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French Version

Job creation, exports key to halting brain... - The Daily Star

Job creation, exports key to halting brain drain without gdp growth, country faces 'brick wall' - The Daily Star

Businessman urges firms to tap foreign markets, female labor to boost economy.

It is shameful for Lebanon to have an annual gross domestic product (GDP) of just $4,000 per head, businessman Roy Badaro says.

"It should be three times that figure, about $12,000, which is nearly half " figures for Europe," Badaro, head of the Euro-Med unit at the Beirut Chamber of Commerce, told a conference on small- and medium-sized enterprises (SMEs) on Thursday. And even more shameful, he argued, is that Lebanon lost $4 billion in 2001 due to a decade of brain drain that saw 50,000 of the country's youngest and most skilled people emigrate abroad each year.

"Just by calculating the cost of the brain drain over the past decade, Lebanon achieved only 80 percent of its potential GDP in 2001," Badaro added. But these economic losses can be redressed by starting small, he added, through industrial clusters, or incorporating women into the labor force. "Nearly 95 percent of all Lebanese firms are small- or medium-sized," said Badaro. These firms have a potential market worth $47 billion, he said, including various industries for which Lebanon is known. Being a world leader in the export of sesame oil is one advantage Lebanon can build on to move toward that $47 billion figure. But more urgent issues should prompt Lebanon to get its house in order.

"By 2036, Lebanon's population will explode to 8.5 million, based on the current annual population growth rate of 1.9 percent," said Badaro. "This means we have to create 3 million jobs by 2036. If we don't, most of our children will end up outside this country." Lebanese mobility has so far saved the country from a high unemployment rate. "If the young Lebanese population had not left the country to find work in the last decade, one in four Lebanese would have ended up without a job, nearly doubling the official unemployment rate of 12 percent," said Badaro.

Each year, Lebanon produces jobs for some 12,000 people. Labor Minister Ali Qanso recently estimated that the job-creation figure should hover around an annual 37,000. "In fact, we need to create 90,000 jobs a year just to reverse the emigration trend and incorporate newcomers," said Bad-aro. To create a more efficient economy, he said, the job market for women needs to expand. "If we incorporate women into the economic cycle, we will increase productivity," he said.

Despite the political and economic turmoil sweeping Lebanon, the country could tap its export potential to achieve higher GDP, said Badaro.
"Our per capita GDP growth is way below that of the separatist Basque region in Spain, which has been plagued with its own cycle of violence," Badaro said. "The Basque region's average per capita GDP is $23,000. If Lebanon does not achieve 8 to 10 percent economic growth in the near future, we will run into a brick wall."
Badaro urged the government and private sector to set up clusters grouping industries.
"We have in Lebanon an olive cluster in Koura and a jewelry cluster in Bourj Hammoud, for example," Badaro said. "We can build on these to have clusters all over the country and try to emulate the Italian or Israeli experience."

Lebanon could look to rivals for clues. "When Israelis decided to set up clusters for flower production, they did not worry about cost," Badaro said. "They made sure their flowers reached Holland before the market opened at 5am." That strategy made Israel one of the top exporters of flowers to Holland. But Israel has another advantage that is missing in the Lebanese industry.
"Lebanese are very individualistic," Badaro said. "They do not like to work in a community. We need to create a culture for clusters."

Beirut 09-12-2002
Dania Saadi
The Daily Star

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