Innholdsfortegnelse for April 2017 i Lebanon Opportunities

Provided by BUSINESSNEWS.COM.lb by LEBANON OPPORTUNITIES BANKS TO GENERATE $1.2 BILLION IN TAXES The Association of Banks (ABL) said that banks will pay $850 million in corporate income tax generated by the swap operations carried out with the Central Bank (BDL) in 2016. Banks were to pay $322 million in corporate income tax for the year 2016 on all operations, excluding the gains on swap operations. Bank shareholders will also pay a dividend tax of almost $56 million, bringing the total to be paid by banks and their shareholders to $1.23 billion. ABL said the tax on the swap operations alone will be enough to cover salary scale commitments amounting to $796 million and which are included in the State’s 2017 draft budget. As it has been estimated in the…

Links: Click this article’s entry in ‘Table of Contents’ on our website www.opportunities.com.lb ON OUR WEBSITE More information is available by typing the numbers below into the Reference Finder on our home page L0417-60 Trade data with Egypt L0417-61 Contact information The Ministry of Economy said that it is ready to apply trade agreements flexibly. “They are not sacred and can be adjusted to conform to the development needs of our relationship. But it’s a good start,” it said. The Memorandums of Understanding (MoUs) include agreements on management and civil service, veterinarian services, security, and participation in international exhibitions. Cooperation protocols also included the exchange of trade information, the implementation of consumer protection policies, intellectual property protection, and support to micro, small and medium sized enterprises (SMEs). Other agreements were…

Contrary to popular belief, a long-term retrospective shows a sharp improvement in the economy. From $16 billion in 1997, the economy has grown to more than $50 billion, more than 300 percent. The economy has fared relatively well during the last twenty years comparatively speaking, and considering the unending political and security challenges. In the 1990s, growth rates were high. This was due to reconstruction plans, which in 1997 helped increase the economy up to ten percent. This fluctuated sharply over the years to reach ten percent again in 2009, before severely decreasing in recent years due to political deadlock and the Syrian war. It is worth noting however that since 1993 there has not been one single year of recession. The country has even enjoyed the luxury of a…

Namir Cortas Chairman – REDAL Cortas has been a property developer in Beirut Central District since 1998. Besides being the Chairman of the Real Estate Developers Association in Lebanon (REDAL) since its establishment in 2013, he is also a cofounder of Estates, real estate development firm. Massaad Fares Coordinator – Real Estate Alliance Fares is the founder and former Chairman of the Syndicate of the Real Estate Association of Lebanon (REAL). He is now the coordinator of the Real Estate Alliance, which includes the associations of developers, contractors, topographers, and valuation experts. He is also the General Manager of Prime Consult, a brokerage firm. Walid Moussa Chairman – REAL He was elected as successor to Massaad Fares as the Chairman of the Real Estate Syndicate of Lebanon (REAL). He had…

Banque du Liban (BDL) Established in 1963, BDL enjoys total administrative autonomy. During the last two decades, it has gone beyond the traditional role of central banks by intervening on the foreign exchange market to uphold national currency levels. It once saved the national carrier MEA from bankruptcy, by acquiring all its shares and replacing the management. In order to stimulate growth, BDL has supported the productive sectors, the home loans market, and other socially sensitive activities through incentives offered to banks. One of its latest initiatives, through the Circular 331, is to provide equity funding for startup companies. Another circular, 427, is aimed at rescuing heavily indebted real estate developers. The Banking Control Commission of Lebanon (BCCL) Established in 1967 as an independent body to supervise banks, financial institutions,…

Automation has played an important role in the sector: Facilities expanded, production capacity increased, and product range diversified. This has been fueled by the implementation of research and development departments that have enabled the sector to remain both innovative and follow international trends and standards. Many factories have become ISO and Good Manufacturing Practice (GMP) certified. Local products are competing with imports to secure a sizable market share. Products that are ‘Made in Lebanon’ – wine, ethnic food, generators and power solutions, jewelry, fashion designs – are now demanded globally as the industry taps markets in Europe and the United States. PRODUCTION DEVELOPMENT The industrial sector accounts for 11 percent of GDP. This figure was 12.5 percent in 1997. Manufacturing, mining, quarrying, and utilities (including electricity and water) accounted for…

The birth of retail giants and the launch of chains have created major milestones during the past two decades. Dozens of bilateral and multilateral trade agreements have been signed to remove tariffs and help facilitate the flow of goods. A flurry of local and international clothing franchisees, supermarket chains, and an ever-increasing number of malls and home-appliance stores have spread nationwide. LUXURY RETAIL HUB The northern suburbs between Nahr el Mot and Dbayeh have been transformed from a low-key family business area to one of back-toback major retail giants. In the early 1990s, car showrooms opened along the highway. A few years later, clothing stores, supermarkets, and business centers became the norm. ABC was the only major retail venue in this area prior to the 1990s. It was later joined…

