|Foreign investment in Lebanon remains firm
|The government sponsored Investment Development Authority of Lebanon (IDAL) has processed foreign investment of more than $312 million in the first five months of 2005 despite the murder of former Prime Minister Rafik Hariri, the head of IDAL said. "We are doing quite well despite the assassination of Hariri and the ensuing political developments," Nabil Itani told The Daily Star.
He added that IDAL is currently studying investments worth $200 million.
Itani added that in 2004 alone, foreign direct investment in Lebanon reached $1.05 billion, one of the highest records in the country's history.
IDAL was instrumental in removing much of the time consuming paperwork and redtape for foreign investors.
In 2001, the government of former Premier Hariri authorized IDAL to offer the One-Stop-Shop service which allowed foreign investors to apply to the agency for any investment project.
Under the One-Stop system, IDAL has the authority to supersede public administration, agencies and municipalities for an accelerated issuance process of permits and licenses required by various public sectors.
Itani said that 57 percent of the investments processed by IDAL involved tourism projects, with the rest divided among food industries and the IT sector.
Following the end of the war in 1990, Lebanon attracted many Arab investors who were keen to put their money into tourism projects. Numerous five-star hotels have been built in Beirut and the mountains since, and more continue to built.
The terrorist attacks of September 11, 2001, and the ensuing events, along with tighter security measures in the U.S. and Europe, have encouraged more Arab companies to make large investments in Lebanon.
Gulf Arabs now represent the bulk of investors in Solidere's Beirut Central District, and have brought land prices to their highest levels.
Itani admitted that the assassination of Hariri created a degree of panic among investors but none of them pulled their investments from IDAL.
"The government and Hariri's family played a big role in restoring investor confidence in Lebanon," he said.
Itani noted that political stability is an important condition for maintaining investor trust in the country.
"Once the elections are over, investors will feel more relaxed about the situation and will resume their business activities," he added.
Solidere A and B shares jumped to more than $10 per share two days ago for the first time in several years, reflecting the positive mood of investors.
"Solidere has become the barometer of investors. If stock prices goes up then this means that investors are buying land from the company but if prices goes down by more than 30 percent then investors are very concerned by the situation," one broker told The Daily Star.
To encourage investment, IDAL is offering tax incentives to any project that creates more than 250 jobs.
"IDAL [recently] granted a license for a $6 million industrial plant that produces processed food in the Bekaa region. We hope to see similar projects in the future,"
Itani said. He added that IDAL is offering incentives to any software company that invests in the IT sector.
The Daily Star