Even amidst all the chaos of Brexit, some sectors and companies are pushing ahead with grand plans. Without a clear view of the threats looming over the horizon, forging ahead with strategic plans previously in the works is sometimes the best route a company can take.
The UK has long seen the potential in the emerging market of Lebanon. The Minister for the Middle East, Alistair Burt, recently noted that the UK was among the first to recognize Lebanon as a sovereign country 75 years ago. Even with all the economic uncertainty in the UK right now, exports to Lebanon increased in 2017, to £461 million. And as Brexit will take the UK out of the EU’s customs union and single regulatory market, the UK will be left to its own devices in negotiating bilateral trade deals with trading partners, as was the intent of Brexit from the get-go. So, the government is reaching out preemptively to get those deals hashed out ahead of the potential turmoil to come in the spring.
Simon Penney, of the UK government’s Department for International Trade, is new, as of October, trade commissioner for the region that includes the Middle East, Afghanistan, and Pakistan. He recently spoke about the initiatives being discussed and worked on between the UK and Lebanon, and in November he met with the Lebanese Prime Minister, Minister of Trade and Economy, President of the Council of Development and Reconstruction, leaders of Lebanon Trade and Economic Associations, and the UK Lebanon Tech Hub.
The two countries are especially trying to leverage their strengths with highly skilled, entrepreneurial, young people. Lebanon has a strong private-sector economy, with profitable banking, tourism, architecture, construction, wholesale and retail trade industries. And they have invested heavily in boosting their competencies in pharmaceuticals and IT, while their art and fashion industries are playing a larger role on the world stage. The UK is the leading tech startup region in Europe with a growing number of small and medium privately-owned businesses that already have ties to Lebanon.
The country is pushing hard to spark increased growth, and investors are taking notice of its potential. If the UK can form lasting relationships with a growing economy that is attracting foreign investment, it will start having its own trade relationships to rely on in the absence of those between the EU and other nations. And Lebanon provides a great bridge between the UK and other Middle East countries.
A natural fit for the two countries is to focus on expanding their relationships in the tech industry and eCommerce and incentivizing small to medium privately-owned businesses to continue growing. The UK Lebanon Tech Hub, started in 2015, has already created 2000 Lebanese jobs, facilitated the start-up of 86 new Lebanese firms, made deals worth $8.5 million in the UK, and increased revenues in Lebanon by $26 million. The UK and Lebanon are also looking to partner in the infrastructure, energy, education, and healthcare sectors in the future.
While they are partnering to expand international growth for both countries, the primary focus is on local economic and social benefits, especially attracting investment from other foreign countries and making heavy use of PPP (Public Private Partnership) deals.
Some of the innovations coming out of Lebanon include Slider (a tech gadget online shopping comparison site), tele-surgery, early asthma detection, auto-tuning for guitars, and smoking cessation “smart” lighters.
November saw the launch of a new partnership venture between the UK and Lebanon: the ELITE program of the London Stock Exchange Group created to facilitate the dual listing of public companies. They work with Lebanese businesses to negotiate the regulatory, capital, and governance requirements in order to tap into huge sources of foreign investment via the London Stock Exchange.
In a continuation of the momentum being built over the last few months, the UK-Lebanon Business and Investment Forum took place in December at the Institution of Engineering and Technology in London. Mr. Burt explained that in addition to business partnerships, the UK’s support of the Lebanese Armed Forces has helped to secure the Syrian border and make economic growth and stability possible in the region. This has resulted in the UK lifting its advice not to travel to parts of Lebanon, which is helping the tourism industry there.
A $22 billion capital investment program focused on power, public transportation, and water, is not only offering returns to investors, but bringing the Lebanese infrastructure into the 21st century. Mr. Burt also expressed gratitude for Lebanese efforts to quickly put in place a government that will enhance transparency and fiscal discipline, offering confidence to potential business investors.
Two key achievements were announced at the Forum. First, the UK pledged £30 million, in addition to $11 billion already pledged by other countries, to back its program to support the Lebanese government and infrastructure plans, paving the way for more grants and private investment in the future. Second, a trade deal worth $300 million was struck between Rolls Royce and Middle East Airlines. In this deal, Rolls Royce will supply engines for a new fleet of Airbus planes.