Lebanese Ministry of Information
Economy Minister Raed Khoury called Tuesday for the drafting of a clear and comprehensive economic plan to be pursued by future successive governments. “We call upon the government, the Parliament and the private sector to draft a clear economic strategy which should be implemented by all future successive governments,” he told an audience at the Lebanese SME Forum organized at BIEL by the Economy Ministry in collaboration with the Central Bank.
The minister, who was talking on behalf of President Michel Aoun, said the main challenge is to introduce an economic mentality in the political system based on collaborative teamwork and the respect of deadlines for completing all projects included in the economic strategy.
“The very big challenge also is to separate economy from politics and to be open to new innovative economic ideas in addition to being brave enough to acquire the needed skills from countries that succeeded in registering high growth rates in their economies,” he said.
Khoury said that laws must not be drafted to be kept in the drawers of the parliamentary committees and the Cabinet must not waste two third of their time and efforts on political decisions.
Khoury praised the approval of the 2017 budget saying that it was a great achievement but it still does not reflect the ambitions of the government. “The year 2018 should be part of a broader economic plan in a bid to succeed in registering growth and improving the revenues of the government without adding any new taxes,” he said.
The minister said that SMEs are key to the Lebanese economy since they provide a great number of job opportunities. “This is why my ministry launched at the beginning of this year a road map for SMEs which includes initiatives that have been implemented and others that will be achieved soon.”
Among the measures listed in the road map, we called for accelerating the approval of a set of legislations such as trade law, bankruptcy law, electronic trade and judiciary intermediary and partnership between the public and private sectors.
“We are also working on signing a [memorandum of understanding] with the Lebanese Customs to facilitate customs procedures,” he said.
The strategy also encourages the adoption of training sessions for SMEs to make sure that the local production is compatible with international standards which will help increase the competitiveness of Lebanese products.
Khoury cited several other measures including an agreement with the World Bank to develop a program aimed at developing the agricultural and industrial sectors in order to create job opportunities in rural areas.
For his part Industry Minister Hussein Hajj Hasan said that Lebanon’s industry sector will die if the government does not take urgent measures to stop the dumping of foreign products by neighboring countries. “I am calling for saving our industry sector and not for a trade war with other countries,” he said, adding that Lebanon cannot keep its market open to imports while its exports face rigid restrictions.
Hajj Hasan, who spoke during a session within the framework of the conference, said that for SMEs to survive, it is very important to work on the country’s infrastructure by providing 24 hours electricity, proper roads and telecommunications.
But he added that these initiatives are not enough if the cost of production does not drop remarkably. “It is not enough to improve our infrastructure. We should work on exporting our products by increasing our competitive advantage.”
Hajj Hasan said that most of the Lebanese industries are suffering from unfair competition due to the flooding of foreign products in the local market.
He called for reconsidering international free trade agreements in a manner to serve the local economy. “There is no free trade in this world. I never believed in this concept and all big countries are working according to their interests,” he said.
Hajj Hasan also cited Iraq as an example of countries that have lately imposed fees on imports to protect its local production. “Iraq, for instance, withdrew its membership from the Arab Free Trade Agreement while imposing 40 percent of fees on its imports,” Hajj Hasan said.
He also emphasized the need to increase Lebanon’s exports to Europe which stand at only $300 million. “We are going to Europe soon to find a solution to this issue,” he said.
Likewise, Fadi Gemayel, head of the Association of Lebanese Industrialists, called upon the government to stop the dumping of foreign products in the local market. “We want the government to stop the chaotic import of products in addition to providing us with a fair cost of production to be able to compete with other markets,” he said.
Gemayel said that Lebanese SMEs proved their capability to face all kinds of difficulties in the past years and to cope with changes taking place in the country. “SMEs should be the engine of the economy. We should be proud of this sector and its sustainability and we hope to be able to give it the chance to develop and grow further,” he said.
Gemayel praised the economic diplomacy exerted by Foreign Affairs Minister Gebran Bassil which enabled Lebanese industrialists to reach expatriates all over the world. “We are thankful for the economic policy pursued by our foreign minister that gives us the chance to benefit from marketing our products to 14 million Lebanese spread all over the world,” he said.
Yasmina al-Khoury, head of Business Environment and Innovation at the prime minister’s office, reiterated Gemayel’s remarks by saying that the Lebanese SMEs proved to be resilient to constant challenges with Lebanon ranking second in the Arab world in terms of investments in tech startups.
“In 2013, Lebanon had only 11 investments at $7 million but it succeeded in increasing these investments to 37 at a value of $56 million,” she said.
Khoury noted that Lebanon has come a long way in developing its entrepreneurial ecosystem. “Lebanon has all the right ingredients at its disposal: highly educated and ambitious entrepreneurs, an open economy, unparalleled financial expertise with a strong liquid banking sector and a successful and loyal diaspora,” he said.
For Energy Minister Cesar Abi Khalil, one of the main challenges facing SMEs in Lebanon is the high cost of energy which impacts their competitiveness in the region.
Abi Khalil said that the drop in the cost of electricity would be solved by adopting the electricity plan which aims at producing two thirds of electricity by using gas. “We will be importing gas using floating storage regasification units which will be placed close to power plants and our factories will, in turn, transform LNG back to its gas form. This will save around 40 percent from the cost of producing electricity noting that natural gas is not only less expensive but it causes 27 times less pollution,” he added.
Abi Khalil said that the ministry will sign the contract for importing natural gas within a few months only.
For his part, Badri Daher, director-general of the Lebanese Customs, said that the agency he presides over has taken a series of measures to facilitate and accelerate import and export activities.
He added that the Lebanese Customs are currently in the process of installing a new call center that will reply to all questions and enquiries.