Nada Sardouk Director General – Ministry of Tourism Holding her present position for the past 15 years, Sardouk is also the Vice President for the Middle East, World Tourism Experts Association. Previously, she was an inspector at the Central Audit Authority, and a university professor before that. Pierre Achkar Chairman Association of Tourism Syndicates With more than 50 years in the hospitality business, Achkar has held his present position since 1995. He is also the Chairman of the Tourism Syndicates Federation. The owner and manager of the Printania Palace Hotel in Broumana, he also manages the Markazia Monroe Suites and Monroe Hotel, through a long term contract signed with the owners of each. Achkar is a member of the International Hotel and Restaurant Association. Tony Ramy Chairman – Syndicate of…

Michel Akl The Head of the Agriculture Committee in the International Chamber of Commerce and the Chairman of the Association des Importateurs et des Distributeurs des Instrants pour l’Agriculture au Liban (Asplante), Akl aims have been to defend the interests of agritraders and farmers, as well as to help improve sector output. Raphael Debbane As well as being the Chairman of the Debbane Group, and once publisher of the Agrotica magazine (1995-2005), Debbane also heads the Agricultural Committee at the Federation of Chambers of Commerce, Industry, and Agriculture in Lebanon. Musa Freiji Co-establishing and chairing the Lebanese Poultry Syndicate in 1962, Freiji is a member of the Association of the Lebanese Industrialists (ALI), and member of the Board of Directors of the Lebanese Food Industrialists. He established the Tanmia brand…

The highways, electricity, telecommunications, and water sectors have since 1997 benefited from a number of infrastructure programs. The Council for Development and Reconstruction (CDR) implemented a three-year infrastructure program at a cost $3.6 billion. This was followed by an extended ten-year program. The airport and the country’s two main ports have prospered, and laws have been enacted to better organize infrastructure subsectors. HIGHWAY NETWORKS A renewal program has been behind the rehabilitation of some highways. This included the main Beirut-Saida-Tyre and Beirut- Tripoli highways. Sections between the Chekka-Tripoli and Tarbarja- Chekka junctions witnessed vast improvements. The south highway is still incomplete, but construction is underway for it to soon reach the towns of Burj el-Chemaly and Qana. The main Damascus road has also seen activity. Work on the Sofar (Mdeirej)…

Sleiman Haroun Sleiman Haroun has since 2003 been the Chairman of the Syndicate of Hospitals which includes 157 private hospitals. The syndicate communicates with public and private healthcare administrations and organizations. He lobbies the government in order to collect hospital dues, and holds a yearly health and hospitalization congress in order to promote scientific, academic and technologic development, and to provide information on health to the public. Carole Abi Karam Since 1994, Abi Karam has been the General Manager of Pharmaline, an affiliation of Malia Group, and has achieved a major growth in the company. More recently she was appointed Chairperson of the newly-formed Syndicate of Pharmaceutical Manufacturers. Walid Ammar The Director General of the Ministry of Public Health, Ammar has worked on enlarging public healthcare services. He has done…

Provided by BUSINESSNEWS.COM.lb by LEBANON OPPORTUNITIES TWO MORE ELECTRICITY BARGES The Ministry of Energy and Water (MoEW) has put forth a new plan to increase power production starting this summer. The plan, which requires the approval of the Council of Ministers, proposes procuring the power production services of two more electricity barges with a capacity of 425 megawatts each. “The barges will be sourced from the Turkish firm Karadeniz for a period of five years at a cost of 5.8 cents per kilowatt hour,” an energy expert at the ministry said. If approved, the barges would be linked to the electricity grid in May and August. Two power ships, Fatmagul Sultan and Orhan Bey, have been linked to Zouk and Jiyyeh plants since 2013. Together they produce more than 250…

The government has finalized its version of the 2017 draft budget and submitted it to the Parliament. If it is eventually adopted and enforced, the budget will be considered a milestone for the resumption of order to public finance. The proposed budget did not include any additional taxes, as these are discussed concurrently by the Parliament along with the ‘salary scale’. Once approved, the salary scale’s expenditures and revenues will be inserted in the budget. MAIN FEATURES According to the ministry, there has been a clear policy to include all of the State’s revenues and expenditures in the draft budget, including program laws ratified by the Parliament in its latest sessions. “We affirmed commitment to borrowing ceiling in local and foreign currencies within the limit of estimated deficit in the…

