Lebanon can emerge from an economic crisis if it acts now
Common sense suggests that for a country’s economy to thrive, its development strategy should first look at reducing the cost of doing business at home and also focus on how to develop the workforce and make its resources more competitive.
While the Lebanese are excellent entrepreneurs and great at doing business, the country lately is suffering from a severe economic crisis. Lebanon has amassed so much debt that it has become the world’s third most indebted country.
Recently, the advisors of the global consulting firm McKinsey & Co drew out a wide vision for the Lebanese economy, advising the leaders on how the country can become a hub for wealth-management and investment banking and emerge as a provider of medicinal cannabis.
The consulting firm’s report offers a roadmap to Lebanon, which should be considered since the international community has promised the small country $11 billions in grant and soft loans in April.
The plan offers quick solutions such as getting involved in the reconstruction of both Iraq and Syria, investing in the tourism sector and legalising Lebanon’s illicit cannabis farms for medicinal exports.
According to Lebanese Minister of Economy and Trade, Raed Khoury, the Syrian reconstruction market represents great opportunity. It is worth more than $300 billion, and offers more opportunities in terms of reconstruction of houses for the thousands of refugees who will return to Syria.
Regarding the tourism sector, the McKinsey plan suggests developing a strategic vision focusing on the rise of tourists from 16 countries (European, Arab and those hosting a large Lebanese expatriate community).
It also focuses on the development of tourism services in three regions that are yet to be determined and talks of developing ecological, religious and medical tourism.
Moreover, the country, the report suggests should tap into its large population residing outside the country. The Lebanese diaspora is estimated to be around 14 million people, which is far more than the domestic population of the country at around four million.
McKinsey’s plan is to explore and evaluate this important link between Lebanon and its diaspora in order to benefit from expatriates’ experiences and skills and facilitate the entry of their capital for productive investments.
Lebanese President Michel Aoun has expressed his support for this plan, saying its implementation will be the responsibility of the next government.
This is not the first time that the consulting firm has offered an economic plan for a country. McKinsey has developed economic reform plans for several Arab countries, including the ambitious ‘Vision 2030’ for Saudi Arabia.
It’s important that the Lebanese government acts fast. The debt crisis in Greece drove it into a huge mess. After Greece announced in 2009 that it had been understating its deficit figures for years, it was shut out suddenly from borrowing in the financial markets. By the spring of 2010, Greece was staring at bankruptcy.
The Lebanese government can save the country from such a situation if it acts now.
Christiane Waked is a risk analyst. She is the former Press Attaché of the French Embassy to the UAE, and has worked
as linguist and analyst at the French Interior Ministry
The plan offers quick solutions such as getting involved in the reconstruction of both Iraq and Syria, investing in the tourism sector and legalising Lebanon’s illicit cannabis farms for medicinal exports