Special Advertising Supplement LEBANON Government? Who needs a government? Well, of course, it would help. But in a country whose greatest natural assets are its highly educated workforce and generations of entrepreneurial tradition, sectors as diverse as finance, tourism, education, construction and medicine are shrugging off the political upheaval as best they can and pushing ahead with rebuilding the economy. Special Advertising Supplement The triumph of a lifestyle Why would one of the world’s smallest countries, mired in political crisis, expect to grow more than the world’s major economies this year? Because it’s Lebanon, where a lifestyle of optimism and entrepreneurship always wins out. Perched like a timeless jewel on the shores executives were hoping the administra- of the eastern Mediterranean, Lebanon tion would move ahead on key issues, in- is where the world’s trade routes have cluding petroleum exploration, electricity crossed for at least 3,000 years, ever since and highways. Even if it doesn’t, the Leba- the Phoenicians invented what we now nese people won’t sit around waiting. call globalization. Today, despite seem- In general, the Lebanese business com- ingly endless political wrangling, business munity has become pretty used to stepping leaders in the glittering capital city of Bei- in and doing what’s needed. Electricity is a rut are looking firmly to the future. great example: the state-run utility simply True enough, investment and business can’t maintain a reliable supply. “People activity slowed somewhat in early 2011 as have initiative; it doesn’t have to be a bril- investors waited for politicians to resolve liant idea, but they have the initiative, say, aha | www.meedosite.com | aha a dispute that left the country without a to ship in generators, run wiring through t eedo eedo government from January to mid-June. a small neighborhood and charge houses m Earlier this year, the World Bank was perhaps US$20 a month,” said Tarek tipping Lebanon to grow by as much as Khalifé, chairman and general manager Lebanon in numbers 4.8 percent in 2011, but when the political of CreditBank. Lebanon measures just 10,230 km2, making it smaller uncertainty dragged on, the Fitch Ratings “When there is no system, anarchy is than all u.s. states except DeLaware anD rhoDe isLanD, agency chopped its own prediction for the system. So, when you look at any neigh- or just haLf the size of waLes. following, some key facts: Lebanon’s GDP growth to just 2.5 percent. borhood, you find people with satellite TV, • POPuLatiOn That’s a far cry from the 7 to 9 percent electricity, water, and so on, sustained by 4.14 million in 2011; 87% urban private entrepreneurship.” rates of the three previous years, but still growth rate: 0.24% per annum better than the World’s Bank’s prediction This can-do, get-it-done approach has • GOvernment of 2.1 percent for countries in the euro kept the Lebanese economy bouncing republic; suffrage excludes women without schooling area. Nevertheless, Fitch did not down- back — and growing — through countless Head of state: president michel suleiman (since may 25, 2008) grade the country. political squabbles. It also powers one of Head of government: prime minister najib mikati “Lebanon’s … substantial foreign ex- the Middle East’s most vibrant tourism (since june 13, 2011) change reserve buffers, lower debt levels sectors, built around dozens of luxury ho- • LanGuaGes and reduced interest costs, relative to the tels, restaurants to rival those of Paris and arabic (official);f rench, english, armenian also spoken previous decade, mitigate the downside a casino that glitters over the city at night. • CaPitaL Beirut: 1.9 million (urban area) risks to political stability, growth and pub- Much of Beirut was damaged during the • CurrenCy lic finances in 2011,” Fitch said, adding that 1975-90 civil war, but that was followed by Lebanese pound (LBP); US$1.00 = LBP1,507 moves in the middle of the year to form a massive rebuilding. More recently, the city Inflation: 3.7% (2010 est.) new government under Najib Mikati, “a has been transformed by a new construc- • GDP business-friendly politician,” could im- tion and property boom, albeit one that US$39 billion (official exchange rate, 2010 est.) prove the economic and fiscal outlook. has now slowed. Luxury apartment blocks Imports: oil, cars, medical supplies, clothing, While permanent political peace was sell well both to local residents and the consumer products far from guaranteed with the formation huge Lebanese diaspora, many of whom Exports: jewelry, consumer goods, fruit, tobacco, of Mikati’s new government, business have leveraged their native Lebanese flair ornamental stone 2 Lebanon Special Advertising Supplement for trade and business into success abroad, Resilience: a good thing, but … particularly in Europe and the Americas. Investors also see other areas of oppor- Resilience: defined bym erriam-webster as “the