Achour Development Founded in 1991, the company by 1999 was managing $100 million worth of projects annually. More than 200 real estate and infrastructure projects have been completed to date. Achour Development is also the owner of Lancaster hotels and suites. BREI Founded in 1998 by Karim Bassil, Brei is one of the few companies that introduced the micro apartment concept to the market. Its creations include a number of projects under the ‘Convivium’ heritage-style theme, offering small-sized units in the capital. Other projects include Edelweiss, located in the heart of Faqra. CGI Saradar Established in the 1990s with a focus on Beirut, the company was able to quickly succeeded as it became affiliated with Bank Audi in 2004. Seven years later, the Saradar Group acquired 81 percent of the…

The Lebanese Company for the Development and Reconstruction of the Beirut Central District (Solidere) is a joint stock company. It was incorporated on May 5, 1994. The company operated within Law 117, which regulates real estate companies aiming to reconstruct war-damaged areas. Additional regulations have more specifically defined Solidere’s status and role, in accordance with an officially approved masterplan. Solidere had a capitalization of $1.17 billion as in-kind contributions from previous property owners, in addition to a cash amount of $650 million offered by investors. By 2002, its capital had increased to $1.65 billion, after property that was worth 17 million shares was returned to their original owners. THE MASTERPLAN When Solidere was founded, a masterplan was put in place to develop 4.5 million m² of built-up area within more…

Riad Salameh Governor of Banque du Liban Salameh has held the coveted position of Governor since 1993 after being reappointed three times, each for a six-year mandate. He chairs the Higher Banking Commission, the Special Investigation Commission, and the Capital Markets Authority (CMA). He also chairs BDL’s Central Council, its Governing Board, and the Open Market and Investment Committees. Salameh is Governor for Lebanon at the International Monetary Fund (IMF) and the Arab Monetary Fund (AMF). He has succeeded in protecting the national currency in hard times and in maintaining a stable foreign exchange rate since 1997. He spearheaded BDL’s incentive programs to stimulate the economy. Prior to his appointment as BDL’s Governor, Salameh was Vice-Chairman and Financial Advisor at Merrill Lynch Paris. Joseph Torbey Chairman of the Association of…

A diverse range of fruits and vegetables has been introduced to the sector during the last twenty years. This continues today as farmers rise to meet the changes in global demand. The results of market studies have enhanced crop quality, through the adoption of international standards, such as the global gap certificate, and better quality control methods of the entire cultivation process, including packaging and storage practices. Although automation of the sector has seen the workforce dwindle, increasing quality has enabled farmers to penetrate international markets. AT A GLANCE The agriculture sector, including forestry and livestock, accounts for four percent of GDP. In 1997, it accounted for eight percent of GDP.It has since increased to around 40 percent. The livestock and fisheries sector represents around half of the entire agricultural…

General Confederation of Labor Unions (GCTL) In 2002 the number of union members was 60,000. Its main role is protecting worker’s rights, improving working conditions, and calling for salary increases. The union has worked to increase the services provided by the National Social Security Fund (NSSF) in order to cover the cost of pharmaceuticals and other services. The GCTL has pushed for the adoption of several decisions including medical coverage for employees aged above 64 years. Its main achievement is related to several increases of the minimum wage. The GCTL is the labor counterpart in the tripartite negotiation committee on inflation-based wage adjustment. National Social Security Fund (NSSF) The fund provides regular employees (and retirees) with insurance coverage for sickness and maternity care. It also provides family allowances and end-of-service…

Fouad Ayoub Chairman – Lebanese University Appointed to his present position in late 2016, Ayoub was previously the Dean of the Faculty of Dentistry. He is advisor and medical expert at the United Nations International Independent Investigation Commission. Ayoub holds a PhD of Medical Sciences from the Research Institute of Forensic Medicine, Moscow. Fadlo Khuri President – American University of Beirut The 16th President of AUB, and the first Lebanese to hold this post, Khuri earned his MD from Columbia University’s College of Physicians and Surgeons, in New York. He became Chairman of the Department of Hematology and Medical Oncology, U.S. Emory University School of Medicine. He holds the Roberto Goizueta Distinguished Chair for Cancer Research. Since 2010, he has chaired the AUB Medical School International Advisory Committee. Salim Daccache…

Provided by BUSINESSNEWS.COM.lb by LEBANON OPPORTUNITIES U.K. BANS CABIN LAPTOPS ON FLIGHTS OUT OF BEIRUT The U.K. has joined the U.S. in banning laptops and other electronic devices in airplane cabins on flights from Lebanon and several other Middle Eastern and North African (MENA) countries. The ban comes amid security concerns. Inbound direct flights from Lebanon, Jordan, Egypt, Saudi Arabia, Tunisia, and Turkey will be affected by the ban. Mobile telephones or smartphones larger than what is considered to be ‘normal-sized’ will also be forbidden. Laptops, ereaders, cameras, kindles, tablets, printers, electronic games, and portable DVD players are affected by the ban – which applies to direct flights. Electrical items may still be stowed in checked baggage. Approved medical devices may be brought into the cabin after additional screening. “We…

