unctad.org | FDI gains strengthen Lebanon's position as a regional hub
FDI gains strengthen Lebanon's position as a regional hub
05 December 2018
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Cosmopolitan and well-located Lebanon aims to boost employment and drive development of the country's information economy through foreign investment.


Lebanon is a regional success story in the Middle East, attracting foreign direct investment (FDI) rates surpassing $2 billion every year since 2003.

Its performance, above the regional average, has seen it move to leverage its advantages as a destination for foreign investment in information technology and the digital economy, an UNCTAD report shows.

UNCTAD’s newly published investment policy review (IPR) of Lebanon highlights the country’s strong local private sector, skilled labour and strategic location – all magnets for investors.

Speaking at the report’s launch in Geneva, Switzerland, Nabil Itani, who chairs the Investment Development Authority of Lebanon (IDAL), said:  “The IPR, initiated at the request of the Government, aims to support Lebanon’s reform efforts. The report clearly shows the potential for Lebanon to continue attracting FDI.”

According to UNCTAD Secretary-General Mukhisa Kituyi, FDI has contributed to the nation’s diversified economy.

“If Lebanon were to address the constraints that still hamper the operational environment for businesses, it could reap significant economic and social development gains,” he said.

To achieve such results, several challenges need to be overcome. Investors must deal with poor energy infrastructure.

Regulatory obstacles, burdensome administrative requirements and institutional weaknesses also affect the quality of the investment climate and need to be managed.

“It is no exaggeration to say that the IPR could have a transformative effect on the type of investment attracted and job creation, which the country needs,” Dr. Kituyi added.

The review makes several recommendations to help Lebanon reform its investment climate and adopt a strategic approach to investment promotion with a focus on the information economy.

Chief among these are measures to correct regulatory issues. Lebanon could, for example, remove restrictions on investor entry and address the high level of market concentration by adopting a competition framework.

The IPR also encourages Lebanon to focus on competitiveness by adopting a series of eGovernance solutions.

Unlocking potential

Lebanon hopes that regulatory reform can support its strategy to develop information technology (IT) and IT-enabled services.

But institutional change will also be necessary,  the review highlights.

The IPR proposes several reforms to the structure and functions of IDAL to position the country as a leading regional and global destination for investors in the information economy.

At the launch of the report in Geneva, Switzerland, on 4 December 2018, UNCTAD’s director of investment and enterprise, James Zhan, said Lebanon may need to address several key areas affecting business operations.

Key priorities include a focus on capacities, awareness and institutional cooperation, the preparation of the investment promotion strategy, and the expansion of knowledge and networks for targeted activities.

Highlighting Lebanon’s good fundamentals, IDAL economic advisor Leila Sawaya El Khoury said that the country has nevertheless not been able to capitalize on them.

“We have a suboptimal business environment”, she said, adding, “we need more online tools for investors, in areas such as business registration, land registration and tax payments”.

But Ms. Sawaya El Khoury was hopeful for the future: “We have an edge in the knowledge economy and have identified this sector with UNCTAD as a priority area for further action and investment facilitation”.

To date, UNCTAD has supported 46 developing countries and economies in transition by conducting investment policy reviews. It has also provided technical support to implement the reviews’ recommendations.

Studies show the reviews have helped countries attract and benefit more from increased FDI, while improving business climates.


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