Exports must be part of economic growth strategy

Successive Lebanese governments have largely neglected the manufacturing sector. Policies were instead limited to a number of financing schemes, based on subsidized interest rates and several trade agreements with EU and Arab countries. Industrialists were left to contend with multiple challenges, including high production costs, inefficient provision of public services, and significant skills mismatch. Consequently, the manufacturing sector’s share of the GDP has shrunk from around 10 percent in 2005 to 6.2 percent in 2017, despite employing 25 percent of the labor force. More recently, the sector’s exports dropped from a high of $5 billion in 2012 to $3.9 billion in 2017. Ignoring the sector is a big mistake. Empirical evidence, based on the 2006 findings of Harvard economist Dani Rodrik, shows that manufacturing-led structural transformation creates higher productivity and better paying jobs. According to UNIDO, every one job in the manufacturing sector creates 2.2 jobs in other sectors. Despite