A SEA CHANGE

Lebanon 2017 | ECONOMY | VIP INTERVIEW

TBY talks to Nabil A. Itani, Chairman of the Investment Development Authority of Lebanon (IDAL), on FDI inflows, opening new export markets, and improving the regulatory system.

What is Lebanon's capacity of increasing its FDI flows in the short term?

Lebanon can offer a lot to investors, and our slogan for this year is “the pleasure of doing business.” Any investor can benefit from the doing business climate in Lebanon, from the human resources, lifestyle, quality of education, and all of the fundamentals of the open market economy. It is true that the Lebanese economy has been affected by the Syrian conflict since 2011, but now, with the election of the new president and the formation of the government, we are expecting more political stability, which will contribute to the achievement of our ultimate goal: the enhancement of our business climate. I believe that Lebanon is on the right track, and will be able to achieve more growth in the years to come especially with the launch of its oil and gas extraction plans, and the reconstruction of the Syria peace process, which will surely attract more investment and encourage capital inflows.

Local, international, and Arab investors are key for the country, but expats also play an important role. How is IDAL working to encourage expatriates to invest in their homeland?

Our target investors, the ones that have invested in Lebanon historically, are split into four main categories. One category is local investors, the second is the expatriates, the third is Arabs mainly from the Gulf area, and the fourth is multinational companies that invest in Lebanon to provide goods and services for the country, or use Lebanon as a hub for the region. However, due to the conflict in the region, the only two main categories that invested between 2011 and 2016 were locals and expatriates. Regarding the expatriates, we have been doing a lot recently; we participated at the LDE conferences held in New York, Sao Paulo, and South Africa. Organized by the Ministry of Foreign Affairs, these conferences aimed to encourage expatriate investors not only to invest in Lebanon, but also to be connected with the country through three main axes. The first axis is to encourage investors to invest in Lebanon and create partnerships with Lebanese companies, the second axis relies on enhancing trade between Lebanon and host countries. The third is based on encouraging them to adopt Lebanon as an outsourcing hub, especially given the fact that Lebanese productive sectors may supply them with many high quality products, components, and services. The economic and cultural connectivity that Lebanon has with many countries is highly important, and this is something that expatriate investors and other investors can all benefit from.

How is IDAL working to open new markets that are not traditionally seen as export destinations?

In addition to encouraging investments, IDAL also aims to encourage and promote Lebanese exports. As such, we have launched a range of programs that subsidize exports in the industrial and agricultural sectors as for instance the Agri Plus and the Agromap Programs. We have also launched the M.LEB initiative (Maritime Lebanese Exports Bridge) in response to the closure of land borders due to the Syrian crisis. Although the aim of this initiative is to maintain our products' presence in the traditional markets, we wanted the exporters to get used to maritime transportation so they can go much farther and access new markets namely in the Americas, Europe, and Australia. IDAL also supports the promotion of the agrifood exports in the regional and international markets, through increasing the competitiveness of exporters, and providing agrifood products with a wider exposure to foreign markets. This also includes providing companies with financial assistance to participate in international food fairs. In this regard, IDAL sponsors Lebanese pavilions in major exhibitions, including SIAL, GULFOOD, ANUGA, FANCY FOOD SHOW, and HORECA. In this way they are contributing to improving the quality of agrifood products to meet international standards. The support is provided on a continuous basis to provide exporters with the financial and technical means to improve their production process and access new markets.

How can Lebanon become a start-up hub for the region?

This year IDAL launched a program as a business supporter for startups, to help them start their operations in Lebanon. This program aims at channeling ideas into a business model. It may help entrepreneurs on how they can choose the formulation of the legal infrastructure, how to register their company, register their trademark, their idea, and how to secure the money for business investment. I think that this program, along with many others launched by different stakeholders will support Lebanon in becoming a startup and IT hub in the region. The government has a medium-term vision for boosting the IT sector and developing Lebanon as an IT hub.

What are your main goals and priorities for the year ahead?

As a key government player in economic development and as the country's national investment promotion agency, IDAL's plan for 2017 will mainly focus on increasing employment opportunities in the outskirts of the capital, with an increasing focus on the areas with the highest incidence of overall unemployment and youth unemployment. To that end, IDAL will partner with public and private sector stakeholders as well as international organizations to identify concrete investment opportunities in selected regions and work on mobilizing financing to ensure the implementation of these opportunities. A special focus will be placed on identifying projects or clusters of projects in the agrifood and industrial sectors that use new technologies to enhance productivity and competitiveness. Projects in the tourism sector and its sub-sectors will also be identified given their potential for employment specifically of low-skilled labor. In 2017, IDAL will push for regulations that foster the business environment and will work for ensuring the approval of the new incentive framework that grants investors in eight productive sectors with a series of tax breaks. If implemented these incentives could provide a huge boost to accelerating Lebanon's entry into the knowledge economy given the special emphasis granted to projects with a technology focus.