1st Free and Special Economic Zones Summit Foreign Direct Investment (FDI), trends, goals and ambitions This forum aims to analyse the strengths and weaknesses inherent in the Mediterranean region and to establish and action program in this specific area. Summit organized by ASCAME and FEMOZA

1. Forum organized by:
Session 3: Session: The role of Logistics and Free and
Special Economic Zones attracting FDI
Hussam Edine Kobayter
26th of November 2014
Casa Llotja de Mar, Barcelona

2. Outline:
I.North Lebanon and Tripoli
II.Main obstacles to doing business in Tripoli
III.What is a Special Economic Zone
IV.SEZ in general and Tripoli in particular
V.Advantages of a Special Economic Economic Zone in Tripoli
VI.Possible location
VII.Conclusion

3. I. North Lebanon and Tripoli (1/2)
 Lebanon’s history has been unfair to its Northern region. Prior to the
70s, Tripoli was playing a key economic role but the post war and all
what followed from occupation and disturbances have weakened the
role of the 2nd
Capital of Lebanon
 North Lebanon is the 2nd
biggest Province in Lebanon with ≈22% of the
population
 Focus is normally on Beirut and Mount Lebanon in terms of FDI
(Foreign Direct Investment) and domestic investment

4. I. North Lebanon and Tripoli (2/2)
 Tripoli is densely populated and has a high unemployment rate, but
with lot of assets, potential, and a strategic position and importance for
Lebanon in terms of:
 Political stability: Fragile community with weak government capacities
 Transport: Major links with Syria, the Gulf and Iraq
 Energy Supply: Fuel and gas pipelines coming from Syria, the Old
Refinery, the Major Electricity plant in Lebanon, etc.

5. II. Main obstacles to doing Business in Tripoli
1. Telecom: Weak cellular network and slow internet connection
2. Electricity: At least 8 hours/day electricity blackouts
3. Security and Political risks: The disturbances in the Middle East and in the Levant
especially, are having a direct effect on the city and its stability
4. Qualified workforce: Most of the qualified workforce is fleeing the country or
moving to Beirut where there are better opportunities.
5. Distance from Beirut: Although Lebanon is a small country, and the 85 km
distance between Tripoli and Beirut might seem short, the heavy traffic
congestions make the trip quite long from Beirut to Tripoli.

6. III. What is a Special Economic Zone
A Special Economic Zone (SEZ) is a geographical region that gets special fiscal and
sector policies, and freer economic and other laws than the country's national laws.
The realisation of the above mentioned means the creation of a good environment for
a SEZ.
A broad range of more specific zone types come under the 'SEZ’, including: Free
Trade Zones (FTZ), Export Processing Zones (EPZ), Industrial Estates (IE), Urban
Enterprise Zones and others.
Typically the goal of such zones is to increase foreign direct investment in the country,
by attracting foreign investors.

7. IV. SEZ in general and Tripoli in particular (1/2)
The number of SEZ worldwide increased dramatically from the 70s until
today
Governments used to develop these zones, but since it needs a lot of
capital expenditures it started involving the private sector in it to inject funds
and share the risk
The government is responsible for developing offsite and private sector
onsite
Expecting 3,000 jobs directly related by the SEZ

8. IV. SEZ in general and Tripoli in particular (2/2)
 The multiplier of indirect job creation of SEZ is usually 1.5 to 2
 The idea is maximising the leasing area to almost 80%
 24/7 electricity is a must to attract investors so a plant or energy facility
should be built inside the zone
 Investing in Lebanon doesn’t need a local partner which is an
advantage not available in the rest of the region

9. V. Advantages of a Special Economic Economic Zone in Tripoli
(1/2)
The Tripoli Special Economic Zone (TSEZ) will be mostly industrial with
focus on: Services, logistics, storage, which has fiscal incentives.
TSEZ is of a great potential to investors despite its social, political and
labour issues. It has:
 Flexible labour politics (1 Lebanese for every 1 foreigner and no
need to register in National Security Fund)
 Lots of foreign workers (50%)
 No custom duties except for goods not entering Lebanon

10. V. Advantages of a Special Economic Economic Zone in Tripoli
(2/2)
 No Corporate tax or personal income tax for workers in the zone
 No minimum wage
 No taxes on issuance of shares or bonds by companies inside
the TSEZ
 Work permit facilitated
 No tax on investments greater than $300,000
 Creating at least 5,000 jobs directly and indirectly

11. VI. Possible Locations (1/2)
1) Tripoli Port
 The SEZ would be located between Tripoli Port and Nahr al Bared.
 50 hectares limitation on this government owned land
 Not equipped
 Surrounded by polluted activities, so the environment is not clean which
limits the type of industries (no pharma, textile, etc.)
 Exhibition in the Rashid Karame Int’l Fair can be held in support of the
TSEZ, because of its proximity.

12. Tripoli Port
TSEZ

13. Located at 1 km from
Rashid Karame Int’l Fair

14. VI. Possible Locations (2/2)
2) Rene Mouawad or Kleyate Airport
 Strategic location
 Land is cheaper but privately owned, so needs to be purchased
 Ability to expand the zone and double its size.
 It is further away from the city (20 km), which reduces its chances of
succeeding (historically speaking)
 Cleaner environment so more types of industries can be developed in the
zone.

15. Rene Mouawad Port

16. VII. Conclusion
There are a lot of challenges for the TSEZ, but despite all the issues that might face
the creation of a SEZ in Tripoli, this project seems to solve some of the economic
problems the city and country are facing:
• Creating an Industrial Zone in Lebanon
• Creating jobs directly and indirectly
• Attracting FDI
• Might help in reducing the political tensions in the city
A zone can succeed only if there is a real governmental and political will, a concrete
set of reforms, industrial and educational policies as well as support.
The existence of many SEZ around the world can help us in answering the challenges
and questions surrounding this project, in order to ensure its feasibility and success.

17. Sources:
•“Lebanon's economic zones”, Middle East Business Intelligence (MEED),
August 2013
•"The Tripoli Special Economic Zone: Piloting Public Private Partnerships
for Economic Growth in Lebanon”, Sateh El-Arnaout, World Bank, November
2011
• “Tripoli Special Economic Zone Feasibility Study Project”, USAID,
December 2010
•“Special Economic Zone”, Princeton University and Wikipedia,
http://www.princeton.edu/~achaney/tmve/wiki100k/docs/Special_Economic_Zone.html

18. Hussam Eddine Kobayter
President
Rashid Karame International Fair, Tripoli – Lebanon
Email: PRESIDENCY@LEBANON-FAIR.COM
Thank you for your attention