ability to “macroeconomic policy discipline and strict oversight of the tunity. International franchises have become strong, healthy, or successful again after something financial system.” moved into the country, while Lebanese bad happens; an ability to recover from or adjust easily to bankers point out the pluses: brands are franchising abroad. Higher misfortune or change.” • “the banking sector has a lot to do with resilience, the capac- education is booming, and a range of pro- normally, resilience is a good thing. but some people argue ity to overcome major problems.” – freddie baz, bank audi fessions are finding that Lebanon offers that the Lebanese have become too resilient: they’re now so • “Lebanese banks are very resilient; we learn very quickly.” – an ideal base for operations within an adept at carrying on despite political upheaval that there’s less anwar ali jammal, jammal trust bank extremely prosperous region. Beirut is a pressure to actually resolve problems. • “Lebanon as an economy is resilient for two major reasons: place where the various cultures and reli- the idea of resilience has been much in vogue since 2009, first, the entrepreneurial spirit of the private sector, not the gions that swirl around the Middle East when the international monetary fund praised “the remark- public sector; the second is ‘belongingness,’ which is more can coexist more easily, making it a favored able resilience of the Lebanese economy in the face of the intangible – the will of the people to maintain this relationship location for expat employees. global financial crisis” and commended authorities for their with their country.” – tarek khalifé, creditbank Lebanon 3 Special Advertising Supplement Lebanese banks stretch their wings Bank auDi one of Lebanon’s two largest banks in terms of customer deposits and total assets, with origins in a family-owned foreign-exchange house established in the early 19th century. won the 2009 euromoney “best bank in Lebanon” award. Largest shareholder is Deutsche bank trust company americas. BLOm Bank Lebanon’s financial institutions have shares, and we discipline credit for real one of Lebanon’s two largest banks; founded in 1951; learned how to cope and profit despite estate. All this improved confidence, full name banque du Liban et d’outre-mer, with 69 occasional political unrest. This has and cash inflows from Lebanese citizens branches and affiliates in Lebanon and 85 abroad. made the country’s financial sector working overseas increased. Bank depos- named “best retail bank in the middle east” and “best a byword for security amidst the its grew 10 percent by 2010, and we ex- investment bank in the middle east” for 2010 by the confusion, giving banks a sound base pect them to grow another 5 to 7 percent banker awards. from which to expand internationally. this year.” Early signs in 2011 were that deposit ByBLOs Bank growth was slowing down, possibly to founded in 1950; 75 branches in Lebanon; present t the heart of this success lie below Salameh’s projection, as investors in armenia, belgium, cyprus, france, iraq, nigeria, generations of cautious financial reacted to the country’s most recent po- sudan, syria, the united arab emirates, the united A management. It’s the kind of old- litical confusion. However, there were kingdom and the Democratic republic of the congo. fashioned, oak-counter banking where also suggestions that Lebanese banks Listed on the London stock exchange since 2009. trust is everything, bolstered by sensible might yet profit from unrest in neigh- government regulation and the modest boring Syria, offering Syrians a familiar, BankmeD levels of leverage that many far more nearby safe haven for their investments. established in 1944; now the country’s fourth-largest adventurous institutions in the United Short-term difficulties aside, Leba- bank, with 10 percent market share, 51 branches and States or Europe would have laughed nese banks look set to continue their assets of us$10 billion; has a presence in cyprus, at — until, that is, the 2008 financial long-term regional expansion. According turkey and geneva; largest shareholder in solidere, a crisis came along and excessive leverage to the Association of Banks in Lebanon, major beirut real estate developer. suddenly fell out of fashion. its 68 member institutions have more “Lebanon did not suffer like many than 200 branches in subsidiaries and FransaBank other countries during the financial sister banks in 33 countries, plus a large one of the country’s oldest banks, established crisis, because we have a very conser- network of correspondents. There is also in 1921, with majority local ownership and minority vative banking sector,” explained Riad a substantial local presence of branches international participation. fransabank ended 2010 Salameh, governor of the Lebanese cen- and representative offices of foreign with 107 branches and 40.2 percent growth in net tral bank.