flat6Labs noted that many startups were delaying product launches due to staffing shortages, losing talent to mega-projects offering 30 to 50 percent higher salaries.

“Engineers and product managers often defect to deep-pocketed giga-projects that offer salaries 30–50 percent above startup pay,” wrote venture adviser Aditya Ghosh in a November 2023 LinkedIn Pulse column.

Bridging the divide

Education leaders are working to close this gap. Khalid Al-Sabti, chairman of the Education and Training Evaluation Commission, said in a 2024 Arab News interview that Ƶ is aligning its curriculum with global benchmarks.

“We must ensure our graduates meet international standards to compete globally,” he said.

This includes revising curricula, emphasizing hands-on projects, and embedding industry into the classroom through partnership programs. The Talent Enrichment Program, for example, spans 160 countries and offers global certifications to Saudi learners.

Encouragingly, Ƶ’s position in the IMD World Talent Ranking improved in 2023. Companies such as STC, Aramco Digital, and Elm are now hiring directly from local boot camps and training centers — evidence that education and industry are beginning to align.

The road ahead

Ultimately, the success of Ƶ’s tech talent strategy will be measured not just by enrollments or credentials, but by how effectively new graduates are absorbed into the workforce.

If current reforms continue at scale, the Kingdom may not only satisfy its domestic tech demand — but emerge as a regional hub for digital talent.

As Al-Benyan wrote: “By investing in people, fostering global collaboration, and redefining the future of work, Ƶ is demonstrating that human capability is the ultimate driver of progress.”
 


Lebanon bets on Gulf tourists to rescue its collapsing economy

Lebanon bets on Gulf tourists to rescue its collapsing economy
Updated 12 July 2025

Lebanon bets on Gulf tourists to rescue its collapsing economy

Lebanon bets on Gulf tourists to rescue its collapsing economy
  • With the UAE and Kuwait lifting travel bans, high-end venues pin their hopes on a luxury tourism resurgence

RIYADH: Lebanon’s tourism sector is placing its hopes on international and Gulf visitors to help steer the country through a financial crisis that has gripped the nation since 2019.

As Beirut’s clubs and restaurants increasingly operate in US dollars, the city’s tourism and nightlife have emerged as fragile yet essential pillars of the economy, largely propped up by private investment.

The ongoing financial collapse — now in its sixth year — has created an $80 billion gap in the banking sector, with debt restructuring stalled amid persistent political gridlock.

Since 2019, the Lebanese pound has lost more than 90 percent of its value, while the country’s gross domestic product has contracted by nearly 40 percent.

The 2024 Hezbollah-Israel conflict further devastated the economy, inflicting widespread damage on tourist regions. In response, the World Bank approved a $250 million loan in June as part of a broader $1 billion recovery program, estimating the total cost of the conflict at $7.2 billion, with reconstruction needs reaching $11 billion.

A defiant party amid the ruins

In early June, fireworks lit up the sky above Beirut’s iconic St. Georges Hotel during a retro-themed event hosted by the Tourism Ministry, reviving memories of Lebanon’s golden age in the 1970s — a time when Gulf tourists filled its beaches, mountain resorts, and vibrant nightlife.

Today, that nostalgia is being reimagined for a new generation of affluent travelers. With the UAE and Kuwait lifting travel bans — and Ƶ possibly following — high-end venues are pinning their hopes on a luxury tourism resurgence.

But renewed tensions in the region have cast a shadow over those ambitions. 

Beirut’s tourism and nightlife have emerged as fragile yet essential pillars of the economy, largely propped up by private investment. (AFP)

Lebanon’s tourism sector has seen “some cancellations in hotels, (flight) tickets, and car rentals,” Laura Lahoud, Lebanon’s tourism minister, told Arab News in an interview, acknowledging the impact of regional tensions.

“We are surely affected by the current situation in the Middle East, same as all the region. But if Lebanon remains neutral and does not take sides — as the president and prime minister are insisting — we can save the season,” Lahoud added.

Her optimism hinges on a fragile ceasefire between Iran and Israel. “Hopefully, it will go back to normal,” she said, while emphasizing that festivals and events remain untouched, except for the Beiteddine Festival, where “performers are from the US.”

The dollar hustle 

While Lebanon’s currency has collapsed, poverty has tripled, and the banking sector remains frozen, a parallel economy is flourishing in Beirut’s upscale neighborhoods like Gemmayzeh and Mar Mikhael.

