Innholdsfortegnelse for June 2017 i Lebanon Opportunities

INDUSTRIALISTS DECRY UNFAIR COMPETITION The Association of Industrialists (ALI), chaired by Fadi Gemayel, has warned that a number of local factories will go bankrupt unless officials take swift measures to stop what he described as unfair competition by factories established by Syrian refugees. ALI called for protective measures, the end of dumping, and for the enactment of an export strategy to regain what has been lost in the past few years. Gemayel announced ALI’s demands, including the need for an incentivizing policy to create the proper atmosphere to increase local production. “We need protective fees for products that compete with similar local products, especially that such a decision does not contradict trade agreements we have signed,” he said. Gemayel asked for the raising of custom fees on such products, especially…

ILLICIT FINANCIAL FLOWS TOP $32 BILLION IN TEN YEARS Illicit financial flows between Lebanon and abroad reached $32.6 billion over the ten-year period 2005-2014, accounting for 17 percent of the country’s total trade, according to average estimates by U.S.-based research and advocacy organization Global Financial Integrity (GFI). GFI’s report, ‘Illicit Financial Flows to and from Developing Countries: 2005- 2014’, defines total trade as the sum of exports and imports. The country’s total trade amounted to $197.5 billion over the same period. Illicit financial inflows and outflows are derived from leakages in BoP and from deliberate misinvoicing. Inflows of fraudulent trade mis-invoicing totaled $4 billion (two percent of total trade) and that of outflows $3 billion (1.5 percent of total trade). Balance of Payment (BoP) leakage outflows totaled $15.8 billion (eight…

A program to promote cultural and religious tourism has been launched by the recently established Cultural Religious Tourism (CRT) unit. The initiative is affiliated to the Office of the Prime Minister. The program is in cooperation with the Ministry of Tourism. The Italian Cooperation Office has funded €297,000 ($328,000) for the project to be implemented. SUSTAINABLE TOURISM The program was first discussed in 2009, when a clause was included in the ministerial statement of Prime Minister Saad Hariri’s government supporting religious tourism. The CRT was formed so the country ‘s religious sites would be firmly placed on the world map. According to Hariri, the project shows that interreligious dialogue is possible in a country known for coexistence. Minister of Tourism Avedis Guidanian said the project reflects the ministry’s latest efforts…

▹ Links: Click this article’s entry in ‘Table of Contents’ on our website Circular 427 was issued last year. Its aim is to help alleviate cash-strapped real estate developers through making loans available to specialized real estate companies that wish to purchase entire or part of new buildings facing difficulties in finding buyers, and whose developer is heavily indebted. The loans however will not benefit from any interest subsidies set by the Central Bank (BDL). Interest rates will have to be negotiated instead. Real estate companies operating under the circular will be permitted to have a collective investment scheme (CIS), sometimes referred to as a ‘pooled investment,’ a fund to which several people have contributed. A fund manager will invest the pooled capital in one or more types of asset,…

Companies, big and small, are keeping an eye on social media trends. Marketers must be willing to explore concepts such as ‘contextual reach’ and ‘engagement practices’ in order to transform followers into clients. According to Khaled Hawari, Managing Partner of Softweb, a local digital marketing agency, if these trends are not adopted, companies will lose visibility. Reaching target audiences was once straightforward, organic, and mostly free. Today, companies are putting their hands in their pocket to ensure that their content is friends with intricate algorithms in order to penetrate social media platforms deeply. THE LAY OF THE LAND More than half of the world’s population uses the Internet, and half of the world’s web traffic comes from mobile telephones. Locally, mobile telephone subscriptions exceeded 4.5 million in 2016 and Internet…

The Internet of Things (IoT) has been termed the next ‘Industrial Revolution.’ It is expected to change the way people live, work, entertain, and travel, as well as how governments and businesses interact with the world. The revolution has already started, including here in the country. By implementing IoT systems, businesses can improve processes, productivity, and waste management. The agriculture, food, and real estate sectors are currently benefiting from IoT systems. The near future will see every aspect of business connected. THE DRIVERS There are several factors behind what is driving IoT: The rapid growth of cloud, social media, smartphones, mobile Internet, the ability to analyze big data and turn it into actionable information, and an improved ability to combine hardware and software. Tony Azzizi, Regional Manager at Logicom, an…

ANTOUN SEHNAOUI AND SGBL EXPAND IN U.S. AND UAE Société Générale de Banque au Liban (SGBL) and its major shareholder Antoun Sehnaoui are in the process of expanding their businesses to Abu Dhabi and the United States. SGBL plans to open a fullyowned subsidiary within the Abu Dhabi Global Market (ADGM) with an initial capital of $50 million, said Georges Saghbini, SGBL’s Deputy General Manager. The new entity will launch its operations in June and will provide corporate, institutional, and private banking services, he said. ADGM is an international financial center that offers tax incentives to attract providers of private banking services as well as wealth management and asset management services. Sehnaoui, SGBL’s Chairman, is, on a personal level, also expected to complete in July the acquisition of a small…

▹ Links: Click this article’s entry in ‘Table of Contents’ on our website Positive performance in the food and beverage (F&B) and nightlife subsector is behind a surge in the number of nightclubs, pubs, and restaurants planned to open in the coming months. The venues include brands and companies that are already entrenched in the hospitality sector. Activity is mainly centered on the capital and the nearby mountain resort towns, although popular coastal towns further away have also been earmarked. GOOD SEASON PREDICTED Tony Rami, Chairman of the Syndicate of Owners of Restaurants, Cafes, Night Clubs and Pastries, believes the months ahead will be good. “Investors feel encouraged to launch their products,” he said. Rami revealed 12 names that will open in the coming months. The nightclubs include Skybar, Caprice,…

