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Regional Transformation and its Implications on Economic Freedom in Lebanon
Regional Transformation and its Implications on Economic Freedom in Lebanon
Regional Transformation and its Implications on Economic Freedom in Lebanon
Regional Transformation and its Implications on Economic Freedom in Lebanon
Regional Transformation and its Implications on Economic Freedom in Lebanon
Regional Transformation and its Implications on Economic Freedom in Lebanon
Regional Transformation and its Implications on Economic Freedom in Lebanon
Regional Transformation and its Implications on Economic Freedom in Lebanon
Regional Transformation and its Implications on Economic Freedom in Lebanon
Regional Transformation and its Implications on Economic Freedom in Lebanon
Regional Transformation and its Implications on Economic Freedom in Lebanon
Regional Transformation and its Implications on Economic Freedom in Lebanon
Regional Transformation and its Implications on Economic Freedom in Lebanon
Regional Transformation and its Implications on Economic Freedom in Lebanon
Regional Transformation and its Implications on Economic Freedom in Lebanon
Regional Transformation and its Implications on Economic Freedom in Lebanon
Regional Transformation and its Implications on Economic Freedom in Lebanon
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Regional Transformation and its Implications on Economic Freedom in Lebanon

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  • 1. Regional Transformation and its Implications on Economic Freedom in Lebanon Dr. Mounir Rached Georgina Manok 6th Economic Freedom of the Arab World Conference Beirut, Gefinor Rotana Hotel, October 20.-21., 2011
  • 2. Outline• Overview• Impact of Regional Turmoil• Economic freedom ranking & progress• Challenges and the Way Forward
  • 3. Impact of Regional Turmoil• The overall impact so far has been negative on Lebanon’s economic environment• Growth slowed down to 2%• Consumption slowed down & could have declined in real terms• Inflation climbed to over 6%
  • 4. Impact …• Goods and Services trade has lost a good part of its momentum since the escalation of the events in the region• Net trade deficit escalated• Imports rose reflecting in part international price increases• Most exports declined except agr. exports• Exports to Arab countries decreased
  • 5. Special Focus on Tourism• Direct Economic Impact of the Uprising: – Around 600,000 Arab tourists drive into Lebanon yearly through Syria -- the only country Lebanon shares an open border with. • Passage through Syria is a cheap option for most regional tourists. • The number of tourists in the first half of 2011 by 20% to 774,214 from 964,067 in 1st half of 2010
  • 6. Impact …• Remittances , however improved by 11%• Financial flows declined by 15% in 1st half• FDI declined• Balance of payments recorded a deficit of $500 million
  • 7. Impact ….Banking is less affected by the turmoil• Broad money expanded- inflow of foreign deposits• Conversion of deposits into US dollars• Lending activity• Decline in Central Bank reserves (BoP deficit)
  • 8. Impact…• Equity bond markets Declined
  • 9. Impact on Economic FreedomLebanon, continues to have a relatively low ranking in the global economic freedom index77th globally 9
  • 10. Impact on Econ Freedom- Its rating is burdened by few important components- Corruption is perceived to be high-one of the highest among peers. 139nd out of 179 Corruption is well entrenched 10
  • 11. cont• Property rights (enforcement of contracts) score is low Its legal system is perceived to be politically manipulated• Investment freedom score is low Restricted licensing- cumbersome administrative procedures- multiple phases- Ceilings on certain investments No restriction ,however, on capital flows-private & enterprises 11
  • 12. II. Relative ranking in MENA Top Economic Freedom Achievers in the Arab World (Fraser Institute) 8.2 8 BahrainFinal Grade 7.8 Jordan 7.6 Kuwait Lebanon 7.4 Oman 7.2 Qatar 7 2002 2003 2004 2005 2006 2007 2008 12
  • 13. Challenges and the Way Forward• What Lebanon has to do to: – improving Economic Freedom
  • 14. WTO Accession Essentials• Lebanon’s accession process to the WTO has started since November 1998.• In 2000, the Lebanese government adopted a framework to reform Lebanon’s legal and regulatory environment, to conform to the WTO’s Multilateral Agreements and the accession master plan was finalized in October of the same year.
  • 15. Pending Laws for WTO Accession1. International Trade and Licensing Law2. General Food Law3. Law on Standards, Technical Regulation and Conformity Assessment Procedures4. Law on Standards5. Law on Animal Quarantine6. Removal of NSSF Certificate Requirement for Importing/Exporting Activity of Established Traders7. Amendments to the Budget Law to Unify/Transform the Ad-Valorem Fees for Services Rendered8. Competition Law9. Additional Intellectual Property Rights Legislation to Modernize Laws and Systems of Commercial and Industrial Property
  • 16. Challenges to WTO Accession• Political Challenges – Lack of consensus on the role of WTO in economic priorities especially for the current government• Stakeholders Buy-In – Especially in the agricultural and industrial sectors• Technical Capacity – Technical deficiencies in local expertise regarding some of the prerequisite laws (ex: competition law)
  • 17. Thank You

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