[LCM Articles] Lebanon's elusive place under the sun

[Loai Naamani]

Friday, January 06, 2006

Lebanon's elusive place under the sun

By Fady Abboud

I have had a nightmare with my eyes wide open. It was brutal and
unrelenting... without even a monster in sight. I thought that the holiday
period would provide an opportunity for relaxation and some enjoyable
reading. In fact, it has had the exact opposite effect. 

When we slow down from our regular working-day pace, we tend to see things a
little more clearly. Our national deficiencies hit us straight in the face.
Similarly, when we read about the world around us, we inevitably find chinks
in our economy's armor ... too many chinks, unfortunately. 

While the rest of the world is steaming purposefully ahead, we, in Lebanon,
have spent the last few weeks discussing among ourselves how to start a
dialogue... among ourselves. 

Meanwhile, Brazil and Turkey, for example, which used to be considered
economic basket-cases about 20 years ago, are both remarkably well-managed
today, with inflation in single digits and growth above 5 percent. 

Fareed Zakaria, of Newsweek, says that "this shift is happening all over the
world. From Thailand to South Africa to Slovakia to Mexico countries are far
better managed economically than they have ever been." 

Zakaria, writing in Newsweek's yearly Special Edition "Issues 2006," goes on
to say that "even in cases where political constraints make it difficult to
push far-reaching reforms, as in Brazil, Mexico or India, governments still
manage their affairs sensibly." 

Zakaria claims these improvements in economic management are due to
"knowledge" and that "a knowledge-based world will be a healthier and richer
world." 

Thomas Friedman, also writing in Newsweek's Special Edition, agrees with
Fareed Zakaria's premise. He says that knowledge is more important today "as
a source of both economic advantage and military strength." 

Friedman says that "it is no surprise, therefore, that those societies with
the most innovative scientists, universities, engineers and technology
companies ... have enjoyed rising standards of living over those societies
without them." 

He says that knowledge has shifted the global power game from a military
race into "a race for IQs. The more knowledgeable workers your country
has... the more productive your economy and, therefore, the more powerful
your country." 

Quoting the chief executive of Rolls-Royce, Friedman writes that in today's
world, "we will speak less and less about developed, developing and
underdeveloped countries but more and more about smart, smarter and smartest
countries." 

How smart is Lebanon by comparison? 

Maybe Tony Blair could help us answer this question which is at the root of
my eyes-wide-open nightmare that I mentioned at the beginning of this
article. 

In the same Newsweek Special Edition, Britain's prime minister writes that
"complaining about globalization is as pointless as trying to turn back the
tide." He says that there are no such debates in China. "They [the Chinese]
are not worrying about potential threats but are busy seizing the
opportunities ... So, too, are the other emerging economies in Asia and
South America." 

Blair says that "there is no secret recipe for economic success. The
difficulty is getting all the right ingredients in place. Successful
countries need a stable economic framework so firms, and families, can plan
with confidence. They need open markets, strong encouragement of enterprise
with labor-market flexibility to foster dynamism and adaptability. And, more
important today than ever, they need sustained investment in science,
education and lifelong learning to make the most of the skills and talents
of all their people - to create, in fact, true knowledge economies." 

The prime minister claims that the fastest-growing cities in America and
Europe are those with the highest proportions of knowledge workers. But, he
warns that, compared to America, "on any relative index of a modern economy
- skills, R&D, patents, IT - Europe is falling behind." 

In order to put the breaks on Britain's perceived slide, Blair says that his
government is "encouraging investment in R&D through new tax help, and have
given extra support to small businesses. We have also put sustained
investment into education. We have massively expanded, in partnership with
business, modern apprenticeships and workplace learning initiatives. Through
the training and opportunities available in our New Deal program, we have
virtually eliminated long-term youth unemployment." 

He continues that Britain is "investing unprecedented amounts in modernizing
science laboratories, and building links between our universities and
business through new science parks." 

Blair concluded that "this emphasis on enterprise, on education and skills,
and partnership is central to our ambition of boosting social mobility,
tackling poverty, and spreading prosperity." 

Singapore's prime minister, Lee Hsien Loong, on the other hand, says that
his country has "a long tradition of gathering and trading goods, including
knowledge. But in the next phase, we must move beyond gathering and managing
knowledge to emphasize creating our own knowledge." In order to do this,
Singapore is doubling R&D investments over the next five years. 

Lee concludes that "globalization will force nations to reallocate
resources, restructure their economies and reorient their societies for the
future." He says that, in Singapore, "we are remaking ourselves into a key
node in the knowledge network, securing our place under the sun." I cannot
help but remember that, 35 years ago, Singapore wanted to learn from Lebanon
how to shape its economy. 

Given the breathtaking developments in the world that I described above, how
do we rate Lebanon's readiness to seize the opportunities presented by
globalization? I'll let the reader give the mark. 

When we consider the increasingly central role that "knowledge" is playing
in "smart, smarter and smartest countries," how do we rank Lebanon's
initiatives concerning universities, laboratories, science and math
education, innovation and R&D investment? Again, I'll let the reader do the
ranking. The manner in which Lebanese politicians treat our national
university may be indicative of the low esteem in which "knowledge" is held
in this country. 

How can we fill the vacuum in strategic thinking that exists? Many of us
hoped that the EU-Lebanon Association Agreement would point us in the right
direction, but the pace of reform and change has been painfully slow.
Nevertheless, we still believe that EU-funded programs such as Lebanon's
Quality Program - QUALEB and the Euro-Lebanese Center for Industrial
Modernization - ELCIM, could help the private sector to modernize and
upgrade, as competition is increasingly moving away from prices toward
quality. 

