THE CUSTOMER-CITIZEN COMES FIRST

Lebanon 2017 | ECONOMY | INTERVIEW

TBY talks to Raed Khoury, Minister of Economy and Trade, on the reforms needed to keep Lebanon on the right growth track, the importance of protecting the Lebanese consumer, and improving Lebanon's balance of trade.

Raed Khoury
BIOGRAPHY
Raed Khoury was born in Choueifat in 1975. A Chartered Financial Analyst (CFA), he holds a BA in economics and a master’s degree in banking and finance from the American University of Beirut (AUB). The founder of Cedrus Invest Bank and Cedrus Bank SAL, he has extensive banking experience with a focus on wealth management, investment, and commercial banking services. As a former director at Barclays Wealth, Khoury was in charge of a team of bankers covering the MENA and Gulf regions. He also spent more than seven years with Audi Group, where he held senior management positions in private banking in Lebanon, Switzerland, and Saudi Arabia.

Lebanon's economic growth is projected to double in 2017. How does the ministry evaluate these prospects?

The prolonged crisis in Syria continues to dominate Lebanon's outlook, with losses exceeding USD13 billion to date as per the World Bank's estimation. Moreover, growth has been subdued due to further pressures on the economy's depleted infrastructure, chronic trade and fiscal deficits, and the lack of public and private investment. However, the major political breakthrough with the election of the president and the formation of the government will help boost confidence in the economy and return growth to 2007-2010 levels. Moreover, we see consumer and investor sentiment improving alongside inflows of tourists and capital. However, the country will only see positive improvements if structural reforms aimed at improving consumer and investor confidence, boosting economic growth, accelerating deposit flows, and strengthening financial stability are implemented. These must reduce infrastructure bottlenecks (mainly through the adoption of the PPP law), enhance the business environment for Lebanese enterprises to grow and create jobs, and encourage investment in sectors where Lebanon holds a comparative advantage.

What initiatives is the ministry taking to protect those sectors considered at risk, such agriculture or industry?

The Protection of National Production Legislation was adopted in 2008 and governs the international commercial practices that cause injury or threaten domestic industry or agriculture in Lebanon, or hinder the establishment of these sectors, specifically when a given agricultural or industrial product is being dumped or subsidized by foreign governments. We also have anti-dumping, countervailing, and safeguarding mechanisms to protect any Lebanese sector or product at risk from increased imports.

What steps have been taken to improve Lebanon's balance of trade?

The Ministry of Economy and Trade is developing a strategy aimed at balancing trade flows with new and existing markets such as Mercosur, Africa, Iran, Russia, and others. Our aim is to work toward decreasing the gap between our imports and exports by selling more wine, olive oil and agro-industrial products, jewelry, fashion, crafts, and ICT.

What are the ministry's priorities for the year ahead?

Our priority is to build on what has been done in the previous years, mainly with regard to undertaking the necessary procedures aimed at protecting the Lebanese consumer, attracting FDI and spurring exports, enhancing SME development, and mitigating the impact of spillover from the ongoing Syrian crisis. In regard to consumer protection, we believe that a well-informed and well-protected consumer is critical to a strong and stable economy. We will continue to stress the important role played by the Directorate of Consumer Protection at the ministry. On the FDI and exports level, our goal is to enhance the business climate to encourage investment, trade, and the movement of capital inflows. This will mainly be done by strengthening current relations and establishing new ones by opening up to new non-classical markets to trigger investments and spur Lebanese exports. This comes in addition to improving market access through the participation of Lebanese companies in international exhibitions with partner countries. With regard to SME development, we will undertake the needed steps to ensure the implementation of the National Strategy for Small and Medium Enterprises launched in December 2014. This will allow for growth and job creation. We are organizing roundtables, joining major stakeholders, tackling important topics, and covering all the regions in Lebanon. Finally, the ongoing Syrian crisis has had a tremendous spillover effect on our economy. As such, our goal is to mitigate this as much as we can. Work will be done through an inter-ministerial committee, the LCRP, which will identify needs and budgets. Meanwhile, international committee support is extremely crucial for getting the needed funds to cover Lebanon's development, humanitarian, and relief needs.