Industry is nation’s only real future
Manufacturing will determine if we are to join the ranks of the
First World or remain part of the Third
Raja Habre (Daily Star)
We face many challenges at this critical juncture, particularly in Lebanon. We need to review industrial policies in the country, and more importantly, to assess and evaluate their contribution to economic growth. Because of a confluence of events such the formation of a new government, our continued commitment to Lebanon’s national aspirations, and fast-paced developments in the region and the world, this is indeed the right time for the Lebanese to take stock, to set new priorities, and to chart the road for a future of growth, a future of prosperity. On the other hand, the challenges are many. Most important among them is the transformation in the global economy, whose impact on Lebanon’s growth prospects is not easily determined. This transformation is particularly true of the manufacturing sector, where the world is split in two: One part relies on knowledge, engineering, high added value, and high skills to produce goods. The other part is stuck in labor-intensive, low added value, and low skill industries.
To illustrate, one part is rich, while the other part is poor. Where does Lebanon belong? And what is our view of where we stand? We will try to answer these questions. As for other challenges, Lebanon is preparing for WTO accession and the Euro-Mediterranean Partnership Agreements. On the Arab front, we are continuing efforts aimed at expanding the market share of Lebanese exports. The mission statement of the Association of Lebanese Industrialists can be summarized in a few words, borrowed from The Economist magazine: “Manufacturing brings more growth, better-paid jobs, fatter export earnings, and greater technological progress than any other economic activity.” Further, we recognize that “manufacturing is becoming a genuinely international affair. The fancy work gets done in rich countries by skilled workers, the simpler parts elsewhere in the global supply chain.” (The Economist, June 20, 1998)
In light of these developments, we believe that the middle ground ­ ideal as it may be in local political and social discourse ­ is simply not an option in manufacturing. We either move up the ladder of quality, added value, and technological development, or we will be pushed down by those who are making determined efforts in this direction. The Association of Lebanese Industrialists will strive not to allow our economy to be pushed down. Our goal remains: A globally-competitive, export-oriented manufacturing sector.
ALI’s 1,000 members represent, as far as we are concerned, one thousand points of light, illuminating Lebanon’s path towards higher living standards, growth and prosperity. This is not poetry. Indeed, it is a sign of our commitment and dedication to the uplift that only manufacturing can bring about. In addition, the values inherent in the manufacturing process, such as high skills, education, scientific endeavor, continuous training and life-long learning, technological innovation and advancement, and employment-generation, make our sector uniquely qualified to lead the charge forward.
In the 1990s, as a result of a changing institutional environment, namely improving governance and better governments, in addition to our exposure to international standards of economic management, ALI began to put more effort and resources into policy formulation and policy recommendations. This research improved our ability to communicate with the government and other partners. It also made a contribution to the ongoing debate on our economic goals, particularly those related to the manufacturing sector. ALI and its constituent bodies, particularly the specialized committees, submitted policy recommendations in social affairs and social security; government services; performance measurement in industry; costs of production; long-term financing; university, vocational and technical education standards; export promotion; research and development, among others.
As for Lebanon’s human potential, ALI has taken a series of steps, both practical and policy-oriented, to ensure that our graduates, employees,  and civil servants possess the necessary skills to be competitive in the knowledge economy. This means high quality education at all levels, as well as quality training programs.
Accordingly, our human resources must be connected to the needs of our economy and relevant to its future growth. In addition to the above, ALI has participated in numerous conferences, seminars, expert group meetings, and activities, for the purpose of learning, exchanging ideas, setting recommendations, and formulating projects, all geared towards achieving our goals.
True to our history and heritage, we find opportunities in all challenges. In this regard, we believe that the foundations we have built for a globally competitive manufacturing sector are fairly sound. The building blocks for these foundations include investor-friendly policies and strong communications channels with our partners in the public sector. On the micro level, the process of continuously adopting new technologies and constantly seeking improvements to gain greater efficiency and higher quality is well established. As for the public sector, ALI will continue seeking to convince the government of the importance of implementing policies designed to support both local manufacturers and potential investors. These measures include, as a minimum, trade efficiency (specifically bureaucratic procedures), industrial zones, and export promotion initiatives.
