Lebanon and Saudi Arabia ties
Saudi Investment potential and financial ties flagged up by the Lebanese Prime Minister
LONDON: Lebanese Prime Minister Saad Al-Hariri highlighted the potential for strong commercial and investment ties between Lebanon and Saudi Arabia at a conference in London on Thursday.
He described his relationship with Saudi Arabia as a good one and believes that the Saudi market is a good market for Lebanon. He also said that they have prepared many agreements that they will be signing with Saudi Arabia as soon as they form an administration.
Al-Hariri has been struggling to form a national unity government in Beirut since elections in May produced an inconclusive result. But he hoped a new government would be unveiled before the end of the year or early 2019.
Al-Hariri said he recognized the need for urgent reforms to rebuild Lebanon after the civil wars of 1976-90, and clashes with Israel that left many areas pulverised in 2006.
He also spoke of the circumstances that Lebanon found itself after taking in 1.5 million Syrian refugees. There was a pressing need to restore the nation’s finances after several years of GDP growth of between 1 percent and 1.5 percent.
Al-Hariri said that Gulf countries come to Lebanon to invest and at the same time there are political parties in Lebanon that curse the hell out of the Gulf. He also added that Lebanon should move away from the regional conflicts and is too small to pay a price in these big conflicts.
Creating employment was vital for Lebanese young people, and he said that the unemployment rate among refugees was 75 percent. He wanted to prepare Lebanon as a platform for foreign companies to come and invest in, and make Lebanon a hub for them to take advantage of reconstruction in Syria, Iraq and even Libya.
At a recent media briefing at the World Bank’s offices in Beirut, Lebanon’s economy was described as “unsustainable” by the bank’s vice president for the MENA region, Ferid BelHajj.
He said that Lebanon has been defying gravity for quite some time and a day would come when gravity materializes and added that the central bank had a good buffer of foreign reserves.
The IMF has called for “an immediate and substantial” fiscal adjustment to improve the sustainability of public debt, which stood at more than 150 percent of gross domestic product (GDP) at the end of 2017.
The World Bank has a $2.2 billion investment portfolio in Lebanon, but the lack of government means $1.1 billion of that amount — to be spent on jobs, health and transport projects — is still awaiting approval by Beirut before it can be used.
International donors meeting in Paris pledged more than $11 billion of investment for Lebanon, but they want to see reforms first. At the Paris meeting Al-Hariri promised to reduce the budget deficit as a percentage of GDP by 5 percent over five years, Reuters reported.