Press Articles

Salameh: New Cabinet will attract foreign aid - 4 November, 2016

Country: Beirut,Lebanon


Nov 16

BEIRUT: Central Bank Governor Riad Salameh said Thursday the formation of a new government would attract foreign aid to Lebanon and help achieve a higher GDP growth. “The election of President Michel Aoun should lead to a normal activity of the Constitutional Institutions, thus increasing confidence in the economy. The formation of a new government would help by attracting foreign aid and mitigating the cost of the Syrian presence in Lebanon that we estimate at 5 percent of the GDP,” the governor said at the opening of the BDL Accelerate conference and exhibition. Salameh’s remarks reflected the prevailing upbeat mood in Lebanon after MP Saad Hariri was named to form the national government. “Lebanon is a resilient country. The Lebanese have gone through hardships. They have endured wars and political crises that would have destroyed the economy of many other nations. Yet, we kept building up our economy. It is with that strength and with that determination that we will build together the sector of the knowledge economy,” Salameh said. He also touched on the incentives offered by BDL to expand the size and profitability of Lebanese startups with main emphasis on technology and IT sector. “The success we encountered when we created synergies between bankers and entrepreneurs, with a view to develop the knowledge sector, has contributed to the emergence of new accelerators and incubators, the latest being smart ESA, as well as to the emergence of funds and many startup companies. We are encouraged by the results and we intend to pursue our efforts,” he added. Salameh revealed that BDL is seeking to make new partnerships in the technology and IT fields with other countries. “For instance, we are looking forward to a further expansion of the UK Lebanon Tech Hub that was initially created with our support. The purpose of the guarantees provided by Banque du Liban to banks is to create a sector that will offer employment opportunities to the Lebanese and will foster the efficiency and competitiveness of the Lebanese economy,” he said. Salameh stressed that the success of entrepreneurs in Lebanon was a success for all Lebanese. “Using the funding provided under Circular 331, and taking advantage of BDL guarantee, implies that your companies have to be Lebanese companies operating in Lebanon. The banks initiating the investments have to make sure that the funds invested by them are compliant with the Circular. I believe that technology is like music. Both have no borders. But musical composers, like tech companies, have a nationality,” he said. He vowed to provide more funds for the digital sector in the future. “We have increased the margin of funds that banks could dedicate to the financing of the digital sector, by authorizing them to invest, with our guarantee, up to 4 percent of their own funds in this sector, compared to 3 percent previously. I hope that banks and entrepreneurs will make the best use of these funds. More funds will be available for the digital sector, since the own funds of banks will be growing faster, as a result of the Central Bank last financial engineering,” he added. The president of the Association of Banks in Lebanon Joseph Torbey shed light on the role of Lebanese banks in financing Lebanese startups and the technology sector. “Venture capital firms have been active in establishing funds and have raised so far considerable amount of money to help financing capital seeking startups in the information and communications technology and in other creative industries. They have also developed their work to help entrepreneurs translate their new ideas into products, processes and services. Such venture capital funds have received already investment commitments from a large number of Lebanese banks in the amount close to $330 million as at 30/6/2016,” Torbey said. He added that banks plan to expand their funding to the technology sector. “More banks and funds are expected to participate in the future once the risk involved and projects assessments are more mastered by the different players and the knowledge economy gains breadth and depth, especially that the BDL circulars 331 and 419 authorize the use of up to 4 percent of equity at banks in equity financing startups that is the equivalent of $650 million,” Torbey said. Nicolas Chammas, president of MIT and head of Beirut Traders Association, encouraged foreign firms to invest in Lebanon. “I invite each and every one of you to take advantage of the crisis that our part of the region here is going through. It is here a stagnation at best or even a recession. So let us all together reengineer or reboot our way of this recession that we are going through. Let us each one of us asks what I can contribute to rewriting the new rules or codes of the current economy,” Chammas said. The annual event attracted hundreds of startups and companies from Lebanon and abroad.