BRANCHING OUT

Lebanon 2015 | DIPLOMACY | FOCUS: ECONOMIC DIPLOMACY

Until 2014, economic diplomacy was a largely neglected concept in Lebanon, yet things have changed with the appointment of the new government in February 2014.

Gebran Bassil, Lebanon's Minister of Foreign Affairs and Alain Hakim, Lebanon's Minister of Economy and Trade have made economic diplomacy one of their focus themes, with emphasis on promoting investments in the emerging oil and gas sector, as well as the booming franchise industry. Lebanon's modest-sized economy and industrial sector may explain why Lebanon never fully developed the concept of economic diplomacy. A country's embassies and consulates should by definition be a vital element in the promotion of economic and commercial attractiveness, but Lebanese representations abroad rarely engaged in promoting bilateral trade and investment opportunities. A recent study conducted by the Middle East Strategic Perspectives, a Beirut-based political risk consultancy, showed that Lebanese representations abroad did not have a clear vision nor a pre-defined strategy of how to promote Lebanon as an investment destination. Recently discovered deposits of oil and gas off the Lebanese coast have provided a great opportunity for country's officials to reevaluate their policies and the responsibilities of their diplomatic representations abroad. It is now important that Lebanese embassies and consulates engage with business communities and local authorities around the world to strengthen the cooperation and promote investment in Lebanon's economy.

The energy sector is indeed promising but at the moment it is the franchise sector that stimulates growth and investment, and creates considerable employment opportunities in Lebanon. According to the Lebanese Franchise Association (LFA), franchising companies are estimated to constitute around 6% of total companies operating in Lebanon. The industry contributes close to $1.5 billion, which represents 4% of country's GDP. The Lebanese franchise sector is an important vehicle towards economic modernity and the embodiment of the eminently exportable “Lebanese way of life," which has already earned a broad global appeal. Many Lebanese franchisers not only have achieved a remarkable growth in Lebanon but have also succeeded in branching out to many countries around the world. And while some of the country's economic sectors struggle to survive the harsh economic conditions, Lebanon's franchise industry remains resilient and continues to grow

BEIRUT INTERNATIONAL FRANCHISE FORUM & EXHIBITION (BIFEX)

In order to further promote the industry, LFA organizes BIFEX on a yearly basis. Since its first edition in 2010, BIFEX has served as a major platform for franchisors and franchisees to develop the industry on a regional and international level. It was during BIFEX 2014, that Minister Bassil called on Lebanon's ambassadors to take a more active role in promoting Lebanon's economic interests abroad, while Angelina Eichhorst, the European Union ambassador to Lebanon implored the local government to speed up reforms necessary for Lebanon's accession to the WTO (World Trade Organisation). “Please, Lebanon, get yourself into the WTO," Eichhorst told the BIFEX's audience.

Minister Bassil also called on the government, including his ministry, to enact reforms to further enhance Lebanon's economic diplomacy. “It is very important to send periodical economic reports between the central administration and delegations abroad while generalizing these reports on the relevant authorities and economic institutions," he said. “This means that the responsibility of the Foreign Ministry is to send such reports to Lebanese expatriates and to tell them what is going on around the world. It is also the responsibility of any head of delegation in any place in the world to send economic reports from which Lebanon could benefit." Minister Bassil highlighted that the country's diplomats should be well informed about Lebanon's economy in order to approach investors in host countries. He also emphasized on the importance of the remittances for the Lebanese economy. “The size of the Lebanese diaspora worldwide is large and immense. The revenues of migrants are estimated at $50 billion per year. Their remittances account for $8 billion annually, which is equivalent to 20% of the GDP," he said, adding that “This makes the Lebanese diaspora worldwide a key player in economic diplomacy in terms of investments and consumption."