[daily star] International Monetary Fund (IMF) representative in Lebanon Eric Mottu urged the Lebanese government on Monday to start with the implementation of reforms in the water, telecom, electricity and transportation sectors to preserve the high growth rates reached in the past few years.
“There have been many plans to address these structural issues and now they should be put into effect,” he said. “So the main message to the Lebanese government today is action, action, action.”
Mottu said that growth will be negatively affected if the government does not deal properly with the reforms needed in the country’s dynamic sectors.
Mottu’s remarks came during the Lebanon Business and Investment Summit 2010 organized by the Investment Development Authority of Lebanon (IDAL) and the American Lebanese Chamber of Commerce. The conference, which was held at the Movenpick Hotel in Beirut, aimed at discussing the investment opportunities in Lebanon in the few coming years.
Mottu said that Lebanon’s performance during the global financial crisis had been remarkable. “The growth rate has been very high due to the political stability and the increase in capital inflows while inflation has remained under control,” he said. However, he cautioned, the debt was still one of the highest but the debt to GDP ratio was decreasing.
Lebanon’s gross public debt will fall to 131.16 percent of gross domestic product in 2010 from an earlier projection of 147.47 percent, figures from the Finance Ministry showed earlier this month.
The figures projected the debt-to-GDP ratio falling to 129.24 percent in 2011. Public debt for 2010 was projected at $51.4 billion, down from an earlier projection of $55 billion.
Mottu said Lebanon was facing many challenges including those related to macroeconomic management. “The government needs to remain prudent when it comes to macroeconomic management by keeping a tight budget in order to avoid jeopardizing the positive economic situation,” he said.
He noted that the monetary policy of the Central Bank needed to continue balancing the accumulation of reserves. “It also needs to control the high cost of these reserves.”
For his part, of Economy and Trade Minister Mohammad Safadi spoke about the measures adopted by the ministry to improve the economic situation in Lebanon and increase its resilience to the financial crisis.
Among the steps taken by the ministry was the adoption of the 2005 consumer protection law which protects consumers’ rights by ensuring the safety and quality of goods and services. “The implementation of this law is being significantly enhanced by the appointment of almost 200 new consumer protection inspectors at the Economy and Trade Ministry,” he said.
Moreover, industrial and agricultural producers can now act against unfair imports after Parliament ratified the law for the Protection of National Production, which is also known as the Trade Remedies Law, he said.
“The implementation of this law has created an inter-ministerial investigative authority which is already receiving and studying petitions for protection. This authority can recommend specific action against any harm, or a threat of harm, that it may find.”
Safadi added that the ministry had reduced the bureaucratic steps necessary to register intellectual property from seven to three, and it had also shortened the time for such a process from 40 to 15 days.
Safadi said Lebanon had benefitted a lot from these measures. “Lebanon has weathered through the global financial crisis with near-complete resilience to any major consequence. At the same time, the economy’s growth rate is forecasted to reach over 6 percent by the end of this year,” he said. “With this, Lebanon can now be counted as one of the fastest-growing economies in the world.”
He added that Lebanon registered in 2009 the highest level of foreign direct investment flows into the Middle East, when taken as a percentage of GDP.
However, he emphasized Lebanon’s needs to undertake immediate reforms in sectors such as electricity, water, communications, and transport.
“These needs can easily be translated into lucrative opportunities, which carry the added advantage of being backed by international investment insurance schemes,” he said.
“Examples of an international significance are the Tripoli Special Economic Zone and railway project. These will be based in an area that is strategically located to serve as a regional trade and business hub. The area will connect Lebanon with Syria, Jordan, Turkey, through both Tripoli’s sea port and future railway.”
Other speakers included IDAL chairman Nabil Itani, Chargee d’Affaires at the European Commission Cecile Abadi, managing partner of El-Khoury and Partners Ziad El-Khoury, and chairman of Better Business Group Fadi Saab.
IMF: Lebanon needs to implement reforms in water, electricity, telecom