On the road to reform Lebanon (Part One)A majority of Lebanese seems to share disappointment with traditional political parties and are longing for change and reform as demonstrated in recent years. Nevertheless, the prospects remain dim for a major change in: the entrenched political structure of Lebanon, the confessional power-sharing system, the discriminatory electoral law, and the deep-rooted culture of sectarianism. In other words, It has become more than clear that there is a real problem in the system and the political identity of Lebanon which makes voting for non-sectarian candidates a sin and complicates pumping any new political blood into the political arena. These factors make the political and economic reforms in Lebanon very difficult. But to avoid pessimism and acquiescence to a status quo in Lebanon, the current government can take several steps on the long road to reform. I am citing below feasible suggestions for political and economic solutions.

1. Punishing corruption is a vital component of our economic growth effort. The corruption in Lebanon is widespread and the government has not established yet the necessary integrity structures to fight corruption. To do this, the government should have an anti-corruption strategy including: regulation reforms, access to information laws, provisions regulating the funding of political parties, use of technology to prevent corruption, elaboration of new mechanisms in the public budget transparency, prohibition of using the functional status in public administration, and creation of an open system of government procurement that can be accessed online. 

2. Providing support to the private sector, particularly small and medium enterprises. To be realistic, we cannot attract foreign investors if we can't keep the local investors. Also, the government should support companies to target global market. Actually, the solution to a Lebanese balance of payment deficit is more exports. So, let’s help our exporters export more; give them incentives and all the support we can.

3. Our economic ratings are based on political stability as much as they are based on economic performance. All the political parties in Lebanon should do all their best to keep the political stability and isolate the country from the regional problems. In the future, Lebanon will have the potential to grow increasingly and act as an important actor in region, as long as the country does not lose its sovereignty to one of the external powers. The government must also pay attention to the threats posed and the dangers of radical groups, and share positivity among the population. Lebanese spend and invest based on their "mood". When they are scared, they don't spend and the economy goes into recession. When the mood is scary, investors, both local and foreign, do not come. When the mood is optimistic, people spend and invest, and the economy grows.

4. I would not exaggerate if I say that the energy security is the mother of all economic and financial problems in Lebanon. The state of the energy sector symbolizes to the public Lebanon's profound challenges of governance, inclusion and accountability. Perhaps the solution for this problem is not that complicated. The reforms in this sector should embrace the private sector participation and open the market to competition and allow companies to produce electricity. The key is to break up the monopoly by EDL and allow all the local and international companies to produce electricity. This means that government should not privatize the sector but liberalize the market. 

5. Developing a public venture capital to early-stage, high-potential, high risk, growth startup companies based in Lebanon.

6. Providing R&D incentives in order to encourage and support industrial research and development in Lebanon.

7. Implementing the decentralization reform.

8. Incentivizing large-scale investment and firm-level projects which aim at improvements to energy and water.

9. Investing in social safety nets has the highest return on investment; from economic, political and security perspectives.

10. Providing young entrepreneurs with access to tools, mentorship, community and financial resources that support each stage of their business’s development and growth. This will help promoting entrepreneurship as a solution to youth unemployment and underemployment. (The Lebanese economy is able to create only 3,000 jobs annually). Also, government should encourage universities to develop their innovation hubs.

11. Investing in infrastructure. Lebanon has definitely many economic opportunities thanks to its geographic situation. One of China’s most ambitious economic and foreign policy projects, the so-called “One Belt, One Road” initiative, also referred to as the Silk Road, will surely boost the economic development and promote prosperity. But this initiative and others that consider Lebanon as a hub for the reconstruction of Syria need an upgraded infrastructure. Thus, the government has to rehabilitate the infrastructure using latest technologies. 

12. Developing public innovation incubators. 

 

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