The EBRD is set to welcome its 66th member country and the fifth from the southern and eastern Mediterranean (SEMED) region once the Lebanese government finalises the last steps of the joining process, paving the way for the bank to set up a permanent office in Beirut.
“Following a decision by the Lebanese parliament [in March], the country’s authorities are finalising steps for Lebanon to become an EBRD shareholder,” an EBRD spokesperson told bne IntelliNews. “Once all the formalities are done in Lebanon, the country will become a member and a shareholder of the EBRD.”
BusinessNews.com.lb reported a government source as saying in March that Lebanon’s stake is the “same size as that of similar states”.
The next step will be for the EBRD’s board of governors to vote on Lebanon becoming a country of operations, or recipient country. Assuming a positive outcome, the bank can start its activities in Lebanon and open up a permanent office, the spokesperson said.
Janet Heckman, the new EBRD managing director for the SEMED region, told Reuters in March that the bank expected to start local operations in the second quarter of 2017, though the spokesperson admitted that such a timing now looks optimistic. “No, it’s [the board of governors’ vote] not scheduled for the annual meeting,” the spokesperson said, referring to the bank’s annual meeting in Cyprus on May 9-11.
The EBRD expanded its remit to the SEMED region in the wake of the Arab uprisings of 2011 that ushered in new democratic and reformist governments in some countries, though others have descended into civil war. The EBRD began by investing in Morocco and Tunisia in 2013, Egypt in 2014 and Morocco in 2015; it has invested over €3bn in almost 100 projects to date in the region.
The EBRD says it will focus on providing support in Lebanon for private sector competitiveness, promoting a sustainable supply of energy, enhancing the quality and efficiency of public service delivery, and raising private sector participation in public infrastructure.
Given the EBRD has already made significant contributions to international efforts to tackle the refugee crisis in the SEMED region caused by the civil war in Syria, it is expected to also do so in Lebanon, to where more than a million Syrians have fled. In March, Lebanese Prime Minister Saad al-Hariri warned that his country is close to “breaking point” because of the strains from hosting Syrian refugees, who now make up around a quarter of the country’s population.
The war and refugee crisis are also having huge detrimental effects on the Lebanese economy. The government calculates that the cumulative cost of the Syrian conflict to Lebanon was $18.15bn to the end of 2015, while annual economic growth has slowed to an estimated 1% in 2016 from an average of 8% prior to the war.
In April, the World Bank forecast that Lebanon could achieve GDP growth of 2.5% in 2017, provided the political process and economic reforms proceed smoothly.
“Assuming the political process does not revert back to a stalemate, improvements in the traditional economic drivers – tourism, real estate and construction – are likely to translate into a pickup in real GDP growth in 2017, which we project at 2.5%. We forecast growth over the medium term to remain around 2.5% annually as potential growth is contingent on the resolution of the Syrian conflict,” the World Bank said in its report on Lebanon.
“Lebanon is confronting a multitude of protracted shocks each of which can have the potential to alter the country in fundamental ways in the short to medium term. These include: security spillovers and economic challenges of the war in Syria; prolonged domestic political impasses and institutional paralysis; hosting the largest per capita refugee population in the world,” the report said.
US President Donald Trump's December 6 announcement that his administration has decided to unilaterally recognise Jerusalem as Israel's capital was described as “against international law” by ... more
Iranian President Hassan Rouhani on November 21 declared the end of the so-called Islamic State militant and terrorist group following decisive battles in Iraq and Syria. Stating that he wished to ... more
Iran is taking control of oil exports from Iraqi Kurdistan's giant Kirkuk field with Baghdad authorising the move as a reward for the Iranians' help in quelling the Kurds' late September push for ... more