HAIL TO THE HARD AND NIMBLE

Lebanon 2017 | ECONOMY | INTERVIEW

TBY talks to Dr. Fouad Zmokhol, President of the Association of Lebanese Business People in the World (RDCL World), on the resilience of Lebanese entrepreneurship and the importance of small and medium-sized businesses for meeting the challenges of the future.

Dr. Fouad Zmokhol
BIOGRAPHY
Dr. Fouad Zmokhol holds a doctorate in business administration from New Port University (US). In 2017, he founded and now chairs the RDCL World. As CEO and co-owner of the Zimco Group, a holding with a publishing house, leather factory, and advertising agency, Zmokhol continues to share his entrepreneurial wisdom as Professor of Managerial Strategies and Entrepreneurship at Saint Joseph University (USJ) and the Lebanese American University (LAU). He also sits on the boards of several prominent organizations.

What is your main mission, and how would you evaluate your progress in the past 30 years?

We are proud to be an elite group, and new members must firstly receive an invitation from two existing members and be subject to a vote requiring a two-thirds majority of the board before they can join. Additionally, our organization is totally apolitical; if any member becomes a minister or political representative, their membership is temporarily frozen. This helps us maintain complete independence. Many of our members become active in the political realm, because we believe it is important to have the Lebanese private sector play a key role in the direction of the country. Economically, Lebanon has survived several episodes of instability, essentially thanks to its private sector. Our major objective is to bring different business people together at the same table. We participate, in one way or another, in almost all major economic decisions in Lebanon.

How are you promoting greater cooperation between the public and private sectors to encourage more stable socioeconomic development?

Over the last two years, we have presented five laws. As a lobby, we are able to pass several types of economic laws. Whilst general public-private partnership (PPP) laws are difficult to pass, highly technical economic laws are much easier to gather support for. As a matter of fact, many members of parliament frequently ask for our input. In Lebanon, business-lobbying groups can present laws on condition they are signed by 10 MPs. We, however, usually gather up to 50 signatures on the laws we present. Politicians understand that we have no political agenda; rather we are solely focused on business. The points of strength that have fueled the success of Lebanese companies in the last 30 years have dramatically shifted, and a change of mentality is now necessary to survive. Most of the successful Lebanese companies were developed and grew in times of war, which means they are resilient and flexible. These companies now simply need to adjust to the new environment.

What will be the economic impact of having a new president?

The 29-month presidential vacuum halted the economic cycle of the country, leading to a decrease in foreign investments by 50%, from USD4.85 billion in 2010 to USD2.4 billion in 2016. Thus, the long-awaited political agreement was a tremendous positive shot in the arm for the economy and the country as a whole. We have been paying a high price for regional tensions over the last five years. It is the first time since WWI that so many armed conflicts are simultaneously raging in the region. We should not forget that our economy is based on the region's growth.

What are the main attractions and challenges for investors?

Lebanon's sovereign risk has been quite stable over the last 30 years. In Lebanon, we have an acceptable judicial system that ensures the protection of investors' rights. Furthermore, we are working to increase the return on investment. Currently, ROI in the country is only 5-7%, which is alarmingly low. Our major objective is to reduce sovereign risk and collaborate with different companies to boost ROI. Lebanon is a hub for the region, hence multinationals with regional ambitions operate out of Beirut. We are focused on attracting international companies interested in relocating here that will play a major role in rebuilding Syria, which is poised to take place out of Lebanon. Naturally, we will not rebuild Syria all by ourselves, but will play a major role in facilitating its reconstruction.

What are some of RDCL World's main goals and priorities for the year ahead?

First, we are looking to close 2017 with substantial growth (2-2.5%). Second, we want to create new micro-companies. The most dynamic engine of a small economy like ours revolves around new entrepreneurs and SMEs. Our economic ecosystem must be changed, and here comes the necessity for new blood willing and able to tackle complex issues.