Security is part of the appeal. Army patrols have become more visible in tourist areas, and Hezbollah banners along the airport road have quietly given way to billboards promoting “A New Era for Lebanon.”

But the real driver is privatization. With the state largely incapacitated, private investors — mostly dealing in US dollars — are fueling a boom in luxury tourism, pouring money into beach clubs, rooftop lounges, and curated VIP experiences that operate outside the formal economy.

“The private sector has always been a main driver,” said Lahoud, defending the government’s role as a facilitator rather than a funder. “Our role is to guide, organize, and direct investment into new sectors, new regions, and new ideas.”

Laura Lahoud, Lebanon's minister of tourism. (Supplied)

Yet, some argue this model is unsustainable.

“The dollarized tourism economy has a negative impact on domestic tourism,” warned Jassem Ajaka, an economist and professor at the Lebanese University. 

“Prices become high for residents, especially if pricing is applied equally to tourists and locals. This is unsustainable because the dollar is not the country’s official currency,” he explained in an interview with Arab News.

Geopolitical gambles

The stakes could not be higher. Lebanon’s agricultural and industrial sectors lie in ruins.

Once accounting for 20 percent of GDP, tourism has emerged as the fastest route toward restoring ties with Gulf countries and reviving the economy.

President Joseph Aoun has made outreach to the Gulf a top priority, traveling to Ƶ, Qatar, and the UAE to present Lebanon as “open for business.”

Lahoud emphasized that rebuilding tourist confidence in Lebanon “is the main objective.” 

She outlined plans to achieve this through comprehensive government reforms, coordinated airport improvements, streamlined visa processes for GCC families, shorter checkpoint delays, and the promotion of year-round tourism across all sectors.

“Before some Gulf countries removed the travel ban, Arab tourists were limited to Egyptians, Iraqis, and Jordanians,” said Jean Abboud, president of the Association of Travel and Tourist Agents in Lebanon.

“Demands from Gulf countries were growing steadily, especially from the Emirates, Kuwait, and Qatar. But due to the current conflict between Iran and Israel, everything has changed,” he told Arab News.

The fallout is immediate. “We, as tour operators nowadays, avoid including the south in our programs due to the unexpected problems,” Abboud added.

Lahoud stated that the ministry is collaborating closely with all industry groups to create unique visitor experiences in Lebanon. She added they plan to develop long-term policies and digital tools to support both city and countryside activities, and encourage vital small and medium investments across all regions.

Risky bet

“Over the past couple of years, I’ve noticed a shift toward a younger crowd — but interestingly, they’re spending more,” says Marco Khadra, ambassador at Factory People, a Beirut-based group organizing many of the country’s major music festivals.

“There’s a clear appetite for nightlife, even among younger demographics,” Khadra told Arab News.

But security concerns loom large. “Some people, including international acts, have felt Beirut isn’t safe, and that affects bookings and attendance,” Khadra admitted, adding: “Perception plays a big role in this industry.”

German electronic music record label Keinmusik performing in one of the Factory People's clubs in Beirut in 2023. (Factory People photo)

For bartenders like Lynn Abi Ghanem, who left Beirut for the Gulf, the sustainability of this boom is questionable. “Not in the long run,” she said of the shift toward Gulf tourists. “Tourists come for a short time, but it’s the locals who keep bars running all year. Without them, things feel off and won’t hold up.”

The staffing crisis is another weak link. “There are a lot of talented workers who aren’t paid what they deserve,” Abi Ghanem added. “If things don’t change, many will keep leaving.”

A mirage of recovery? 

Hotels have reported occupancy rates of 80 percent ahead of the summer season, while flights are operating at near capacity with expatriates and Gulf tourists. Yet Lebanon’s recovery remains precarious.

“Even though tourism’s contribution to the gross domestic product increased after the crisis to about 30 percent, this was due to the economic contraction,” explained Ajaka.

“We cannot say the sector has recovered because recovery depends on political stability and investment inflows.”

For now, the party continues, sustained by Gulf investment and the relentless drive of Beirut’s nightlife entrepreneurs.

But as Ajjaka conceded: “The biggest enemy of tourism is any security obstacle.” And in a country where crisis is the only constant, the stakes have never been higher.