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
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.