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French Version

LIA chief praises cut in port export fees

Fadi abboud says move will make Lebanese industries more competitive in region

The head of the Lebanese Industrialists Association (LIA) said the government's decision to significantly cut the export fees through the port will boost Lebanese industries and make them more competitive in the region.

Speaking to The Daily Star, Fadi Abboud said an official follow-up committee was formed to implement the government's recent decision to reduce export fees per 20-foot containers from the current price of $500 to around $200.

Abboud added the decision included reducing the weight of bureaucracy on exporters by facilitating paperwork procedures and moving from 23 steps to four steps needed for an industrialist to export his products by sea.

Cutting export fees is seen as a major victory for local industrialists who have been complaining that the sector may fall apart if the government fails to come up with a rescue plan.

Detailing the steps leading to export cuts, Abboud said the government decided to cancel customs fees for maritime export as well as unify port costs. All the costs of examining the products by the customs will be also paid by the port, he added.

The association met recently with representatives from the Finance Ministry, the Economy Ministry and the Industry Ministry as well as customs officials to discuss implementing this measure.

Industry Minister, Pierre Gemayel, said the price reductions would become effective as of next week (after the first administrative meeting). Gemayel added that this measure would benefit both the government by improving the economy and industrialists by strongly supporting export.

Despite voicing his belief in Finance Minister Jihad Azour's strong will to support Lebanese business and push needed economic reforms, Abboud criticized the fact that the follow-up committee did not include any representative from the exporters.

"We have been waiting helplessly for these export cuts to become concrete for many years," he said, adding that export currently involves a lot of corrupt practices, namely bribery.

This measure will create important competition with respect to exporting by land, according to Abboud. CMA, a Lebanese shipping company, the third largest in the world, has announced its readiness to ship 40-foot containers to Jeddah in Saudi Arabia for $700 which is the same price for transporting the same container by land, he said. He added that this would make Lebanese products more competitive regionally.

Abboud explained that currently 60 percent of Lebanese exports are transported mainly to other Arab countries by land across the Lebanese-Syrian borders.

Encouraging maritime export is also important for national security reasons. Last year, Syria imposed a partial blockade across its frontiers with Lebanon, preventing Lebanese products for several weeks from crossing the borders and causing great losses for Lebanon's agriculture and economy.

Asked about the high cost of energy, Abboud said that the association of industrialists suggested a "total decentralization of electricity for the past 3 years," a solution which will be presented to the government soon.

The bold plan includes closing down for the next three years the Electricite du Liban (EDL), which costs the Lebanese government around $800 and $900 million yearly, Abboud said.

Half of this money could be used to subsidize diesel prices allowing private contractors to generate smaller amounts of electricity for each municipality, he said. With the subsidies, the private sector will be able to provide a better quality of electricity for a lower price of 5 to 6 cents per Kilo Watt, according to him.

Meanwhile, the government will have enough time to come up with a new plan for EDL and make sure that natural gas is available as an energy source, he added.

Other challenges still face Lebanese industry today, especially with other Arab countries reluctant to respect regional and bilateral trade agreements, making Lebanese exporters less competitive than their Arab counterparts.

"Nothing is being done by the government to demand that Arab countries stop using various tricks to reduce the entry of Lebanese products to their land, while increasing their export to Lebanon," Abboud said.

Beirut 16-01-2006
Raed El Rafei
The Daily Star

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