We are confident that QUALEB will help the Association of Lebanese
Industrialists to create an R&D Center and Incubator at ALI's premises in
the Port of Beirut. R&D and innovation do not have to be the exclusive
preserve of hi-tech industries, such as rocket science or the aerospace
industry. They could also be helpful in product development relating to our
cuisine, which is witnessing a boom in worldwide consumer demand. 

Innovation, design, and entrepreneurship are not really alien to our
graduates, but they need encouragement and facilities, such as incubators,
where they could unleash their talents. ALI's proposal is ready, but the
Beirut Port Authority seems to have better projects for our export center!
Lebanon is lucky in a sense because the last word in this matter is for
Minister Mohammad Safadi, who is a firm believer in promoting knowledge and
creative employment, as he has demonstrated in his own educational and
charitable foundations. I must also point out that the decision to subsidize
rents in government buildings is with the Finance Ministry. Minister Jihad
Azour is pushing the private sector to create a think tank to promote
entrepreneurship. I am sure we will adopt our efforts. The Economical
Associations in Lebanon canny some of the blame too! We should be doing much
more, give us the chance and we will. 

It may be an unfair comparison, but reading about Tony Blair's and Lee Hsien
Loong's ideas, strategies, policies, foresight and long-term planning, how
do our own politicians fair? I'm tempted to help the reader reach an answer,
but I will keep my thoughts to myself. 

In the country that prides itself in its human resources (Lebanon's oil, bla
bla bla), what can we say when we reflect on the fate of Lebanon's youth, as
far as unemployment and emigration are concerned? When India and China are
managing to attract expatriate and emigrant scientists to come back from
Europe and the States, should it not be a capital crime to allow Lebanese
youth to leave this country? Can we continue to allow our country to lose
the "race for IQs?" 

Equally importantly, in the country that promotes itself as a modern-day
Garden of Eden, how can we forgive those who have ruined our environment? It
is said that we cannot do damage to the Earth without damaging ourselves
and, that what affects nature affects all of us - there are no real walls
between us. In light of this, is it excusable for the government not to have
an alternative-energy policy, based on solar and wind technologies? Is it
excusable to forbid environmentally friendly and cost-efficient hybrid
(dual-engine) cars because a 1930s law bars importing them to Lebanon? In
the name of the environment we close all our quarries, thereby increasing
the price of sand and gravel by more than 300 percent and then issue
licenses for the lucky ones! They are lucky according to Lebanese standards,
because they found the right partners. 

When we consider the lack of foresight, long-term planning and productivity
in Lebanon, because, among others, we are busy discussing among ourselves
how to start a dialogue among ourselves, is it any wonder that I am having
nightmares during the holidays and in the middle of the day? I feel like
being in Europe in the 18th century. I see the light at the end of the
tunnel, but it is becoming faint. I hope 2006 to be the year to remind all
of us that we are now living in the 21st century. 

How can Lebanon find its place under the sun with a national agenda that
includes only one single item: discussions between religious factions about
a "national" dialogue among ... sectarian factions? I know the Lebanese
deserve much, much better. 

How can we make our politicians and policymakers read the International
Herald Tribune (instead of Syrian newspapers) so they could find out, among
others, that Intel, the world's largest chip maker (not the potato type, for
those in Lebanon who are not tech-savvy), is investing $3.5 billion to build
a new factory in Israel. Intel already employs 6,000 workers in Israel, and
with the new factory, the number will go up to 8,000. The Israeli government
offered Intel $525 million worth of incentives in order to encourage the
company to invest in Israel. 

While we're on the subject of Israel, let me inform our policymakers (if
they are not too busy reading informative regional newspapers) that Israel's
high-technology sector generates more than $13 billion of annual exports, or
about 40 percent of Israel's total exports. Furthermore, Israel has about 70
companies listed on the Nasdaq Stock Market in the U.S. 

In light of these developments, is it legitimate to ask where is Lebanon's
"index of a modern economy - skills, R&D, patents, IT?" Where are the
government's policies for "sustained investment in science, education and
lifelong learning to make the most of the skills and talents of" all
Lebanese people. Where is our own New Deal to eradicate youth unemployment
(which stands at about 70 percent according to the EU)? 

Where is Lebanon's purposeful national dialogue which leads us to reorient
our society for the future ... and not the past? Who will lead the Lebanese
and encourage them to create their own knowledge, rather than keep importing
beyond our means? 

My nightmare is coming back ... I feel the gap between Lebanon and other
countries, friendly and not so friendly, is widening to the point of no
return. It is urgent for the Lebanese to rely on their own efforts in order
to fuel growth, create jobs and chart pathways to economic prosperity. 

I hope that this article acts as a wake up call for Lebanese policy-makers.
They urgently need to start focusing their minds and energies on the issues,
policies and initiatives that need to be addressed and enacted in the days
and months ahead, to ensure that Lebanon's economy is well-equipped for the
challenges of the "knowledge economy." They need to build Lebanon's
comparative advantages, enhance competitiveness and improve productivity, so
that our country's energies are unleashed to achieve the economic growth
necessary for creating new jobs and improving the living standards of all
citizens.

Fady Abboud is the president of the Association of Lebanese Industrialists.
He wrote this commentary for The Daily Star.

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