BEIRUT: Lebanon can play a bigger role in strengthening Arab-European economic integration, experts said at a Beirut forum Wednesday.
Lebanese bankers and financial experts, speaking at the “Euro-Arab Economic Forum: Partnership for Better Economic Complementarity” conference, said the promotion of Arab-European economic ties is key to tackle challenges facing the MENA region.
Philippe De Fontaine Vive, vice president of the European Investment Bank, said the bank would soon initiate a program to fund Lebanese small and medium enterprises as well as renewable energy projects through soft loans.
“Lebanon is an oasis of stability and is one of the most effective [in attracting] investments,” he added.
He also called on Gulf Cooperation Council states to boost investments and cooperate with the EU in finding solutions to chronic unemployment that is wreaking political and economic havoc across the region.
Meanwhile, Central Bank Governor Riad Salameh highlighted the resilience of the Lebanese economy over the past years as it avoided the turmoil that swept several Arab countries.
Salameh forecast over 2 percent economic growth in 2012.
“The economic conditions in Lebanon are acceptable if compared to other Arab Mediterranean countries because of high liquidity in its banking sector, and what is now the highest ratio of foreign reserves in the Central Bank’s history,” he said.
Salameh called on European countries to increase support for Lebanon, which has never failed to respect financial commitments.
For his part, head of the General Union of Arab Chambers of Commerce Adnan Kassar called in his opening remarks for developing more robust EU-Arab links.
“We hope that the challenging and risky developments facing the Arab world and the restructuring phase in the European Union [paves way for] fostering cooperation,” he said.
Kassar called for a more fair and even partnership between the EU and the region, urging the reassessment of already-existing economic and trade agreements to further benefit stakeholders in light of political and economic developments in both regions.
Economy Minister Nicolas Nahas, who spoke on behalf of Prime Minister Najib Mikati, said the forum reflected “Lebanon’s leading role as a meeting point for the Arab world and Europe and [its position] as a hub for debate on strengthening relations with Europe on all levels.”
Nahas argued that deeper economic integration would help generate an added economic value for both the EU and the Arab World, urging European countries to open up their markets and remove technical barriers preventing the flow of Arab agricultural and industrial products to the union.
Calling on European states to boost investment in the region, Nahas said Europe should play a bigger role in job creation in the MENA region, “which in turn reinforces security and stability on both sides of the Mediterranean.”
Angelina Eichhorst, head of the EU delegation to Lebanon, called on governments to take bold steps toward liberalizing regional economies while banking on strong relations with Europe to achieve “an economic Arab Spring.”
“Lebanon has a special place in the region because of dynamic and educated human resources that [are] the backbone of the economy and will remain so even if gas and oil are found on the Lebanese cost,” she added.
Head of the Investment Development Authority of Lebanon Nabil Itani said Lebanon had managed to boost foreign direct investments by 15 percent on average between 2006 and 2011.
He said IDAL would continue to support and give incentives to investors, particularly EU firms investing in Lebanon’s growing information technology, telecommunications, and tourism and industrial sectors.
In two panels held Wednesday, experts from from the United Nations and an array of private companies discussed ways to strengthen links between the two regions.
In a first session, moderated by Nahas, experts discussed ways to develop a new Euro-Arab partnership that could help spur growth.
Abdullah al-Dardari, director of economic development and globalization at ESCWA, argued that already-existing bilateral free trade agreements have not yielded significant economic growth for the Arab region particularly in terms of trade flow, FDI and GDP growth.
Measures to liberalize trade in manufactured products are well-defined and adhere to fixed timetables, Dardari said, adding that measures to boost agricultural trade were less clear and had no specific schedule.
“The EU has not offered significant new concessions to Arab Mediterranean countries in terms of market access for their agricultural exports,” he said.
However, he added that the EU benefits from the duty-free export of manufactured agricultural products to Arab markets.
Markis Massi, a partner at Boston Consulting Group, presented a study commissioned for the EIB.
The study argued that Gulf countries should use sovereign wealth funds to shore the economies of Arab Mediterranean countries.
While sovereign funds have lower appetite for states undergoing political transitions, Massi said the collaboration of private investors with development banks and funds can lower geopolitical risks with such investments.
Over 500 Arab and European officials as well as businesspersons attended the event, which was co-organized by the Beirut-based GUCC and the EIB.