Labeled as a ‘tech gateway’, tech giants like Apple Founder Steve Wozniak, and Tony Fadell, the creator of the iPhone and iPod, have been recent visitors to conferences here. The establishment of new incubators and accelerators has fueled the growth of the ecosystem of tech startups. The Internet of Things (IoT) is beginning to rear its head, changing how people, governments, and businesses interact. Hardware and software product trends – laptops, mobile phones, apps – are in line with users globally. A recent survey by InfoPro research revealed millennials are at the helm of tech users. Big data is beginning to be collected and analyzed for innovative private projects, and an ever-shifting landscape looks certain to give way to a digitalized economy. CONSTANTLY CONNECTED Consumers are fast adopters of new…

The Bank of Beirut (BoB) and two individual entrepreneurs each launched last month three digital initiatives – ‘Lebanon Investors’, ‘Ya Mijana’ and ‘TEDMOB’. The initiatives aim to connect local entrepreneurs and local businesses to the Diaspora worldwide, helping it to tap into the local economy and vice versa. LIKE-MINDED INVESTORS ‘Lebanon Investors’ was launched by BoB. The overarching objective of the digital platform is to link the diaspora to the economic opportunities available in the country. Danielle Issa, Head of Strategic Development at BoB, said: “The website is a forum where like-minded investors can come together.” Information related to investor profiles is channeled to a team at BoB, who then align the profiles with local industrial contacts and partners for proper financing purposes. TARGETING SPECIFIC MARKETS The ‘Ya Mijana’ app…

It is important to take a long-term view of global economic trends that looks beyond the short-term ups and downs of the economic and political cycle. To the extent that events such as Brexit and the election of President Trump point to deeper structural shifts, such as the backlash against globalization, immigration, and the rise of inequality, all of which present short-to medium-term challenges for policy makers to boost education and training and to address unfairness through well-targeted fiscal policies. However, such shifts, most likely, will not affect the long-term trajectory as determined by fundamentals like demographics and technology. A SHIFT IN GROWTH The first of the four long-term global economic trends that I will identify is the shift in global growth. Emerging economies will account for 50 percent of…

100,000 LANDLINE TENDER A tender was launched last month for Phase 7 of the Outside Plant (OSP) network, which is physical cabling and supporting infrastructure (such as conduit, cabinets, tower or poles) It will include for the first time the simultaneous installation of copper wires and fiber optics, according to Naji Andraos, General Director Equipment & Construction, at the Ministry of Telecommunications. The value of the tender is estimated at $35-45 million. “Around 100,000 landlines for 6,000 buildings will be installed in newly built-up areas countrywide. Areas of Bekkaa and Kesrouan that only have a wireless network will be excluded,” said Andraos. The tender will be divided into five groups. The first one includes Beirut, Shouf, and Aley, the second is Metn, Kesrouan, and Jbeil, the third, Tripoli and Akar,…

▹ Links: Click this article’s entry in ‘Table of Contents’ on our website ▪ GDP WILL BENEFIT FROM POSITIVE POLITICAL DEVELOPMENTS ▪ FOREIGN TRANSFERS WILL CONTINUE TO SUPPORT BALANCE OF PAYMENTS ▪ FISCAL DEFICIT WILL SUFFER FROM POSSIBLE SALARY-SCALE SPENDING Economic performance this year is expected to improve to a certain extent, driven by positive political developments, a moderate recovery in the tourism and real estate sectors, and an increase in consumption and investment. Financial inflows are likely to continue to grow after surging last year following the financial engineering operations of the Central Bank (BDL). The balance of payments is projected to record a surplus for the second year in a row after five consecutive years of deficits. Notwithstanding these positive developments, public finance is not expected to fare…

▹ Links: Click this article’s entry in ‘Table of Contents’ on our website Solar, wind, hydraulic power, and waste-to-energy projects are all being targeted by the ‘Lebanon Infrastructure Fund’, a structured investment vehicle (SIV), or fund, that will be launched by FFA Private Bank (FFA). The SIV includes an array of investments valued at $1 billion. FUNDS FROM ABROAD Iyad Boustany, Managing Director for Investment Banking at FFA, said that the fund is very advanced in terms of financial sophistication. “It is the first of its kind in the country,” he said. The fund’s initial objective is to reach investments of $1 billion in the short-to-medium term, over two to three years, according to Jean Riachi, FFA’s Chairman. Most of the large projects being targeted will, in principle, be public…

The country’s startup ecosystem began more than a decade ago, with a few modest steps. But in the last few years, things started to take a more rapid pace. The implementation of the Central Bank’s Circular 331, in August 2013, has helped it to develop further. The circular incited banks to offer equity funding to startups in the innovation and knowledge sector, under specific conditions. The complete ecosystem has several phases and now involves a wide-range of people, startups at their various stages, investors in different guises, and numerous types of organizations. Investment funds that were once only active at the ecosystem’s later stages have begun to eye the riskier early or seed stage. The approach is expected to help drive the pipeline for the system’s later stages. As the…

METHODOLOGY The Residential Real Estate Price Index and Residential Real Estate Inventory Index are primary and unique indicators of the housing market’s health. The indices track price evolution and the inventory of apartments across Administrative Beirut, the suburbs, and the main urban areas of the Metn, Baabda, Kesrouan, and Aley cazas. The Price Index tracks the asking price and not the sales price of apartment units. The Inventory Index tracks the total number of available new apartment units that are for sale. The index calculation, which is published every six months, has 2012 as its base year. A nominal value of 100 was assigned for the beginning of year 2012, and then the value of each half year is plotted to show fluctuations in asking prices and unit inventory across…