DELOITTE STRIVING TO ADD TO CULTURE OF TRANSPARENCY IN LEBANON

Lebanon 2017 | ECONOMY | VIP INTERVIEW

TBY talks to Joseph K. El-Fadl, Office Managing Partner of Deloitte & Touche Lebanon, on the importance of Lebanon to Deloitte, Lebanon's business environment, and the contribution the firm is making to transparency.

What is the importance of Lebanon within Deloitte's network?

Deloitte Lebanon is a member of the Deloitte network. Irrespective of the size of the Lebanese economy and market, strategically Lebanon is important for various socio-economic aspects within the wider Middle East region. The firm has great and strategic interest in the market and is well positioned to serve global and strategic leading domestic clients doing business in Lebanon and expanding in the Middle East and North Africa region. Deloitte Lebanon has experienced, over the years, a sustainable growth rate in terms of resources and managed revenues, and has continued enhancing quality and building its reputation by providing seamless and high-end professional services in most disciplines and to various economic sectors that are delivered to the market place in general and clients in particular. The firm currently enjoys a leading position in terms of reputation, size, and market recognition. During some critical periods of the country's recent history, Deloitte has been one of very few companies among those with multinational connections that continued serving the market without interruption. During that period many international firms opted to discontinue or reduce their operations, and for quite some time we remained one of very few firms with international connections serving in the market. We have continued serving our clients with the same degree of dedication and commitment. This strategy has paid off over the years and has no doubt helped to build market eminence with a strong presence and deep penetration within the business community. We continue to maintain, as a general rule, the same high level of loyalty and commitment to the market in general and our stakeholders in particular.

When doing business, how do you evaluate Lebanon compared to the region?

Throughout history and starting from the age of the Phoenicians, who invented the alphabet and concept of foreign trade, Lebanon has had a distinguished presence and recognition within its geography. For quite some time in modern history, it has been known as the Switzerland of the Middle East, but due to the geopolitical conflicts in the Levant region and periods of political and security instabilities, foreign investment has to some extent impacted business in or through Lebanon. Nevertheless, Beirut has always had something different and unique to offer; people, freedom, human capital, initiatives, and so on. For many years the country was a center of attraction to the missionaries who contributed to higher education. I would cite for example the American University of Beirut, which just celebrated its 150th anniversary, and the Jesuits' educational presence goes back 140 years. Lebanon has become a key source for talent and skills deployed to the region, thus becoming a critical source of foreign income that flows to the country in the absence of natural resources. Education and cultural diversity have given the country a strong competitive edge and advantage to deploy talents to the Gulf region and Africa, and many Lebanese people have reached leadership positions and achieved remarkable success. For all these reasons, Lebanon will continue to play the key role of exporting talent and skills to the region and beyond. As Lebanese people, we always have high expectations for greater opportunities and a better future, which explains the massive emigration to the West, to places such as Europe, Canada, South America, and the US, for example. As a general rule, the Lebanese diaspora, especially the last two generations, continue to maintain connections with the country, supporting families and relatives, which has been a great help to social stability and helped to a great extent the sustainability of the current business model of the country. Because of this high and non-disputable level of commitment, I personally believe that Lebanon cannot fail.

What are the most common concerns for foreign companies that are keen to enter the Lebanese market?

Lebanon has for many years been a point of attraction for many foreign companies. Prior to the war, which ended in early 1990s, most foreign companies' first priority was to establish a presence in Beirut, either for offshoring or to engage in domestic operations. This attention to Beirut may have diminished over the years to the benefit of other locations, due to political conflict and security instability in the country and the region. However, many foreign institutions still look at Lebanon as a place to be because of the availability of talent and resources, cultural diversity, and the foreign languages mastered by its community. Many of the foreign institutions that used to operate out of Beirut have re-located and have chosen Dubai as the place to have their regional offices; I am a strong believer that Lebanon has the ingredients and potential to attract many of these companies back. What investors need is sustainable security and reliable services in the public domain, which are progressively improving. Lebanon, and Beirut in particular, has the foundations to be attractive to foreign corporations and businesses, starting with its proximity to Europe, free trade, and a strong regulated banking system that imposes adherence and compliance on international regulations, climate, a good private education system at a reasonable and affordable cost, the availability of affordable human capital, an advanced healthcare industry, and private initiatives in various areas of business. All that it needs is to restore trust in the public service and infrastructure.

How is Deloitte contributing to transparency at all levels of the economy?

Promoting transparency and anti-corruption, which is a goal and should be a strategic objective for the economy to move forward, requires putting in place and formalizing the necessary and pre-requisite policies and procedures with the right authority matrix, empowering people with the right tools to measure performance and accountability, as well as applying discipline in implementation. This triggers real interaction and dialog between the private sector and the administration to restore trust, and reach a situation where the public sees concrete benefits in the services they are paying for. We as a firm contribute to promoting best practices by setting an example through rigorous procedures of ethical standards and corporate values. These factors, which have to be on the government agenda, are instrumental to fight corruption and enhance transparency over time. In today's world, upgrading a country's rating for transparency and anti-corruption and promoting business ethics are preconditions for attracting investments and foreign capital. From our side we continue promoting transparency in financial reporting, credibility, and integrity in business conduct, and these all work together in harmony as they are key for financial and social stability. Transparency and Anti-corruption form a culture that starts by introducing in the curriculum educational material on civil rights and duties, enforcing discipline in the market, and formulating tools for promoting transparency and fighting corruption. We stand strong in promoting corporate values based on best practices and standing against any activities like engaging in anti-trust and/or unethical behaviors in interactions either with the public sector or the community at large. When everybody takes a strong stance against corruption this enhances transparency in favor of diminishing illegalities. The public sector is perceived and expected to act as a preferred service provider to the community and be assessed accordingly based on performance. This goes through a journey for transparency in business conduct. It also goes along with commitment and a strong message from the top of the hierarchy alongside with the restructuring, reform, and modernization of the administration to make it more efficient and effective, which is the goal set already by the country's leadership.