Lebanon woos French investment despite Middle East turmoil
Lebanon is "open for business", the Franco-Lebanese Chamber of Commerce told stakeholders in Paris during a conference aimed at fostering technology transfer between the two countries. However, the rosy outlook may be upset by Beirut's geographic location, sandwiched between Syria and Israel.
"Customers often ask me, “What’s the situation? Is there war in Lebanon?" says Bechara Raad, the CEO of IT consultancy firm EI Technologies.
"I always explain that the civil war in Lebanon ended in 1990. It’s been 29 years," he told RFI.
Raad was speaking after a conference last week at the Franco-Lebanese Chamber of Commerce exploring business opportunities in Beirut.
The climate at least for entrepreneurs, is good. Four in ten people either run a startup or have set up their own business, which means investors have a good crop of skilled candidates to choose from – which was the case for Raad, who launched his first overseas branch in Beirut in 2013.
"The first 5 or 6 years, I never thought I would have facilities and people in Lebanon and do part of our business there," he comments.
Raad's choice was dictated by outside competition. "Accenture and Cap Gemini all outsourced part of their jobs to India or Mauritius where the cost is less than France or Europe, so I had to adapt."
Instead of following his competitors to India and Mauritius, the Lebanese-born Raad chose to set up shop closer to home.
"The main factor of success is the skills and the people and the way they deliver the job, I found that recruiting Lebanese people with the [French-speaking] culture would be much easier."
Doing business in Lebanon is relatively easy for people in the security or glass making industry, explains Mitchell Belfer, Director of the Euro Gulf Information Centre in Rome.
"Glass makers can easily earn a lot of money each time a bomb goes off and hundreds, if not thousands of windows are shattered at one go," he told RFI.
By bombs going off, Belfer is alluding to the tense geopolitical region Lebanon finds itself in.
The country is sandwiched between Syria, where a civil war has been raging for the past 8 years, forcing thousands to flee, notably to Beirut, and Israel, where a confrontation with Lebanon's Iran-backed Hezbollah cannot be ruled out.
"Lebanon is a tinder box," reckons Belfer. "If you are a risk taker, invest in Lebanon. If you would like more of a long-term investment strategy that has slower but consistent growth, I would not invest in Lebanon," he said.
None of this instability is good for business. But for EI Technologies' head Raad, whose French-based company employs over 400 people, the benefits far outweigh the risks.
"When I take our customers – big international brands – to Lebanon to visit the people who work for them, they are very happy and convinced, and they ask for more."
Economic cooperation between France and Lebanon is not new.
Beirut in fact used to be under a French mandate during the Ottoman Empire and after World War I and the two countries have perpetuated close ties through structures such as the Franco-Lebanese Chamber of Commerce.
"Lebanon was the entry gate for France into the rest of the Middle East," explains Farid Aractingi, the Chamber's Secretary General.
"The chamber was created just after the war where the two countries were recovering, and they wanted to improve their relations in terms of the economy," he told RFI.
That was in 1950. Nearly seventy years on, the climate has changed.
"You have a lot of players now in the same ground, in France as well as in Lebanon, and the idea is, 'How can we create a real synergy between the various actors?'" he says.
The Franco-Lebanese Chamber of Commerce is hoping to harness the potential of players such as EI Technologies and in so doing prove that doing business in Lebanon is possible.
"We want to change the image of Lebanon in France," said Aractingi, dismissing the current turmoil in the Middle East.
“In reality, what is most difficult in Lebanon is not the political context, it is the infrastructure: telecommunications, electricity, the roads, this is what is making things a little bit more difficult," he stated.
For now, Lebanon's business forecast looks to be holding, reckons the Euro Gulf Information Centre's Belfer, borrowing an image from Beirut's glass industry.
"When people's fears are high, they don't buy glass. They just put plastic over the damage. When confidence is high, they buy glass to replace the windows.
Right now in the Middle East, people are buying glass. So, even if there is the occasional bomb inside Lebanon, people replace their windows, so confidence is high," Belfer said.
How long it will last, is far less certain.