Beirut, January 24, 2006— The International Finance Corporation, the private sector arm of the World Bank Group, this morning signed an agreement with Lebanon’s Ministry of Economy and Trade to simplify business registration procedures. The event took place at the Economic and Social Council, attended by H.E. Minister Sami Haddad, Minister of Economy and Trade, and IFC’s Regional Director for the Middle East and North Africa, Michael Essex.

The agreement is the result of a joint effort that began in October of last year, on the initiative of Minister Haddad, to address bureaucratic obstacles to doing business in Lebanon. A conference on the subject in October 2005, presented the findings of the World Bank and IFC’s annual “Doing Business” report. The conference concluded that the process of starting a business should be a key area of reform in Lebanon, as it represents a major hindrance to both local and foreign investors.

The aim of the project is to reduce the regulatory burden on the private sector, especially small and medium businesses, through a comprehensive restructuring of the relevant private business registration procedures and a reduction in the cost and time of these procedures to encourage both local and foreign investment to the country. In parallel with this activity, IFC will attempt to raise awareness on licensing and other procedures that investors are obliged to follow, with the objective of possibly broadening the reform agenda. The ultimate aim of all these activities is to improve Lebanon’s attractiveness as a location for private investment.

The project will consist of three main components, including: mapping of regulatory processes for company registration and benchmark surveys of sample firms; evaluation and re-engineering of processes, including the review of relevant laws and regulations; and implementation of new administrative processes and capacity building for civil servants for practical application of these procedures.

Minister Haddad said the project was “a necessity to encourage investment in Lebanon and to push the Lebanese economy forward towards sustainable growth and development.” He also emphasized the importance of addressing bureaucratic registration or licensing procedures at the national level, with the support of  relevant stakeholders from the private and public sector. Minister Haddad called for a joint effort of relevant Ministries, businesspeople, and associations.

In Lebanon, IFC has an investment portfolio of approximately $31m. Investments are spread over a number of sectors, including the financial sector, where IFC provides credits lines for trade finance, lending to small and medium enterprises, and for housing finance.  IFC has been active in other sectors in Lebanon including; agriculture, building materials, tourism, and most recently, in education.

In addition to the Business Registration Simplification project signed today, IFC recently completed a privatization project in the financial sector and a project focusing on corporate governance.  In addition IFC is currently working with the Association of Banks of Lebanon on a survey of corporate governance projects in the financial sector.

These programs are undertaken by The Private Enterprise Partnership for the Middle East and North Africa (PEP-MENA), IFC’s technical assistance facility that supports private sector development in the region. PEP-MENA focuses on improving the business-enabling and regulatory environment in the region; strengthening the financial sector; promoting the growth of small and medium enterprises and their support services, such as business organizations and consulting firms; helping restructure and privatize state-owned enterprises; and developing viable private sector and public-private partnership projects, especially in infrastructure.

The mission of IFC (www.ifc.org) is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY05, IFC has committed more than $49 billion of its own funds and arranged $24 billion in syndications for 3,319 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY05 was $19.3 billion for its own account and $5.3 billion held for participants in loan syndications. For more information, visit www.ifc.org.