International consulting group McKinsey & Company will submit a recommendation to the Lebanese government in the next five to six months on the ideal economic model Lebanon should follow in the future.
Lebanese Minister of Economy and Trade Raed Khoury said last week, “I just signed a contract with McKinsey & Company, which will act as a consultant group and recommend the ideal economic model for Lebanon.
We don’t have an economic model to begin with, and McKinsey advisers will coordinate with all ministries, government agencies and the private sector to make recommendations,” the minister told The Daily Star.
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McKinsey & Company is a global consulting group with offices worldwide. The company has helped many countries in the region, most notably Saudi Arabia, to revitalize their economies and identify their strengths and weaknesses.
Khoury said the contract, which is valued at $1.5 million, involves workshops, meetings with officials, collecting data and analyzing each economic sector. “Our economy is not sustainable in medium and long term. We cannot rely on banks forever. We want the remaining sectors to be as strong as banks,” the minister explained.
He said the consultancy group would identify sectors that have added value for the Lebanese economy, and that the main focus would be on sectors such as industry and agriculture. “McKinsey will create a policy for every economic sector in the country in order to promote and protect these sectors,” Khoury said.
He argued that the new recommendations would help attract foreign investments in these sectors.
“This will boost GDP, improve exports, create more jobs and ensure a sustainable income for Lebanon.
“President Michel Aoun and many officials believe that the current economic model cannot survive in the long run and more attention should be paid to the productive sectors,” Khoury said.
He said that nearly all political parties and groups in Lebanon would support the efforts of McKinsey to revitalize the economy: “No one will oppose or block the efforts of McKinsey. It is in the interests of all parties to cooperate with this group for the benefit of the economy.”
Khoury said that Lebanon may not be in a position to compete with other countries in all industries and agricultural production. “The group will advise us on what sectors are economically viable and what’s not. The government will study these recommendations and put forward a policy to protect specific industries that are crucial for growth,” he added.
The minister said that based on these recommendations, the government may offer tax incentives to some sectors to help them prosper and grow in the future.
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Khoury emphasized that Lebanon cannot continue to borrow from Lebanese banks indefinitely, as this approach will lead to problems in the future.
“We don’t have a real economy in Lebanon. The model we have been living in for the past 25 years is no longer sustainable. We need a change and focus on sectors that can create real growth,” he added.
The minister said that Lebanon should utilize its human and financial resources to achieve real economic growth.
By Osama Habib
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