Our priorities, in this regard, coincide with the package of “quick measures” that Minister of Industry George Frem recently unveiled. The package addresses directly long-standing issues of the cost of production. If implemented in the short term, these measures will lead to significant improvements in the competitive capabilities of Lebanese manufacturers. In the medium term, ALI is confident that Frem’s comprehensive plan for industrial renewal, once accomplished in early 2001, will set the foundations for the long-term, sustainable growth of the manufacturing sector. The  plan ­ probably for the first time in the history of industrial policies in Lebanon ­ sets far-sighted goals and targets for the following: industrial growth, share of GDP, export growth, and job creation. They are all achievable, if the government has the will. But we cannot be, and should not be totally satisfied with these achievements. The truly amazing pace of change in the region and the world leaves no room for complacency.
Look at Syria, where the new leadership is determined to integrate the country into the world economy. This has mandated a policy of aggressively passing laws intended to simplify procedures and attract new investments. Witness how Jordan, Egypt, the UAE, Tunisia, and Morocco, among others, are in hot pursuit of growth, development, investments, and dreams of prosperity. These major changes in the Arab world present Lebanon with good opportunities. But we need to be more dynamic and determined in negotiating trade agreements, designed to redress any imbalances in trade flows in Lebanon’s favor. Lebanon is a small country indeed, but it carries big hopes, aspirations, and the pride of a people steeped in valor. These values should be reflected in our negotiations with our trading partners. So far at least, we have tended to appease for the sake of some larger political benefit.
Lebanon’s single-minded pursuit of improved trade relations with the Arab world will generate the required momentum to conclude the Euro-Mediterranean Agreements and the accession to the World Trade Organization. Despite the differences between these two agreements, in the matter of rights, obligations, time frame, and expected impact, we look at them as potentially beneficial. But, this is provided that we do not succumb to any sort of pressure. Our guiding principle should be: Serving Lebanon’s Long-Term Economic Interests. Having said all that, it is tempting to end on the positive accomplishments that I discussed above. On the other hand, I cannot resist asking the question that an economist once asked: If we are so intelligent, how come we’re so poor?
In other words, why is it that with Lebanon’s supposed policy achievements, we still find that we have attracted very little foreign direct investment, that all our economic indicators are down, that the middle class is demolished, and that poverty, misery and unemployment are increasing? Even more worrying, why have we failed to attract internal, expatriate Lebanese, and Arab investments? Why is it that quality of life issues, so important for attracting investments, are still way down on the list of priorities? Why is it that with all the meetings, workshops, and projects, do we find that few of our goals have been met? ALI realized a few years ago, that culture ­ not any particular culture (Eastern, Western, or otherwise) ­ is at the root of all economic and social success. That is why we began to address the issue in our conferences. We can do wonders in the policy and investment areas, but in
the absence of cultural “fortifications,” our accomplishments will neither flourish nor last. Culture is the foundation for sustainable development. According to our view, cultural values can be chosen either by society or by the political leadership. Actually, they should be at the core of political discourse. Needless to say, cultural values must not be imposed or imported. If we take education, ethics, integrity, hard work, conscientiousness, respect for the law, among others, they are all necessary for a modern economy and they have no ethnic implications attached to them. Can they be promoted by civil society without threatening any of our sensibilities? On the other hand, premature celebrations of success, exaggerated claims of achievement, and complicit flattery and patting on the back ­ standard operating procedures, it seems ­ are all detrimental and ethnically neutral cultural values that lead to mediocrity. As Edmund Burke said, “Nothing is so fatal to a nation as an extreme of self-partiality.” Which means, as far as I am concerned, “let the results of our work speak for themselves, without hype, spin, and exaggerated, delusional boasts of grandeur.” I do not belittle the efforts that have been exerted by many people and organizations over the last 10 years. But relative to the breath-taking progress around us, humility and hard work are occupational necessities.
Raja Habre made the above remarks on behalf of the Association of Lebanese Industrialists at an ESCWA Expert Group Meeting in Amman earlier this month
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