The guide pointed to Lebanon's "many investment-enabling strengths" that had encouraged foreign companies to set up offices in recent years, including "a free market, a highly dollarised economy, the absence of controls on the movement of capital and foreign exchange, a highly educated labour force, a good quality of life and limited restrictions on investors".

The three "best prospect sectors" were named as information and communication technology (ICT), pharmaceuticals and insurance.

Lebanon has "the fundamental building blocks" to become a regional centre for technology, the paper said. These building blocks are a highly-educated and multilingual workforce, a strong private sector, world-class advertising firms, and multilingual media content providers and web portals. In addition, the Lebanese government's plans to regulate and upgrade its "outdated and costly" ICT infrastructure in the near future will offer significant opportunities to foreign investors, according to the guide.

With regard to pharmaceuticals, the local pharmaceutical manufacturing industry was qualified as "weak", with 92-95% of pharmaceuticals products imported to Lebanon through over 50 pharmaceutical importing firms. Lebanon, the report states, is the leading importer of pharmaceutical drugs in the Levant region and its market generates around $400m every year in retail sales.

According to Armand Phares, the president of the Lebanese Syndicate of Pharmaceutical Importers, the health sector has potential since "health is essential to human beings, under all conditions - war and peace." He told OBG that in Lebanon's case, the sector is quite well organised, which makes it easier to spotlight weaknesses. He said updating regulations was one area of weakness but that in this regard, the Syndicate had been working "very hard" with the minister for issuing an applicative decree that would improve the regulatory environment for importers and manufacturers. "The text is more or less ready," Phares told OBG and is waiting for the minister to approve and sign it before being sent to the Council of Ministers for approval. Phares said he is optimistic tangible progress will be achieved in the "next few weeks".

With regard to the insurance sector, the report stated, "after having sustained indirect losses due to the war in July-August 2006, insurance companies are on the way to a speedy recovery".

Predictions from within the sector point to a growing need for all kinds of policies, especially those of health and life. "Moreover, due to a large number of reconstruction projects that are already underway, policies covering construction work are also in great demand".

Elie Nasnas, president of the Association of Lebanese Insurance Companies (ACAL), told OBG there is great potential for growth in life policies if incentives are implemented. ACAL figures show that between 2000 and 2005, life premiums increased by 136% to reach $202m while non-life premiums increased over the same period by 35% to reach $427m. According to ACAL, applying a historic combined average growth rate (CAGR) leads to a total market exceeding $1,04bn in 2010. In a country that has only 25% of its population insured, other areas of potential spotlighted by Nasnas include fire policies (decennial insurance) for new buildings, medical policies and liability insurance such as third party liability, professional liability and professional malpractice (doctors, lawyers, engineers).

On a general level, Nasnas pointed to the pioneering role of Lebanese insurers in their operations in the Arab region over the past five decades and to the professionalism of Lebanese insurers in keeping their companies and commitments to clients throughout 30 years of wars and economic crises.

Another investment area with potential identified is the raft of projects that will see the light of day through the Council for Development and Reconstruction (CDR). Potentially $2bn worth of projects will be executed in the next three years, mostly thanks to foreign loans, while there are promises for an additional $1bn for post-war reconstruction. The CDR has completed a preliminary draft of a 12-year vision plan, as well as a five-year investment plan (2006-2011) that includes a list of projects by sector including water supply, wastewater, solid waste, health, transportation, education, power and telecom. The plan has been coordinated with concerned ministries and has been submitted to the Council of Ministers for approval.

Source: Oxford Busines Group