BREAKTHROUGH
TBY talks to Dr. Makram Sader, Secretary General of the Association of Banks in Lebanon, on regulation, the dollarization of the economy, and keeping the sector competitive.

BIOGRAPHY
Dr. Makram Sader has been the Secretary General of the Association of Banks in Lebanon (ABL) since 1991, where he is actively involved in the reorganization of the banking industry, with an emphasis on regulations, along with highly recognized standards. He also acts as Chairman of Lebanon’s Banking Commission (ICC), a Board Member of the Caisse Nationale de la Sécurité Sociale (CNSS) in Lebanon, and an effective member of the Lebanese Economic and Social Council. He graduated from the University of Grenoble in France in 1979 with a PhD in economics, and began his career teaching International Economics at the Lebanese University, carrying out at the same time several studies as a full time researcher at CERMOC. Between 1985 and 1991, he was nominated as the Director of Research & Studies at the Union of Arab Banks (UAB) and played a key role in inter-Arab cooperation on banking issues. Over 1998-1999, he contributed significantly to the elaboration of the Lebanese government’s five-year Financial Reform Program and headed up the Banking Commission within the Syro-Lebanese Businessmen Council.The Lebanese parliament recently passed four financial bills to comply with global financial standards. How will these laws enhance the regulatory framework for the banking sector?
The bills approved by the Lebanese parliament in 2015 are fundamental, since they uphold the credibility of the Lebanese banking sector and send positive signals for investors within international financial circles. This comprehensive package includes laws regulating anti-money laundering, the declaration of carried cash at the border, the exchange of tax information, and the adherence to UN convention for the suppression of the financing of terrorism. The ABL was an advocate of the importance of these laws to be passed since we needed to strengthen our existing legal framework and comply with anti-laundering international rules. Needless to say, these laws also protect the work and the practice of Lebanese banks at this level vis-á-vis correspondent banks and the international community in general.
One of the main assets of the Lebanese economy is the high level of dollarization it presents. How does this aid the resilience of the banking sector?
The level of dollarization in the Lebanese economy has many advantages and disadvantages depending on the sector. The existing dual currency system largely supports expansion in financial intermediation and contributes to a deeper financial system. Dollarization in Lebanon contributes also to financial stability and offers an insurance policy against large shocks. The ease with which LBP-denominated accounts can be converted into dollar-denominated accounts tends to limit potential withdrawals from the system and financial outflows in upsetting situations. Therefore, high dollarization in Lebanon can be viewed as one of the elements of the resilience of the banking sector.
The banking sector has heavily promoted entrepreneurial projects in Lebanon. What are the main contributions from commercial banks to start-ups and SMEs?
The major contribution from banks to the promotion and development of SMEs is the provision of loan facilities below the market costs of tradition funds, since they grant different forms of subsidized loans to these entities in close relationship to loan guarantors in the country such as Kafalat. These loans also benefit from the deduction in reserve requirements and by stimulating packages of liquidity provided by Banque du Liban at very low rates. Today, the outstanding amount of these loans exceeds USD5.5 billion. Banks also support the growth of the knowledge economy, as they contribute within the limits of 4% of their capital to finance start-up projects, business incubators, and accelerators. The interest from the banking sector in these initiatives has moved them to invest around USD250 million in startup companies and venture capitalists so far, and my guess is that this trend will continue to rise, as the knowledge economy has positioned itself as one of the most promising sectors for Lebanon.
The Lebanese banking sector is highly competitive. How does the ABL work to make things even for smaller players with narrower market shares?
The ABL has always been keen on defending the interests of all its member banks, whether they are Lebanese or non-Lebanese, and small, medium, or large in size. We promote their activities at the domestic and international levels to secure their financing and open new spaces for opportunities to them. We also play an active role in coordinating banks' efforts on common interest issues. ABL continues as well to raise awareness of developments in regulatory compliance and to support small and medium banks through different means in configuring their compliance frameworks and implementing the necessary rules and processes. For example, we develop and distribute a set of generic policies and procedures manuals on business ethics and consumer protection, anti-bribery and corruption, international sanctions, and AML/CFT and FATCA to all our member banks. ABL also organizes different training activities related to various aspects of banks' activities, from battling money laundering to human capital training, and through these measures we guarantee a competitive and fair environment for all our member banks regardless of their size or capabilities.

TABLE OF CONTENTS
Focus: Lebanese-French Relations
Let’s be Franc
Lebanon shares a close relationship with its former colonizer, both in terms of economic relations and cultural identity among Lebanese. In spite of hardships like the presidential power vacuum and Syrian war next door, the bond is only getting stronger.
read articleFocus: Tripoli Economic Free Zone
The Tripoli Transformation
The Tripoli Special Economic Zone (TSEZ) is one of most ambitious projects in Lebanon at the moment. With an initial cost of USD27 million, it is meant to provide an alternative to the heavily centralized economic activity in Beirut, a new gateway for investments and trade to settle in northern Lebanon, and will transform the image of a long-neglected region.
