IDAL chief asserts insecurity cost Lebanon foreign investment
| Billions of dollars from gulf states failed to come in |
Lebanon missed a big opportunity this year to attract badly needed foreign investment due to political uncertainty, the head of the Investment Development Authority of Lebanon (IDAL) said on Monday. "We could have attracted more than $3 billion worth of investments this year if the political situation was relatively stable. The oil-rich Arab states have excessive cash due to the oil boom and we are not been able to take full advantages of this unique chance," Nabil Itani told The Daily Star in an interview.
Lebanon depends heavily on foreign direct investment to create more jobs and achieve economic growth.
In the past five years, Arab investors have spent billions of dollars in real estate and tourism projects.
But since the assassination of former Prime Minister Rafik Hariri in February 2005 and the ensuing security incidents, investment in general took a severe blow.
Itani said that investments that were processed by IDAL fell sharply this year but hoped that the picture will change once the new president of the republic is elected in September.
The active projects that were done through IDAL this year reached $24 million only while the completed projects also fell to $56.630 million.
"Investment projects that were processed by IDAL in 2006 reached $510 million and in 2006 we had $330 million. But in 2007 investments through IDAL only reached less than $150 million so far," Itani said.
He added that Lebanon was set to attract over $3.5 billion worth of investments in 2007 but "sadly the tense situation muzzled these expectations."
"The Arab direct investments alone represented the largest portion of the projects that were executed from 2000 to 2007," Itani said.
According to IDAL, total Arab direct investment in Lebanon rose from $1.780 billion in 2005 to $2.225 billion in 2006.
The statistics showed that 68.5 percent of the total Arab direct investment in Lebanon went to real estate projects, 30.4 percent to tourism, 0.7 percent to industry and 0.4 percent to technology.
Itani noticed, however, that there was increasing interest in investing in IT and industry in 2007 although the amount was not overly tangible.
"Lebanese investors are showing keen interest in agro, food and steel industry," he said.
Itani added that a group of Lebanese businessmen plan to build a $60 million steel factory in Amsheet, adding that this project will employ 400 people.
He added that the Swedish giant company Ericsson recently opened a regional office that employed more than 60 engineers and IT experts.
"This IT project was done through IDAL and we believe that the company plans to launch more and bigger projects in Lebanon," Itani said.
He added that most foreign investors are still eager to complete their projects in Lebanon despite the situation.
"It seems that foreigners have great faith in the country and they realize that things will simmer down once the elections are over," Itani said.
The president of IDAL assured that the UAE tycoon Khalaf Habtoor decided to maintain his large investments in Lebanon despite his early negative remarks about specific laws and taxes.
Habtoor projects, which are the show case of IDAL's achievements, involves a five star Metropolitan Hotel, Habtoor tower and Habtoor theme park.
Itani said many potential investors are adherring to the 'wait and see' policy before making any major moves in Lebanon.
"I don't think the investors will give up on Lebanon because this country has lots of potential. But most of them want to see some kind to stability before making their move," he said.
IDAL intensified efforts to attract investments following the July war.
"These efforts resulted in 5 new projects worth over $123 million being granted fiscal incentives as per the Investment Development Law. Up to late 2006, three other projects worth more than $75 million submitted applications to benefit from IDAL incentives, and they are still under study," a report by IDAL said.
The total amount of projects that have applied for the One Stop Shop program, whether having benefited from the Investment Development Law incentives or still under study, has reached $1.181 billion since the enforcement of that law which began in early 2003, up to late 2006, the report said.
The projects have been distributed over different economic sectors. Tourism had the largest share with 88.2 percent of the total amount. This sector accounts for 15 established projects or projects that have been granted approval.
Beirut
23-08-2007
Redaction
The Daily Star
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