ANSD : Lebanon, U.K. sign largest bilateral trade deal

SAT 20 - 4 - 2024

Date: Dec 13, 2018
Source: The Daily Star

Lebanon, U.K. sign largest bilateral trade deal

_{Joseph Haboush| The Daily Star}
BEIRUT: Middle East Airlines and Rolls Royce inked a $300 million deal Wednesday, marking the largest ever bilateral deal between Lebanon and the United Kingdom.

“I hope today’s agreement between MEA and Rolls Royce opens the way for an increase in partnership between our two countries,” Prime Minister-designate Saad Hariri said at the Lebanon-U.K. Business and Investment Forum in London.

MEA has announced that the Airbus A330-900 will be the face of a new fleet of aircraft. Wednesday’s deal will see the British company providing support for the Trent 7000 engines, which power the Airbus aircraft. The combined value of the engines and services to Rolls-Royce is $300 million.

Foreign Secretary Jeremy Hunt said: “This is great news for British business and the largest U.K.-Lebanon trade deal ... demonstrates the strength of our ties.”

Hariri, during his keynote speech, said both countries are navigating difficult times, but that it shouldn’t stop the two sides from strengthening ties.

The premier-designate assured investors and British officials that the monthslong delay in his attempts to form a new government has not halted progress on implementing the CEDRE projects and reforms.

At the CEDRE conference, held in Paris last April, the international community pledged over $11 billion in grants and soft loans for Lebanon’s economy and infrastructure.

“Since CEDRE, we have been revisiting certain sectors and projects to expedite planning and execution. We are also maintaining regular dialogue with the multilateral development banks ... to align the funding pledged at CEDRE with the projects of [the Capital Investment Program],” Hariri said.

He showed examples of three public-private partnership projects launched in Lebanon earlier this year in the transportation and telecommunications sectors.

Appealing to British businesses to look at the infrastructure projects ahead, Hariri said, “To put it in numbers, we envisage spending around $2 billion a year on infrastructure projects.”Hariri admitted that the region was at a critical crossroads, but believes positive developments are ahead.

“Despite all the ongoing turmoil, the region is headed toward a period of stability, growth and prosperity, and we all need to be prepared for this phase in order to tap into the numerous investment and business opportunities that lie ahead,” he said.

The prime minister-designate encouraged the formation of Lebanese-British joint ventures and partnerships participation in regional rebuilding projects. “The Lebanese private sector is well-established in the countries of the region, especially those expected to witness major reconstruction efforts, such as Iraq and in due time Syria.”

He went on to cite the Tripoli Special Economic Zone in north Lebanon as “the ideal platform” for British manufacturers to produce and export to the region. “The zone is strategically located, only 30 kilometers away from the Syrian borders and adjacent to the second largest port in Lebanon,” Hariri said.

In his concluding remarks he said, “I want to tell you that, yes, we do not have a government but we are passing laws, we will work with CEDRE ... we want to make it a success with the help of everyone. The president, the speaker and everybody understands the process that we are in and understand the opportunity that we have from CEDRE.”

According to Hariri, total trade between Lebanon and the U.K. stands at 586 million pounds ($742 million) a year, with British exports making up the vast majority of this. “And, more Jaguars and Land Rovers are sold per head in [Lebanon] than anywhere else in the world.”

Afterward, Hariri told journalists that the forum was successful and positive, saying representatives of large financial institutions participated because of their interest in Lebanon’s developments.

“We perceived investors’ interest to come to Lebanon because they know that there are real opportunities that will be provided by CEDRE. I focused on the need to complete the required reforms which will allow us to attract investments very soon,” he said.

For his part, Minister of State for the Middle East at the Foreign and Commonwealth Office Alistair Burt said Lebanon’s improved security situation will boost business investment.

“First, we have just appointed the first Her Majesty’s Trade Commissioner for the Middle East, Simon Penney, who made his first successful visit to Lebanon last month. Simon shares my view that there is significant scope and appetite for greater investment in Lebanon,” Burt said during his speech.

He also highlighted Lebanon as a “new frontier for investors in search of yield,” recalling Lebanon’s Capital Investment Program launched during the CEDRE conference in Paris. “I very much hope to see U.K. firms bidding for and winning contracts under this plan in the years ahead.

“Power generation, public transport, water supply and other projects from the $22 billion-plus program all offer hefty potential returns for investors,” Burt said.

But the British official told Hariri and the large accompanying delegation that Beirut must “do important things” before these investment promises can be realized.

“It has to fulfill its commitments to economic reform, and for that to happen it needs to have a government in place quickly, and one which will be able to swiftly enact crucial confidence building measures on transparency, fiscal discipline and the ease of doing business,” he added.

The U.K., Burt revealed, will provide Lebanon an additional 10 million pounds on top of the original 20 million pounds that the U.K. pledged at CEDRE. “I am pleased to announce today a new 30 million pound program to deliver on the U.K.’s CEDRE pledge.”

The funds will be used in a program to provide technical assistance to support the tiny Mediterranean country’s reform vision and prepare infrastructure projects for investment. “Sufficient momentum by the Lebanese government on reforms will unlock grant funding for infrastructure, helping to attract additional private sector investment,” Burt said.

Meanwhile, Penney spoke of “exciting opportunities” in Lebanon. “The U.K. has great offshore expertise from North Sea oil and I am sure this opportunity will be very interesting to a number of businesses here today.”

Penney noted that he has three roles: growing bilateral trade between Lebanon and the U.K., growing foreign direct investment between Lebanon and the U.K. and trade policy between the two countries.

Currently, the U.K. support to Lebanon is worth about $200 million per year, according to an embassy statement.

Readers Comments (0)

Add your comment

Enter the security code below*


Can't read this? Try Another.