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Dr. Freddie Baz, Vice Chairman & Group Strategy Director, Bank Audi
TBY talks to Dr. Freddie Baz, Vice Chairman & Group Strategy Director of Bank Audi, on the bank's increase in profits, dealing with currency devaluation, and working to turn the economy into an export-driven one.
read articleReview: Insurance
Life is a Rollercoaster
Unlike many emerging markets, Lebanon enjoys a relatively high insurance penetration rate and strong life segment, buoyed by compulsory lines and bancassurance. Competition remains fierce, however, and reform aimed at encouraging consolidation looks far off.
read articleInterview
Max R. Zaccar, Chairman of Commercial Insurance & President of the Association, Insurance Companies
TBY talks to Max R. Zaccar, Chairman of Commercial Insurance & President of the Association of Insurance Companies, on the resilience of the sector, increasing the already-high penetration rates in the country, and remaining one of the strongest insurance companies in the region.
read articleInterview
HE Arthur Nazarian, Minister, Energy and Water Resources
TBY talks to HE Arthur Nazarian, Minister of Energy and Water Resources, on the potential offshoots from oil and gas explorations, the country's National Energy Efficiency Action Plan, and attempts to increase renewable energy consumption.
read articleInterview
Wissam Zahabi, Chairman, Board of the Lebanese Petroleum Administration (LPA),
TBY talks to Wissam Zahabi, Chairman of the Board of the Lebanese Petroleum Administration (LPA), on making the investment climate attractive for foreign companies and becoming self-sufficient in energy.
read articleFocus: Sovereign Wealth Funds
Gas Pipe Dreams
Despite excitement over exploration of Lebanon's hydrocarbons, the creation of a sovereign wealth fund, which was included in legislation, has yet to take place. The country faces several obstacles in its path to creating and properly managing a fund.
read articleInterview
Pierre El Khoury, General Director, Lebanese Center for Energy Conservation (LCEC)
TBY talks to Pierre El Khoury, General Director of the Lebanese Center for Energy Conservation (LCEC), on the development of energy efficiency in Lebanon, awareness of energy conservation, and the country's 2020 renewable energy goals.
read articleInterview
Dr. Fady Gemayel, President, Association of Lebanese Industrialists (ALI)
TBY talks to Dr. Fady Gemayel, President of the Association of Lebanese Industrialists (ALI), on the group's work to promote industrialists, new developments in terms of industrial cities, and the future of industry in the country.
read articleFocus: Industrial Cities
Industrial Solution
Domestic and regional events have stifled Lebanon in building a strong national industry to protect and sustain its economy. Four proposed industrial zones throughout the country may provide it with the economic backbone it so desperately needs.
read articleInterview
Marianne Hoayek, Director of the Executive Office, Banque du Liban
TBY talks to Marianne Hoayek, Director of the Executive Office of Banque du Liban, on the roots of the Circular 331 concept, bridging funding gaps throughout the startup lifecycle, and the country's growing knowledge economy.
read articleRoundtable
Thinking It Through
On June 12, TBY and the American-Lebanese Chamber of Commerce (AmCham) organized a roundtable titled “Startup ecosystem sustainability: fostering cooperation to drive entrepreneurship." The participants discussed the impact of Circular 331, an initiative by Bank du Liban, the Lebanese central bank, to inject a potential of USD400 million into the local enterprise market and guarantee 75% of banks' investments in startups and startup support.
read articleFocus: Infrastructure for the startup ecosystem
The New Star
Startups are ubiquitous in Lebanon despite the difficulty of starting a business and the lack of services available to new businesses. However, a number of actors, both public and private, are innovating the environment and allowing startups to fulfill a greater role in the country's economy.
read articleFocus: Maritime Exports Bridge
Bridging The Gap
The conflict in Syria has wrought serious damage on the Lebanese economy, effectively closing off the country's trade routes through Syria. However, a new program geared at balancing the price disparities between land and sea transit is poised to help Lebanese industries.
read articleFocus: Real Estate
A Stimulus For The Rest Of Us
The real estate market in Lebanon is nothing like it used to be. The sector has slowed considerably, and demand has shifted from the traditional center, Beirut. However, stimulus packages from the central bank over the years have proven beneficial for all parties involved.
read articleInterview
Armand Pahrés, President, Lebanese Pharmaceutical Importers Association (LPIA)
TBY talks to Armand Pahrés, President of the Lebanese Pharmaceutical Importers Association (LPIA), on the development of legislation in the sector, boosting further innovation, and opportunities for Lebanon to become more self-sufficient in pharmaceuticals.
read articleFocus: Incentives for pharmaceuticals in Lebanon
Pharma Land
Lebanon has always been the region's leader in all things health related. Its pharmaceutical industry is no exception, and the country's incentives for international pharma companies to operate, manufacture, and distribute in Lebanon are only getting stronger.
read articleInterview
HE Elias Bou Saab, Minister, Education and Higher Education
TBY talks to HE Elias Bou Saab, Minister of Education and Higher Education, on the ministry's initiatives to improve the education system, ensuring access to education for Syrian refugee children, and reversing the brain drain in the country.
read articleInterview
Mohamed Harajli, Provost, American University of Beirut (AUB)
TBY talks to Mohamed Harajli, Provost of the American University of Beirut (AUB), on his upcoming plans for the university, the key role played by the AUB alumni, and fostering an entrepreneurial spirit among students.
read articleFocus: Programs to school Syrian refugee children
High Marks
Proportional to its population, Lebanon has taken in significantly more Syrian refugees than any other country. With the country now facing the problem of placing the tens of thousands of Syrian children in school, international donors and local and foreign organizations are making educational support a priority.
read articleInterview
Joseph G. Jabbra, President, Lebanese American University (LAU)
TBY talks to Joseph G. Jabbra, President of the Lebanese American University (LAU), on embracing technology at the university, the challenges of Lebanon's brain drain, and the importance of having international links with other institutions.
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