Provided by BUSINESSNEWS.COM.lb by LEBANON OPPORTUNITIES HALF THE TAXPAYERS EARN BELOW $10,000 ANNUALLY The lowest income earners among private sector regular employees (up to $10,000 annually) account for 57 percent of employees, and the highest two brackets (more than $40,000) account for six percent, according to ‘Assessing Labor Income Inequality in Lebanon’s Private Sector,’ a recent study conducted by the Ministry of Finance and United Nations Development Programme (UNDP). Tax records of 369,279 declared employees represented a total income of $5.5 billion in 2014. The figure shows that the average wage is about $15,000. Tax records of 88,040 business owners, including the self-employed, represent a cumulative income of $1.3 billion. The lowest brackets (as defined above) account for 67 percent of all business owners, while the highest brackets account for…

Everything has gone up in the past 20 years. The economy is now more than three times larger, the public debt twice as big, and banks are five times what they used to be in terms of assets and loans. The macro view shows improvement in every sector, as well as ailments that come with an archaic and anarchist environment, both in the real and figurative senses. MONEY MONEY MONEY It all boils down to dollars and liras. It is one of the most important measures of success and failure. Deposits in banks are now more than $160 billion, most of it owned by locals, residents and expatriates. This measure indicates a five times wealthier society, albeit hiding increasingly alarming disproportion between the poor and the rest of the people.…

Fiscal deficit and public debt have continuously escalated over the last twenty years. This is despite the growing revenues, and inexpensive funding being provided by international donors. The mounting deficit has been mainly interpreted as a result of poor management of revenues and spending, and of widening debt service costs. CHRONIC DEFICIT The chronic deficit in public finances reached a record almost $5 billion in 2016, more than double the levels 20 years ago. During the years 2002 to 2005, it witnessed a temporary decline following the introduction of VAT. Although total revenues increased at a higher rate than expenditures, the fiscal deficit was unable to be prevented from widening since taxes start from a higher base and increased in larger absolute values. Taxes, the major component of budget revenues,…

The Beirut Stock Exchange (BSE) resumed activity in 1996. In collaboration with the Bourse de Paris, new bylaws and an upgraded electronic trading system had been put in place. A number of market indices were compiled, including from Lebanon Invest and Blominvest Bank, which was named the BLOM Stock Index (BSI). The bourse is run by a committee that since 2009 has been presided over by Vice-Chairman Ghalib Mahmassani after the chairman position became vacant. REMOTE TRADING SYSTEM By 2000, new forms of securities were allowed to be listed on the bourse. Some of these included global depository receipts (GDRs), priority shares, preferred stocks, and the shares of investment funds. The BSE continued to improve its trading system over the years. One of the milestones was a new remote trading…

Nabil Fahed Chairman Syndicate of Supermarket Owners Fahed has played a pivotal role in regulating the country’s supermarket business. He owns two supermarkets, one in Jounieh, the other in Zalka. The Zalka branch, Fahed Supervalue, rolled out a unique weekly campaign whereby prices are slashed by half for dozens of items. Fahed is also the Vice Chairman of the Chamber of Commerce, Industry, and Agriculture in Beirut and Mount Lebanon. Nicolas Chammas Chairman – Beirut Traders Association An active member of economic bodies, Chammas worked with Fransabank to launch a quarterly retail indicator. He is active in launching initiatives to improve the sector and to incentivize investments. He is also the franchisee for luxury brand Chanel. An author of several books, Chammas is Vice Chairman of Cedrus Bank and President…

Reforms during the past 20 years mean the sector today is in a better position to look toward the future. There are more teachers and schools than ever before. Curricula are gaining additional subjects in order for students to be taught the needed skills for the modern workplace. Higher educational facilities are increasing in order to educate an ever-growing number of students. MODERNIZATION REFORMS The Ministry of Education and Higher Education in cooperation with the UN and the Center for Education Research and Development (CERD) have enacted a number of reforms since 1997. This has seen the update of teaching methodologies and educational programs, the development of curricula and textbooks, the extension of the primary teaching cycle to six years, and the introduction of a fourth specialization related to economy…

The private sector in healthcare is dominant. Equipped with the latest technologies, existing private hospitals have expanded and new ones built. The public sector has also been active. With external financial support, the government has established many hospitals. Today the number stands at 27 nationwide, including in the most remote regions. The capital itself has received its first large government healthcare educational facility: The Rafic Hariri University Hospital located in Bir Hassan. Several initiatives have been launched in order to improve the management and quality of health services. The good reputation of local hospitals and physicians has spread far and wide, thus having a positive effect on the medical tourism sector. SECTOR DEVELOPMENT Total expenditure on health has increased around 85 percent since 1997. This accounted for 6.3 percent of…