Local

Head of investment agency resigns

The head of the organization in charge of drawing investment into Lebanon has resigned in a move that surprised financiers already concerned by a decline in capital inflow.

Information Minister Anwar Khalil announced after a Cabinet session late on Wednesday that Youssef Choucair, head of the Investment Development Authority of Lebanon, had resigned.

Khalil said that the government handed the prosecutor of its accounting office a file on Al-Rawabi; a $30-million scheme for an industrial park 45-kilometers south of Beirut that IDAL was marketing to draw scattered factories into one complex.

Al-Rawabi is the latest in a series of projects devised by the previous administration of Rafik Hariri and marketed by IDAL, to be stopped or examined by the judiciary or bureaucracy.

“Al-Rawabi is a project drawn upon our request by renowned international consultants. We hoped that it would be implemented as a model for the whole country. It does not deserve all of these complications,” said Jacques Sarraf, head of the Lebanese Industrialists Association.

A committee headed by Interior Minister Michel Murr, recommended this year that IDAL be dissolved. However Prime Minister Salim Hoss kept the agency and retained Choucair — a former World Bank official and one of the few key figures allied to Hariri to survive the change in government.

Financiers say the government ­ which took office in December ­ is discouraging investors by revoking contracts struck by Hariri for violating archaic or obscure laws. They hoped the resignation of Choucair would not signal an end to IDAL and cause further business uncertainty.

“I’m surprised. I spoke to Choucair a few weeks ago. He gave no indication of resigning,” said a senior banker.

Joe Sarrouh, executive adviser at Fransabank, said: “IDAL managed to create awareness about investment opportunities in Lebanon. Let us hope Choucair’s departure is part of restructuring to optimize the agency, not eliminate it.”

Fransabank reported last week that capital inflows fell 19 percent in the first half of 1999 from the same period of 1998.

Hariri set up IDAL in 1994 to bypass the bureaucracy and draw in foreign investment. The agency attracted groups to operate the mobile telephone network, airport facilities, tourist sites and parts of the transportation system. It also helped launch the first home-grown Arab investment fund.

Ambitious projects to build a $350-million conference center, and toll highways costing $1 billion to link Beirut with Damascus and ease congestion in the capital never materialized because of cost, political factors and regional uncertainty.

Ireland’s Aer Rianta, one of the world’s largest duty free operators, won a 15-year, $38-million contract in 1996 to create a shop at Beirut Airport. It was canceled in June for contravening regulations that do not allow leasing public property for that long.

Aer Rianta subsequently threatened legal action. Its local partners say the firm is negotiating to redraw the contract with the government but the outcome remains uncertain.

“I don’t know what this government is doing. Things were moving but became very slow since this Cabinet started re-examining everything,” said a senior official who left IDAL. - Reuters

 

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