- Advertising Agencies
- Architects

- Banks

- Car Dealers
- Car Rental
- Casinos
- Commerce
- Consulting
- Cosmetology
- Craft

- Data Processing &
Computer Systems
- Decoration &

- Editing
- Elementary Schools
- Engineering &
- Environment / Waste
Management Services
- Express Delivery

- Fashion
- Financial Services
- Food & Beverage
- Furnished Apartments

- Health / Beauty
- Higher & Vocational
- Home Appliances
- Hotels 3
- Hotels 4(A)
- Hotels 4(B)
- Hotels 5
- Hotel & Restaurant

- Industry
- Insurance
- Interior Design /
- Internet

- Jewelleries

- Lighting
- Luxury

- Media
- Music

- Office Equipment /
- Oriental Carpets
- Outside Decoration

- Printing
- Promotional Materials

- Real Estate
- Recruitment
- Restaurants

- Sanitary Wares
- Security
- Services
- Sweets

- Taxi
- Telecommunication &
Mobile Phones
- Transport
- Travel Agencies
- Technical Studies

- Watches
- Water Treatment



Back to archives Back to news
French Version

‘The window of opportunity is closing’ - Saad Azhari of BLOM Bank says reform must come soon (Daily Star)

With GDP growth hitting 3 percent this year, Lebanon’s economic performance hasn’t been bad ­ and that’s why the time for action is now
The confidence in the resilience of the Lebanese economy is still strong despite political bickering among state officials and the controversial 2004 draft budget, according to Saad Azhari, vice-chairman and general manager of BLOM Bank.

Azhari said that the Paris II conference of donor countries held last November gave Lebanon a breathing space to put its house in order.

Lebanon so far received $2.5 billion in soft loans from France, Saudi Arabia, UAE, Kuwait and other countries to help lower debt servicing that erodes 90 percent of the government’s revenues. Bahrain, Italy and Canada are yet to meet their obligations to Lebanon.

He noted that the balance of payments recorded a surplus of $3.4 billion in October. Furthermore, interest rates on deposits and loans in both the Lebanese and dollar currencies went down to reasonable levels. “We had a 13 percent increase in customer deposits and the Central Bank’s foreign currency reserves jumped to almost $12.5 billion, excluding the state’s gold reserves, following Paris II,” Azhari told The Daily Star in an interview.

He added that commercial banks made an important initiative to reduce the burden on the government when it used 10 percent of their deposits to buy two-year Treasury bills at zero percent interest rates.

BLOM Bank, which is considered the largest bank in Lebanon in terms of assets, deposits and profits, was among those banks who gave the government a hand in reducing the burden. “Interest rates on Lebanese pound loans fell by 300 basis points, while dollar loans by at least 100 basis points,” he said.

But according to the vice chairman, the government should capitalize on the success of Paris II by carrying out reforms. He said such reforms include securitization of future revenues of some state-owned companies, restructuring benefits of after-service-indemnities and upgrading the state bureaucracy to make it more productive and efficient.

Azhari said political debates will not hamper reforms in the near future, adding that sooner or later politicians will realize that they have to do something to save the country. “We have seen politicians unified before the convening of Paris II. These politicians know that reforms have to be done,” Azhari said. He added that politicians also understand that “doing nothing will be very unpopular.”

“We have a window of opportunity because the country has a good balance of payment surplus, low interest rates and international support for reforms,” he argued.

Azhari said securitizing the future revenues of state-owned companies will generate good income for the state without giving up these assets to private firms. “I don’t see any reason why the government shouldn’t securitize the revenues of the cellular networks, fixed telephone, the Regie Company and other facilities that are making good revenue.”

Prime Minister Rafik Hariri’s government had pledged to implement privatization or securitization to lower the $32 billion public debt.

But differences between officials this year has delayed such plans. As a result, the budget deficit in the first 10 months of this year dropped to 37 percent only, casting more doubt that the government will be able to meet the 25 percent deficit target by the end of 2003. “Proceeds from securitization or privatization will be used to lower interest rates and eventually debt servicing by considerable levels,” Azhari said.

But Azhari admitted that securitization will not be sufficient if not matched by administrative reforms. “I am pretty hopeful we are going to see structural reforms in the near future.”

Azhari said that mobile phone and fixed telephone networks as well as other independent state utilities have a combined annual revenue that exceeds $1 billion, adding that this amount can be securitized. “Most countries have public debts. Yet it is imperative to check the rise of this debt.”

Azhari said that economic growth was reasonable this year, adding that the nation’s GDP rose about 3 percent.

Commenting on the performance of Lebanese banks, Azhari said that profits of banks this year was reasonable as well. “We can say that our profits were stable.”

He added that banks made 11 percent return from the total capitals that they have and this percentage was reasonable.

According to the BLOM official, a Lebanese bank makes most of the revenues from interest generated income such as Treasury bills. “But this trend is gradually changing as most banks are focusing on non-interest revenues such as fees and commissions,” he said, adding that many banks are developing varied products to remain competitive.

Beirut 24-11-2003
Osama Habib
The Daily Star

Business News
Business Forum
Business Opportunities
Fairs & Exhibitions
Useful Addresses
Currency Exchange Rates
Some Marks
To see in Lebanon
Media of 1stlebanon
Impact of 1stlebanon
Add your company
Press Book
Flowers delivery Lebanon
Flowers delivery Dubai
Oriental food specialty
Lebanese wine
Real estate agency Beirut
Hotel Hamra-Beirut
Car rental
Rent a car lebanon
Reservation for your travel in Lebanon
Association des français de l'étranger
-section Liban
Diamond jewelry Lebanon
Jewelry manufacturer Lebanon
Jewelry watches-Swiss made watches
Diamond Swiss watches
Modern and comtemporary jewelry
Byzantine & Phoenician jewelry
Jewelry creation
Oriental, classical and traditional decoration
Hand made furniture
Construction management Lebanon
Projects development
Shoes manufacturer and distributor Lebanon
Sole agent of Philips & Whirlpool in Lebanon
Web development
Web marketing
Printing press services
Paper products
Insurance company Lebanon
Insurance Lebanon
Rent villas France
Hotels all over Syria
Hotel management company
University Lebanon
Arab Media News