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.
In 2008, a draft law to create a special economic zone in Tripoli, Lebanon's second largest and most populous city, was passed after three stagnant years in parliament. The move implied significant consequences as historically the north of Lebanon has been the most deprived area in the country with the highest rates of poverty and the lowest rates of development and employment. According to the United Nations Development Program (UNDP), the north of Lebanon accounts for 46% of the total population living in extreme poverty. Its disparities with other regions are notorious, amounting to twice the poverty rate of the southern region and 19 times that of Beirut.
The idea to create a new special economic zone in northern Lebanon was not only a strategy to diversify the country's trade poles but also to bring prosperity to the most economically stressed part of the country. After a comprehensive feasibility plan that involved an investment of USD1.5 billion from USAID, the adjacent zone of the Port of Tripoli was determined to be the best place to set what would become a 50ha site for the promotion of investment and trade in a thus far underexplored area of the country.
The objective of the TSEZ is straightforward: to provide a streamlined and transparent business environment with state-of-the-art infrastructure services and qualified human capacities to bolster SME capabilities and attract foreign and local investors to the region. The TSEZ also promises to offer 100% foreign ownership of companies, up to 50% of foreign labor, and the possibility of combining investment incentives of both the TSEZ and the Investment Development Authority of Lebanon (IDAL).
The TSEZ will also be near the planned railroad network that will link Tripoli with southern Syria. One of the major bets of Tripoli's business community is eventual reconstruction in Syria and the opportunities it will bring for Tripoli to become the epicenter of that process, since the city is just 22km away from Lebanon's troubled neighbor. As the TSEZ President told TBY, “The international community is preparing for the post-conflict period in Syria, and Tripoli is the closet city to the border, so we want to make the TSEZ an incubator for the reconstruction process.”
Most importantly, the TSEZ has been armed with the most lucrative tax incentives for a project of its kind in Lebanon's history: a 100% customs exemption on imported raw materials; duty-free exports on finished goods; duty-free imports of construction materials, equipment, machinery, and spare parts; 100% exemption on VAT and excise tax for goods and services; 100% exemption on corporate profit tax when the capital is higher than USD300,000; 100% exemption on withheld tax on salaries for employees and on social security contributions; 100% exemption on building permit fees and built property tax; and 100% exemption on shares and bonds issued by companies established within the TSEZ.
Perhaps the greatest asset of the TSEZ is the area it will share with the Port of Tripoli, which will drive the region's economic future. With a length of 600m and a 15.5m-deep quay, the Port of Tripoli is the second-largest port in Lebanon with a capacity of 750,000 TEUs. In the past year, the port witnessed a more than 300% increase in activities, going from 79,000 tons in January 2015 to over 245,000 in January 2016. On top of that, UAE-based company Gulftainer was recently awarded a concession to operate a new container terminal to handle 400,000 containers by the end of 2016 and 800,000 by the time the project meets its deadline in two years.
Due for completion in mid-2017, there is little doubt the expectations raised by this project will take some time to come to fruition. What is not in doubt is the extent to which this project will improve trade capacities for northern Lebanon and put Tripoli back on the map.
THE TRIPOLI TRANSFORMATION
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.
read articleInterview
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.
read article