Tuesday, December 11, 2007


Nearly 10 years ago, Rafic Hariri initiated a program called Export-Plus to support the export of farm produce from Lebanon by subsidizing transport costs. He placed the program under IDAL, the Investment and Development Authority of Lebanon, one of those para-governmental outfits the late Hariri loved so much. One condition was to abide by quality criteria. It did not work too well, because small farmers (the vast majority of the farmers of Lebanon) could not benefit from it and because there was no farm extension programs associated with export-plus. But Hariri liked it because it was perceived as supporting agriculture without actually having to subsidize poor farmers. Sanioura, a firm believer in ultra liberalization, was always opposed to it, when he was Minister of Finance. Then came Sami Haddad, the Minister of the (disastrous) economy and (one-way) trade who lobbied against the program, instead of trying to improve it. He used the well worn argument: "if you don't scrap it, They wont let us into the WTO". So the government courageous as always, decided to play along and to gradually cancel the program. Meanwhile, IDAL, whose death was not foretold, prepared a new strategy to learn from their past mistakes and address better the real needs. This article describes the strategy, and from the main headings, it doesn't look too bad. It's actually better than the (non-existent) agricultural strategy of the ministry of Agriculture. That's probably why the Sanioura government will go ahead with the execution. And probably create an Import-Plus program.

Export-Plus, which was meant to support trade with the West, benefited primarily the classical trade routes: 32% of exports went to Syria, 21% to Saudi, 15% to Kuwait, UAE and Egypt 9%, Jordan 3% and Iraq 1%.


bech said...

But let's pause for a second here. Are there any State institutions that are being used to their fullest capacity to provide public goods? It is just ironic that Hariri had to create all these para-state institutions. How are people appointed there? Who are these institutions accountable to?

the more you move away in time from the initial birth of the "Lebanese State", the more the latter becomes obsolete. It is as if it was created for the sole reason to make the various confessional elites agree to have a name for this general divide and piece meal political and economic structure. the name is Lebanon. What happens after that is just "enta wou shatartak" to get more influence.

Rami Zurayk said...

The Hariri way of navigating around Lebanon's inefficient state apparatus was always to create parallel structures, or to strengthen existing ones. This is how 2 tier systems were created. For example people who work in the CDR (Council for Reconstruction and Development) earn twice if not more what people earn as ministry employees. IDAL is one of these institutions. Appointment of the CEO is arbitrary (usually someone close to the government), and the appointment of board members is on the basis of confessions. Most of these institutions are accountable to the prime minister directly.