Albert Nasr heads the center for economic research at the Federation of the Chambers of Commerce in Lebanon, a key institution charged with collecting data and conducting studies of benefit to Lebanese industry. He discussed the role of the center with Executive, and issues of importance in the development of industrial exports.
On the Center of Economic Research
The Center of Economic Research at the Federation of the Chambers of Commerce is designed to supply the federation with support for its duties with regard to business and economic policies and regulations that the government is or isn’t taking. Our main aim is to be advisors to the government insofar as business legislation in general is concerned, in order to be able to protect the interests of the private sector. The bulk of our work is the preparation of position papers.
On the numbers of Lebanese industry
When we speak about Lebanese industry, we are not talking about 22,000 industrial units. The Association of Lebanese Industrialists has a constituency of about 2,000 registered industrial companies. The Federation of the Chambers of Commerce has a constituency of about 7,000 industrial companies. As for the 15,000 remaining firms that make up the number of over 22,000 industrial units reported in the surveys of the ministry of industry, the question here is over the definition of manufacturing. By one definition, a bakery is an industrial unit because they use machinery and transform raw materials into a product. But we in Lebanon are not used to considering bakeries as manufacturing entities. It is a matter of definition. Once we adopt a new definition, we will stick by it.
On industrial production and its share of GDP
Industrial production has grown in Lebanon over the past few years but in relative terms, other sectors have grown by larger proportions. Therefore I would not consider it a problem that the industrial share in GDP has gone down slightly, to about 17%. For one thing, you have to set a question mark behind the reliability of the GDP estimates. If you do not know the size of your pie, you cannot exactly know the size of your slice, that purports to be 20%. Another problem in industry is parallel production. This does not get tallied in any survey. There is a large amount of parallel production from enterprises, producing not only for the local market, but also for exports. These are enterprises that are not officially recognized because they have not registered, mostly due to some outdated administrative requirement that prevents them from registering. It is as if they are non-existent.
On export development and statistics
The export data does show an overall increase, but we deplore the fact that data gathered at customs sometimes includes re-exports. There is a special category for re-exports in the data sheets. But a product that enters Lebanon with its customs duties paid, that is then re-exported would enter the statistics under exports. It is not sufficient to have a single criterion of whether customs duties have been paid, to distinguish between exports and re-exports. A product may have paid customs duties but still be re-exported. An example is, if I were to import a Mercedes from Germany and pay customs duties on it, this car would enter the statistics under Lebanese exports – if I sell it to someone in the region without seeking reimbursement for my earlier import duties. This is an aberration, because exports ought to reflect our capacity to produce and export – rather than our capacity to import and re-export. Importing and re-exporting is a major activity, and we excel in it. This does indicate that we still have a role to play in triangular trade and that our regional status allows us to do this. But it doesn’t say anything about our manufacturing capacity. We need exports to reflect our manufacturing capacity. The only way to solve this issue is in my opinion to have a certificate of origin accompany all exports, regardless of whether the country of destination requires the certificate or not. The way things are now, exports do not get accompanied by a certificate of origin where a destination country does not require that form.
On the Euro-Mediterranean Agreement
With regard to Europe, exporters have to complete the EUR-1 form, which can basically be described as a certificate of origin. Our export data to the EU is reliable. The EU agreement opens up new markets to industrial products, without customs duties. As you know, an earlier agreement from 1979 had nearly the same clauses. I fail to see how we would benefit just on that point. However, the Euro-Med agreement has been launched within a larger framework, and we are going to benefit from that larger framework. Previously we were on our own. Now, support programs from the EU are designed to make us benefit more from this openness of the EU markets.
