I have had a nightmare with my eyes wide open. It was brutal and unrelenting…without even a monster in sight. I thought that the holiday period would provide an opportunity for relaxation and some enjoyable reading. In fact, it has had the exact opposite effect.

When we slow down from our regular working-day pace, we tend to see things a little more clearly. Our national deficiencies hit us straight in the face. Similarly, when we read about the world around us, we inevitably find chinks in our economy’s armor…too many chinks, unfortunately.

While the rest of the world is steaming purposefully ahead, we, in Lebanon, have spent the last few weeks discussing among ourselves how to start a dialogue…among ourselves.

Meanwhile, Brazil and Turkey, for example, which used to be considered economic basket-cases about twenty years ago, are both remarkably well-managed today, with inflation in single digits and growth above 5 percent.

Fareed Zakaria, of Newsweek, says that “this shift is happening all over the world. From Thailand to South Africa to Slovakia to Mexico countries are far better managed economically than they have ever been.”

Mr. Zakaria, writing in Newsweek’s yearly Special Edition “Issues 2006,” goes on to say that “even in cases where political constraints make it difficult to push far-reaching reforms, as in Brazil, Mexico or India, governments still manage their affairs sensibly.”

Mr. Zakaria claims that these improvements in economic management are due to “knowledge” and that “a knowledge-based world will be a healthier and richer world.”

Thomas Friedman, also writing in Newsweek’s Special Edition, agrees with Fareed Zakaria’s premise. He says that knowledge is more important today “as a source of both economic advantage and military strength.”

Mr. Friedman says that “it is no surprise, therefore, that those societies with the most innovative scientists, universities, engineers and technology companies…have enjoyed rising standards of living over those societies without them.”

He says that knowledge has shifted the global power game from a military race into “a race for IQs. The more knowledge workers your country has…the more productive your economy and, therefore, the more powerful your country.”

Quoting the Chief Executive of Rolls-Royce, Mr. Friedman writes that in today’s world, “we will speak less and less about developed, developing and underdeveloped countries but more and more about smart, smarter and smartest countries.”

How smart is Lebanon by comparison?

Maybe Tony Blair could help us answer this question which is at the root of my eyes-wide-open nightmare that I mentioned at the beginning of this article.

In the same Newsweek Special Edition, Britain’s Prime Minister writes that “complaining about globalization is as pointless as trying to turn back the tide.” He says that there are no such debates in China. “They [the Chinese] are not worrying about potential threats but are busy seizing the opportunities… So, too, are the other emerging economies in Asia and South America.”

Mr. Blair says that “there is no secret recipe for economic success. The difficulty is getting all the right ingredients in place. Successful countries need a stable economic framework so firms, and families, can plan with confidence. They need open markets, strong encouragement of enterprise with labor-market flexibility to foster dynamism and adaptability. And, more important today than ever, they need sustained investment in science, education and lifelong learning to make the most of the skills and talents of all their people—to create, in fact, true knowledge economies.”

The Prime Minister claims that the fastest-growing cities in America and Europe are those with the highest proportions of knowledge workers. But, he warns that, compared to America, “on any relative index of a modern economy — skills, R&D, patents, IT — Europe is falling behind.”

In order to put the breaks on Britain’s perceived slide, Mr. Blair says that his government is “encouraging investment in R&D through new tax help, and have given extra support to small businesses. We have also put sustained investment into education. We have massively expanded, in partnership with business, modern apprenticeships and workplace learning initiatives. Through the training and opportunities available in our New Deal program, we have virtually eliminated long-term youth unemployment.”

He continues that Britain is “investing unprecedented amounts in modernizing science laboratories, and building links between our universities and business through new science parks.”

Mr. Blair concluded that “this emphasis on enterprise, on education and skills, and partnership is central to our ambition of boosting social mobility, tackling poverty, and spreading prosperity.”

Singapore’s Prime Minister, Lee Hsien Loong, on the other hand, says that his country has “a long tradition of gathering and trading goods, including knowledge. But in the next phase, we must move beyond gathering and managing knowledge to emphasize creating our own knowledge.” In order to do this, Singapore is doubling R&D investments over the next five years.

Prime Minister Lee concludes that “globalization will force nations to reallocate resources, restructure their economies and reorient their societies for the future.” He says that, in Singapore, “we are remaking ourselves into a key node in the knowledge network, securing our place under the sun.” I cannot help but remember that, thirty five years ago, Singapore wanted to learn from Lebanon how to shape its economy?

Given the breath-taking developments in the world that I described above, how do we rate Lebanon’s readiness to seize the opportunities presented by globalization? I’ll let the reader give the mark.

When we consider the increasingly central role that “knowledge” is playing in “smart, smarter and smartest countries,” how do we rank Lebanon’s initiatives concerning universities, laboratories, science and math education, innovation and R&D investment? Again, I’ll let the reader do the ranking. The manner in which Lebanese politicians treat our national university may be indicative of the low esteem in which “knowledge” is held in this country.

How can we fill the vacuum in strategic thinking that exists? Many of us hoped that the EU-Lebanon Association Agreement would point us in the right direction, but the pace of reform and change has been painfully slow. Nevertheless, we still believe that EU-funded programmes such as Lebanon’s Quality Programme — QUALEB and the Euro-Lebanese Center for Industrial Modernisation — ELCIM, could help the private sector to modernize and upgrade, as competition is increasingly moving away from prices towards quality.

