Lebanon

Country Strategy

The new Government's policy agenda will focus on achieving economic growth and enhancing revenue collection, given the limitations inherent in reducing the budget deficit through a reduction in public spending. In support of the above strategy, the Government will implement the following measures:

1. The Government will develop and implement a privatization program with special emphasis to be given to the privatization of the telecommunication and electricity sectors.
2. The Government will strive to modernize and rationalize the legislative and regulatory framework, as it is cognizant of the major constraints on economic growth and development imposed by the existing regulatory framework.
3. The Government will implement a comprehensive strategy for trade liberalization and will implement policies that would maintain openness in the economy and further liberalize trade with the European Union, the Arab countries and facilitate accession to the WTO. Towards this end, the Government in November adopted an across the board reduction in customs duties, approved an open skies policy and passed a decree to simplify customs procedures and controls.

Indeed, the implementation of the Government's privatization program and the successful realization of the EU Association Agreement and the WTO Accession will be contingent on the establishment of an effective competition and regulatory institutions. Hence, the Government during its term will aim at strengthening the regulatory functions and provide an institutional framework to implement anti-monopoly policies.

In tandem with the above, the Government will strive to provide support to the private commercial sector as a means to both improving the competitiveness and increasing the productive capacities of the Lebanese businesses in particular small and medium sized enterprises (SMEs) to contribute to the economic recovery and growth of the country. It will also seek to develop the high tech sector and stimulate the IT entrepreneurship by providing a supportive environment for the promotion of IT activities.

Most relevantly, the Government will endeavor to create an effective public/private sector partnership by establishing sound working relationships with business, industrial and professional organizations and non-government organizations. It will encourage increased dialogue between the public institutions and the civil society and seek to raise public awareness and understanding on several key issues through education and information.

In light of the Government's overall objectives, the Ministry of Economy and Trade will implement the following strategies:

In the area of trade policy: The MOET is to improve the trade information base and modernize the trade infrastructure by simplifying the trade process and promoting the electronic transfer of trade related information. Moreover, in view of the importance of accession to WTO and of joining the Euro-Mediterranean Free Trade, the MOET will focus on building the institutional capacities of its trade department for the implementation of negotiations including coordination of assistance and support.

In the area of insurance sector: The MOET will focus on three main objectives that will establish the conditions for the development of an adequately capitalized and competitive industry while at the same time providing for the highest quality services at the best available prices for consumers. First, reorganizing the functions within the Ministry. Second, developing new laws and regulations needed to efficiently regulate the insurance sector. And third, consolidating the institutional capacities for efficient sector supervision through the adoption of modern control procedures by the Insurance Control Commission.

In the area of competition regulation: MOET will provide the institutional framework to implement anti-monopoly policies that are coherent with the EU Association Agreement, WTO Accession and other open trade agreements. It will introduce new legislation that promotes competition and favors private sector innovation and investment. The MOET will be drafting the new competition policy and law and will consider various institutional arrangements for competition regulation.

In the area of consumer protection: Modernization, reorganization and strengthening of the consumer protection function that would lead to improvements in the delivery of services to consumers and small businesses is a high priority for the MOET. The reorganization could include fundamental reform such as the separation of the function to a semi-autonomous Consumer Protection Agency, with improved capacity and performance and more explicit levels of responsibility and accountability. Indeed, the ability to monitor and enforce quality and safety standards will become especially important as Lebanon accedes to international agreements on progressively more open trading arrangements.

In the area of real sector growth: The MOET will aim at strengthening the partnership of the Ministry with the private sector by formulating an effective coordination network and increasing collaboration on several key issues particularly WTO and consumer protection. Moreover, MOET will strengthen the institutional framework for SME's and explore ways to increase their participation in international trade by helping them address specific barriers to develop and export effectively. It will also promote electronic commerce, provide incentives for growth in the IT sector and set up the appropriate framework for the establishment of business incubators and start-up financing schemes.