Sunday, March 30, 2008

The industry

Ayman Fadel reports in Al Akhbar on a meeting organized to discuss the sorry state of Lebanese industry.
  • Lebanese industry contributes to about 18% of GDP, industry exports $ 2.8 billion a year.
  • The extra cost to the industry due to the hindrances created by working in Lebanon (costs, bureaucracy, etc) is estimated at 60% of the value added, or $668 millions. How can one be competitive?
  • The speakers (liberals to very liberals) blamed the contradiction between the ultraliberalism of the government on the one hand, and its control over the exchange price of the Lebanese pound which is locked onto the US dollar at 1,500 LBP for one US$. This contradiction creates mayhem in the economy.
  • Most of the importing countries are closing their doors to Lebanese products on the basis of quality, health and environmental issues.
It looks like the share of GDP in the economy is going to continue to drop, as the current government has shown no intention of changing its anti-productive economy course. Service economy and remittances (Lebanon is one of the 10 top countries for remittances) will continue to be the mainstay. Tourism remains the great hope. But last year, there were 900 million tourists in the world, 45 millions in the Middle East, and one million in Lebanon. We will need to make some serious effort if we want tourism to plug the hole in the Lebanese economy. Maybe make belly dancing compulsory?

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