The Lebanese food industrial sector is capable of supplying most of the basic products that were imported into Lebanon before the onset of the 2019/2020 crisis. The sector’s output encompasses a wide variety of products, ranging from poultry and processed meats, to the whole range of dairy products (except butter and processed yellow cheese), jams, pickles, spices, nuts, coffee, edible oil, confectionery and snacks, bread and pastries, without forgetting a range of juices, mineral water, spirits and wines. Due to the financial crisis and LBP devaluation, imports are becoming increasingly expensive and unaffordable. Exports represent one of the few sectors that maintained a steady growth in volume since the early 2000s, and even when the economic decline started in 2011, exports stood still, or decreased modestly. I want to address two primary points in regard to the food industry. First, how Lebanon can leverage the food sector to create jobs, and second, how the agroindustry can be improved.
What is the best way to create jobs in the food sector, overcoming perceived obstacles, and creating synergies in job creation with adjacent or even distant sectors and industries, from packaging to marketing and logistics?
I believe we should focus on job preservation rather than job creation. The food sector, similar to other sectors in Lebanon, is under great risk, and subject to real threats of extinction… However, we cannot undermine the strong points that should be built upon to reinforce our chances for survival. Export capabilities should be upgraded and improved, by creating new tools to finance export activities and import of raw materials (the Cedar Oxygen Fund may be one way to do this), and settlement of pending, unpaid bank facilities. Moreover, focusing on import substitution is another important factor to keep the sector’s productivity high, despite the decreasing local purchasing power. Recent United Nations Industrial Development Organization (UNIDO) studies showed that every job opportunity in the industrial sector will help create 2.2 jobs in adjacent sectors. This could also be true in the case of the agro-food industry: for, in addition to boosting activities in support sectors like packaging, services, insurance, shipping , etc…, the agro-food industry will directly boost another vital sector: agriculture. Therefore, upgrading the expertise and knowledge of the agriculture sector, and encouraging the adoption of crops that can be processed as the essential raw materials for agro-food units, will create a circle of job creation across both sectors.
Can the agro and agro-industry sector be improved, and can it create new jobs, without having to rely on state action?
No sector is able to overcome the current “impossible” situation without relying on active state intervention in reviving the economic cycle in Lebanon. We are very well aware that the state has very limited and scarce resources to support the productive sectors, agro-food among them, however, many initiatives can be launched that do not cost a single dime. All it takes is ratification of new laws, and the application of existing ratified laws and decrees. The Food Safety Law, Appelation Controle, and Safeguard measures are few examples of a very long list of relatively easy actions that can improve the performance of the sector, helping eventually to preserve and create jobs.
Any financial and economic recovery plan that does not include any stimulus and support measures is doomed to fail in attaining its objectives. The focus in all draft plans that were made public was to reduce debt to GDP ratio to acceptable limits, and all the measures taken were centered around reducing debt, which is understood and acceptable. However, the same ratio can also be reduced by increasing GDP, and this can only happen by including stimulus measures to re-ignite the exhausted economy. According to many previous reports, most importantly the newest one by McKinsey, the agro-food sector is a major growth engine for the economy, considering its competitive advantages that need to be reinforced and emphasized.