We are confident that QUALEB will help the Association of Lebanese Industrialists to create an R&D Center and Incubator at ALI’s premises in the Port of Beirut. R&D and innovation do not have to be the exclusive preserve of hi-tech industries, such as rocket science or the aerospace industry. They could also be helpful in product development relating to our cuisine, which is witnessing a boom in worldwide consumer demand.

Innovation, design, and entrepreneurship are not really alien to our graduates, but they need encouragement and facilities, such as incubators, where they could unleash their talents. ALI’s proposal is ready, but the Beirut port authority seems to have better projects for our export center! Lebanon is lucky in a sense because the last word in this matter is for Minister Mohammad Safadi, who is a firm believer in promoting knowledge and creative employment, as he has demonstrated in his own educational and charitable foundations. I must also point out that the decision to subsidize rents in government buildings is with the ministry of finance. Minister Jihad Azour is pushing the private sector to create a think tante the promote entrepreneurship. I am sure we will adopt our efforts. The Economical Associations in Lebanon canny some of the blame too! We should be doing much more, give us the chance and we will.

It may be an unfair comparison, but reading about Tony Blair’s and Lee Hsien Loong’s ideas, strategies, policies, foresight and long-term planning, how do our own politicians fair? I’m tempted to help the reader reach an answer, but I will keep my thoughts to myself.

In the country that prides itself in its human resources (Lebanon’s oil, bla bla bla), what can we say when we reflect on the fate of Lebanon’s youth, as far as unemployment and emigration are concerned? When India and China are managing to attract expatriate and emigrant scientists to come back from Europe and the States, should it not be a capital crime to allow Lebanese youth to leave this country? Can we continue to allow our country to lose the “race for IQs?”

Equally importantly, in the country that promotes itself as a modern-day Garden of Eden, how can we forgive those who have ruined our environment? It is said that we cannot do damage to the Earth without damaging ourselves and, that what affects nature affects all of us-there are no real walls between us. In light of this, is it excusable for the government not to have an alternative-energy policy, based on solar and wind technologies? Is it excusable to forbid environmentally-friendly and cost-efficient hybrid (dual-engine) cars because a 1930s law bars importing them to Lebanon? In the name of the environment we close all our quarries, thereby increasing the price of sand and gravel by more than 300% and then issue licenses for the lucky ones! They are lucky according to Lebanese standards, because they found the right partners.

When we consider the lack of foresight, long-term planning and productivity in Lebanon, because, among others, we are busy discussing among ourselves how to start a dialogue among ourselves, is it any wonder that I am having nightmares during the holidays and in the middle of the day? I feel like being in Europe in the 18th century. I see the light at the end of the tunnel, but it is becoming faint. I hope 2006 to be the year to remind all of us that we are now living in the 21st century.

How can Lebanon find its place under the sun with a national agenda that includes only one single item: discussions between religious factions about a “national” dialogue among…sectarian factions? I know the Lebanese deserve much, much better.

How can we make our politicians and policy-makers read the International Herald Tribune (instead of Syrian newspapers) so they could find out, among others, that Intel, the world’s largest chip maker (not the potato type, for those in Lebanon who are not tech-savvy), is investing $3.5 billion to build a new factory in Israel. Intel already employs 6,000 workers in Israel, and with the new factory, the number will go up to 8,000. The Israeli government offered Intel $525 million worth of incentives in order to encourage the company to invest in Israel.

While we’re on the subject of Israel, let me inform our policy-makers (if they are not too busy reading informative regional newspapers) that Israel’s high-technology sector generates more than $13 billion of annual exports, or about 40% of Israel’s total exports. Furthermore, Israel has about 70 companies listed on the Nasdaq Stock Market in the U.S.

In light of these developments, is it legitimate to ask where is Lebanon’s “index of a modern economy — skills, R&D, patents, IT”? Where are the government’s policies for “sustained investment in science, education and lifelong learning to make the most of the skills and talents of…” all Lebanese people. Where is our own New Deal to eradicate youth unemployment (which stands at about 70% according to the EU?

Where is Lebanon’s purposeful national dialogue which leads us to reorient our society for the future…and not the past? Who will lead the Lebanese and encourage them to create their own knowledge, rather than keep importing beyond our means?

My nightmare is coming back…I feel the gap between Lebanon and other countries, friendly and not so friendly, is widening to the point of no return. It is urgent for the Lebanese to rely on their own efforts in order to fuel growth, create jobs and chart pathways to economic prosperity.

I hope that this article acts as a wake up call for Lebanese policy-makers. They urgently need to start focusing their minds and energies on the issues, policies and initiatives that need to be addressed and enacted in the days and months ahead, to ensure that Lebanon’s economy is well-equipped for the challenges of the “knowledge economy.” They need to build Lebanon’s comparative advantages, enhance competitiveness and improve productivity, so that our country’s energies are unleashed to achieve the economic growth necessary for creating new jobs and improving the living standards of all citizens.


Fady Abboud
 Association Of Lebanese Industry