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French Version

Itani charts resurgence of investment in Lebanon

Head of IDAL faces momentous challenges in selling the country amid political uncertainty

Maintaining the flow of investment into Lebanon following the assassination of former Prime Minister Rafik Hariri was not an easy task for Nabil Itani, the head of the Investment Development Authority of Lebanon (IDAL), a government organization that promotes investment in Lebanon.

Rising tension among anti-Syrian opposition groups and the government at that time, with hundreds of thousands marching in the streets of Beirut calling for the withdrawal of Syrian forces, created a feeling that the country's future was uncertain at best.

"Naturally, Lebanese and Arab investors were stunned by the news of Hariri's death and decided to freeze temporarily their investments in Lebanon until the picture got clearer," Itani recalls, adding that confidence in the country was quickly restored as more investment enquiries poured into IDAL's offices in Beirut's Central District.

He said that the first five months of 2005 witnessed a remarkable growth in business as total investments executed by IDAL reached more than $282 million. This figure, he said, may even hit $365 million in the coming months.

Itani stressed that Hariri's family played an important role in reassuring Arab investors that Lebanon was a safe place to invest.

"Some of Hariri's members lobbied hard in Lebanon and outside to improve the image of the country and this campaign was successful by all measures."

Itani, a respected architect, was named the new president of IDAL two months before the assassination of Hariri.

Created by a government decree in 1994, IDAL was seen as an ideal answer to grievances of potential investors who were frustrated with the bureaucracy in Lebanon's public sector.

Arab investors such as U.A.E. tycoon Khalaf Habtoor have complained in the past that dealing with red tape in Lebanon was stifling business and investments. Briberies and kickbacks became part of the unethical methods used by desperate investors to get the stamp of approval for projects that would create jobs in Lebanon. To make matters worse, investors often need dozens of signatures and close connections with influential politicians to remove the last stumbling blocks before beginning a project.

In 2004, IDAL, thanks to the one-stop-shop concept in which approval from various government agencies could be gained in a centralized office, directly and indirectly processed more than $1 billion worth projects.

"This figure does not include other foreign direct investments that were processed by other public departments. Lebanon was ranked the third country in the Middle East in the size of investments," Itani said.

He added that his architectural background and membership in the Order of Engineers proved to be a great asset to IDAL.

"Thanks to this training, I can judge if a proposed investment project needs any further study by the Urban Planning Department.

Itani said that most of the projects submitted to IDAL meet all the required criteria.

Since its creation more than 14 years ago, IDAL has processed $492.2 million projects that created more than 2,000 full time jobs.

Itani indicated that Habtoor's Metropolitan Hotel, City Center and Habtoor Land, one of the largest theme parks in the region, is the culmination of IDAL's success.

"This project alone cost more than $270 million and helped created over 800 jobs in the Lebanese market."

IDAL offers tax incentives to any project valued at more than $14 million and that creates jobs in Lebanon.

More than 72 percent of the projects covered by IDAL focused on tourism and services, an indication that Lebanese and Arab investors view Lebanon as a prime vacation spot.

"Industry and technology are getting some attention from a number of investors but not to the same extent as tourism," Itani explained.

According to an IDAL chart, agriculture got zero percent of the projects.

"I think agriculture is of national importance and we hope to submit a plan to the government soon to induce investors to pay more attention to this vital sector."

Itani said that IDAL has recently approved a project to open a "smart card" plant to make multi-purpose bank cards in Lebanon at a cost of more than $6 million.

He added that Lebanon has abundant qualified human resources especially in the field of technology and any investment in the IT sector would be a wise move.

Itani said that the government did not abandon plans to create a technology zone in the south of Beirut.

"We had some misunderstanding with the municipality in Jieh, south of the capital, but I believe that this problem will be sorted out soon."

Itani was upbeat about the future of Lebanon but urged the government to maintain law and order in the country.

"Security and stability are very crucial issues for any investor. In addition, the government must speed up reforms and the privatization program because they will attract more investments."

In the Family: married with three girls, two boys
Last Vacation: Spain
What was the last book you read? “I usually read books on investments”
What car do you drive? Cadillac

Beirut 22-08-2005
Osama Habib
The Daily Star

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