By Georges Sassine

It is possible to make it easier to do business in Lebanon. One potential solution is to simplify the government’s bureaucracy and reduce administrative paperwork.

The Problem

While starting a business in Hong Kong requires standing in one line and filling one form, it takes weeks, if not longer, in Lebanon.

Currently it takes a company in Lebanon almost 2 years to enforce commercial contracts and 37 administrative procedures, compared to an average of 1.4 years in Western countries. This places Lebanon at the 104^th place among 183 countries worldwide in terms of ease of doing business, according to the World Bank. Lebanon lags behind countries like Papua New Guinea, Yemen, Jordan, and Sri Lanka.

Lebanon is competing in a 21^st century global economy with a 20^th century bureaucracy. This is hindering economic growth, making it harder for entrepreneurs to start new businesses, and making it less attractive for foreign companies to invest in Lebanon.

A Potential Solution

Fortunately, it is possible to make it easier to do business in Lebanon in a few simple steps.

Just by simplifying the government’s bureaucracy, eliminating waste and inefficiencies – as simple as it sounds – could significantly boost Lebanese businesses.

One potential solution is to consolidate all government agencies dealing with business into one Department with one website, one phone number and one mission: helping Lebanese businesses succeed.

Other countries are adopting similar initiatives. Even the United States – which ranks 4^th worldwide on the World Bank’s Ease of Doing Business Index – is pursuing a similar plan, including:

–  Merging Government Agencies: the USA will merge the six federal departments focusing on business and trade into a single department tasked with boosting American business and promoting competitiveness.

–  A One-Stop Shop Website: the USA will be unveiling a new website: Business USA. This site will be a virtual one-stop shop with information for businesses that want to begin or increase exporting.

This is one example of the kind of action to consider. In your opinion, what are other simple and effective ways to improve the business environment in Lebanon?

By Georges Sassine

In order for Lebanon to create jobs and grow its economy, policy makers should identify the sectors and industries that will have the highest impact on Lebanon’s economy.

One way to go about this analysis is to compare potential industries along three variables:

1. The first is the industry’s potential contribution to Lebanon’s economy.
2. The second factor to consider is how easily these industries can be developed. This includes capital investment requirements; the need for new policies and regulations; and the availability of local talent and infrastructure to develop these industries.
3. The third factor is the number of new jobs created by industry. Some sectors are more labor intensive than others, which is an important element to consider.

I attempt to map different industries Lebanon can further develop along these three variables considering both quantitative and qualitative measures.

Please help me refine this analysis with additional insight and data you may have.

A summary of key findings include:

IT & Media industry

● Description: Hardware and software; cyber security; new and traditional media.
● Economic impact: Arab World online platform ~$1B by 2016 and 276 percent growth; recent studies estimate that when Internet penetration rises by 10 percent in emerging economies, it correlates with an incremental GDP increase of one to two percent.
● Ease of implementation: Talent available; established Media industry
● Jobs created: high level skills required.
● Enablers: Infrastructure; remove red tape; VC funding and support.

Tourism

● Description: Healthcare tourism; and others.
● Economic impact: Healthcare tourism market ~$1.2B; 30% growth potential.
● Ease of implementation: available talent; facilities need upgrading.
● Jobs created: labor intensive.
● Enablers: Investments; infrastructure; remove red tape.

Agriculture

● Description: Traditional agriculture; new/added Value agriculture.
● Economic impact: Exposure to large MENA market; today 80% of Lebanon’s food consumption is imported costing $1.5 Billion per year.
● Ease of implementation: Moderate climate and rich soil; underinvestment in Lebanon’s agriculture sector; low political support.
● Jobs created: labor intensive.
● Enablers: Agricultural policies; investments; infrastructure.

Oil and Gas

● Description: O&G production; LNG, refining & exports.
● Economic impact: Uncertain yet, but neighboring country’s offshore finds ~$80 Billion by 2040.
● Ease of implementation: Limited domestic expertise; high investment requirements.
● Jobs created: the oil and gas industry is a capital intensive industry rather than being labor intensive.
● Enablers: Regulations and governance; transparency; investments.

Manufacturing

● Description: Machinery; food & beverages; pharmaceuticals.
● Economic impact: Lebanon exports a large number of sophisticated products but they constitute only 2 percent of total Lebanese exports. A focus on increasing added value exports could significantly increase Lebanon’s manufacturing industry contribution.
● Ease of implementation: low political support.
● Jobs created: labor intensive.
● Enablers: Industrial policies; infrastructure; financing.

By Georges Sassine

Lebanon needs to fight persistent and widespread corruption in order to restore the trust of Lebanese citizens and foreign investors.

One approach is for Lebanon to draw from the experience of other countries, including Tunisia. And a specific example is a new anti-corruption website recently launched by the Tunisian government, which Lebanon can imitate.

The Tunisian “Anticorruption-Idara” website allows any citizen or public employee to report cases of corruption by filing a form online. The identity of the informer remains confidential and anonymous.

Tunisian officials set up this initiative to counteract corruption, nepotism, cronyism, and other forms of injustice in their country’s public sector.

However, three specific issues are raised regarding this website. First of all, the Tunisian site was only published in Arabic, which excludes non-Arabic speaking entrepreneurs and investors. To be effective, Lebanon should then consider a multilingual anti-corruption website.

The second issue is around the credibility of the reports. Given the anonymity of these claims, this tool can easily be used to launch false accusations against individuals. An effective verification mechanism will then be needed if such a website is used in Lebanon.

The third issue that is raised is the amount of resources required to monitor, verify, and implement such an initiative. While the idea of a website sounds simple, it could require significant financial and human resources to carry it through. This is why Lebanon would need to better understand the requirements to launch a successful anti-corruption platform.

In your opinion, is this initiative worth considering for Lebanon? And how should it be designed and implemented to help reduce corruption in our country?