Lebanon's industrial exports drop 25 percent in July

BEIRUT: Head of the Association of Lebanese Industrialists Fadi Abboud said Friday that  industrial export has dropped by 25 percent in July and 28 percent in June due to the slump in the global market, high cost of production and the lack of support from the government and private sector. “The non-competitiveness of our industry has hurt our exports to other state while the rest of our neighbors are subsidizing their industries,” Abboud told The Daily Star. 

Over the past four years, Lebanese industrial exports rose by an annual average of seven to eight percent but the sector received a blow since the global credit crunch. 

Lebanon’s exports are estimated at more than $4 billion, $3.5 billion of which are industrial products, according to official statistics

Abboud, who has been lobbying hard to promote Lebanese industry and reduce the high cost of production, argued that Lebanon can never compete in this “unfair” competitive market. 

“Look at Egypt, Syria, Jordan and the GCC states. They are all backing their local industries while our government is not paying much attention to this sector,” he said. 

Citing an example, Abboud said that each container shipped by the industrialists abroad costs around $500 just to board the ship. 

“We pay $100 for truck to transport the container to Beirut port, $100 fees for the port and the government and the rest of the $300 are pure robbery,” he explained. 

Abboud said that port inspectors and shipping agents usually inspect the container thoroughly and delay the loading to the ship, prompting industrialists to pay additional money to expedite the inspection. 

The industrialists must also pay LL60,000 for the country of origin certificate for each container shipped by sea. 

Industrialists complain about the high cost of production such as expensive electricity, fuel oil, industrial zones and salaries of laborers. 

Abboud said that the global trade has dropped eight percent as a result of the recession that have affected many countries. 

“When the market shrinks, people try to find cheaper and better prices. We must admit that many regional states produce the same Lebanese manufactured goods and at cheaper prices,” he said. 

The average cost of energy in Lebanon is four times more than most regional countries and this add more burden on the industrialists. “Our social security, industrial land, communications, port of Beirut, the airport are all more expensive than Arab states,” Abboud said. 

He added that while many oil-rich Gulf states depend on cheap foreign laborers to work in industrial plants, Lebanon is unable for many reasons to hire foreign laborers who will work for low salaries. 

He said that Saudi Arabia offers lots of incentives to their local manufactures such as subsidized loans. 

“They [Saudis] give industrial land free of charge and import a foreign work force from any country the industrialists want,” Abboud said. 

He was also critical of the private sector which is not trying enough to facilitate the work of industrialists. 

But Abboud said that Lebanese industrialists have made up the drop in exports with a good sale in the local market thanks to the large number of Lebanese expatriates who visited Lebanon this summer.