THE CONSENSUS MAKER

Lebanon 2012 | DIPLOMACY | INTERVIEW

TBY talks to Najib A. Mikati, Prime Minister of Lebanon, on his economic policies, the role of consensus building, and his vision for Lebanon's geopolitical strategy.

Najib A. Mikati
BIOGRAPHY
Najib A. Mikati is a Member of the Lebanese Parliament representing the district of Tripoli. He began his political career in 1998 as Minister of Public Works and Transport, and served until 2004. In 2000, he was elected as the representative for Tripoli. In 2005, he became Prime Minister of Lebanon for the first time. He is the co-founder of M1 Group, a family-owned holding with interests in telecoms, real estate, aircraft financing, fashion, and energy. He is active in various think tanks, such as the Harris School of Public Policy and the International Crisis Group. He is also a member of the Board of Trustees at the American University of Beirut, and founder of the Middle East Prospects Forum and Al Wassatia Forum.

How has your diverse experience in both the public and private sectors shaped your current vision for Lebanon?

If you look back to almost a year ago, the situation in Lebanon was somehow critical; the political tension among March 14 and March 8 supporters was getting to a point that could have jeopardized stability in the country. I was convinced that Lebanon needed a different way, a centrist way, which is the only way Lebanon can regain its stability in order to put it back on course to prosperity. The business world develops in you the entrepreneurial spirit, which trains you to dare and venture into untested territories. The political arena is more of a consensual playing field where you need to convince first before achieving your goals. Combining the entrepreneurial spirit with the “need-to-convince" attitude is quite challenging for me. Running the country requires a driving force, a catalyst, which is what the private sector trains you for. However, it also needs patience and convincing techniques.

You have declared that your aim is national unity. What efforts is your administration taking to build consensus within Lebanon's partisan political landscape?

I've always said that Lebanon is not a two-lane road where only the issues of the Special Tribunal for Lebanon (STL) and Hezbollah's arms are running. These are issues on which we don't have consensus for the time being. Lebanon is a 10- to 15-lane highway where we can keep on the left side both the STL and arms issues rolling; however, on the other lanes there are the issues where there could be consensus, such as electricity, health care, education, social security, and the like, and this is what I plan to tackle first.

What key targets are you seeking to meet so as to improve Lebanon's electricity generation capacity?

In Lebanon we currently have an average supply of 1,500 MW with an average demand of 2,100 MW, while peak demand in summer reaches 2,500 MW. It shouldn't be considered an achievement if we install additional capacity to fill the gap. This should have been done many years ago. My objective is to involve the private sector in order to be able to supply Lebanon's citizens with power 24/7 within three years.

“I was convinced that Lebanon needed a different way, a centrist way."

This year will see the rollout of a 3.5G network in Lebanon. In your view, what will be the economic impact of this move?

The telecoms sector has implications on many other sectors in the economy. Upgrading our telecoms networks to fit the needs of society is not a luxury, but rather a necessity. Again, this is a sector in which we were pioneers in the 1990s, and became one of the laggards in the 21st century. I'll do my utmost to bring Lebanon back up to the highest standards as this sector helps other sectors improve their contributions to GDP.

What are your administrative and legislative goals for improving the ease of doing business in Lebanon?

The Ministry of Economy along with the economic team at the Prime Minister's Office are closely working on this issue, which has been labeled as a priority. All the red tape, costs, and time wasted in order to run a company in Lebanon has deterred many young entrepreneurs from establishing their start-ups and forced some multinationals to reconsider establishing their regional base in Lebanon. The good thing is that there is an awareness among all ministers and politicians about the need to improve on this matter.

What sectors and industries do you feel are the most promising for foreign investment?

Lebanon has always enjoyed a free economy, and investors are free to invest in all sectors. However, some industries seem to attract more than others, particularly those sectors with high value-added. The reason for this being the cost of production as well as relatively high (skilled) labor costs, which force us to compete with European products rather than Chinese products. This is witnessed in the fashion, jewelry, software, and banking sectors, which require skilled and specialized labor.

What steps do you feel should be taken to improve Lebanon's debt-to-GDP ratio?

We need to grow our economy. The civil war as well as the “from time to time" political instability has deterred Lebanon from growing its economy to where it should be. A study was done showing that had we not had the war in Lebanon, our economy would have been three times what it is today, which would have reduced our debt-to-GDP ratio down to almost 55%. We need to focus on growing the economy by encouraging investors to create jobs, which would reduce immigration and keep more Lebanese at home. This, by default, would help grow the economy. One other issue we need to focus on is running our budget in a more efficient way by containing costs more efficiently and allocating a larger part of our budget to capital expenditure, which would also benefit economic growth.

What role does the country's finance sector play in ensuring resiliency in the real economy? What is Lebanon's potential as a global financial center?

The banking sector has enjoyed many years of continuous growth. Lebanese bankers are known to be well seasoned and professional. This is one of the reasons that has kept remittances as well as non-residents transferring money into the country, which helps in growing the economy. With its banking secrecy, and the availability of well-trained bankers working with the best institutions in the world, Lebanon can hope to become the asset management center for the region. For example, just as London is a financial center and Geneva an asset management center, the region could have Dubai as its financial center and Beirut as the asset management center.

How do you envision Lebanon's geopolitical role in the region and beyond?

In terms of geopolitics, I've always believed that Lebanon should isolate itself from what is going on in the region. I'll do my best to build some sort of a Chinese wall between Lebanon and the rest of the region, meaning that we don't want to interfere in anybody's internal affairs so that no one interferes in ours. Lebanese geopolitics should be based on a zero conflict policy not only with our neighbors (such as the Turkish policy), but the whole world. Lebanon can't afford to jeopardize its relationship with any country in the world. Lebanon will always respect all international resolutions because we can't be selective about which resolution to abide by and which one to reject. In sum, our policy is: zero conflict with everybody, not only our neighbors.