Speech of PM Fuad Siniora in World Islamic Economic Forum- Panel on Leadership: Entrepreneurship as Vehicle of Growth

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I would like to focus my intervention on three issues: I) the role and virtues of entrepreneurship as we have seen it and witnessed it in Lebanon and abroad; II) the danger to entrepreneurship in light of historic developments in the Arab world; and III) the needed support at all levels for the emerging Arab democracies.

  • The Role and Virtues of Entrepreneurship
  • It is increasingly and widely known besides being proven that entrepreneurship and its innovative features constitute an important factor in the economic growth and social development of any country, regardless of geographic or political factors. History has shown us that private sector led growth is the sustainable growth. Hundreds of years of human civilization have taught us that the private sector is better capable to “efficiently” allocate the scarce resources, with the exception of major public goods (building of highways, dams, etc…), while the State is better equipped with rendering the distribution of these resources in an “equitable” manner via taxation and social programs, etc…
  • The state on the other hand has some other important roles in setting regulation and making sure that are being respected. Besides that the rule of Law is consistently and fairly all with no exception. Moreover the state has to encourage entrepreneurship by providing all the facilities and the conducive environment to the young entrepreneurship to be more proactive and helping them by assuring than that while starting a new business there will be real ease of entry and as well ease of exit. Moreover, lesser red tape stability of laws and regulations, consistently improving level of governance at the level of the government department  and lesser corruption and more transparency.
  • Coming from Lebanon, the country that has always been the model in the region for the entrepreneurial spirit and capabilities of its people domestically and abroad. We can be witness to the virtues of a dynamic private sector through the global success stories, such as Carlos Ghosn, Carlos Slim, and Hayek of Swatch. Lebanese expatriates, constituting 3 times the size of the Lebanese population, have been very effective in transmitting entrepreneurial spirit and leadership qualities to the countries that they worked in.
  • Entrepreneurial spirit and private sector leadership has also filled an important vacuum inside Lebanon,  especially in times when the governments in Lebanon has failed or was forced to fail in carrying the torch of growth and development: civil war (1975-1990), political paralysis (2007-2008), and political void (2011).  In few words, the Lebanese entrepreneurial spirit has been and remains the life boat out of stormy local and regional political conditions.
  • The good thing in Lebanon is that despite all political divisions on several key issues, and with the exceptions of few odd voices, the belief in a vibrant dynamic private sector as the vertebral column of the economy is deep-rooted in the Lebanese culture. Entrepreneurship and private property are protected by the constitution in Lebanon.


  • The Risks that might endanger the Perception of Entrepreneurship and the behavior towards it in light of Arab Developments and specifically the Arab Spring
  • This feature has always made Lebanon unique in the Arab world, where typically, the State has been very “interventionist” in many of the other Arab countries. The transition to market economies was recent in most Arab countries; and still, this transition had many shortcomings.
  • In light of what is taking place in the region (the Arab Spring), an important big risk on entrepreneurship  may materialize with the wrong path that many Arab revolutions may take in case they derive the wrong conclusions from the “transition” experience of the last 20 years, when “socialist economic systems” were transformed into more market-oriented economies.
  • But the transition in many countries in the Arab world, marked mostly by a macroeconomic stabilization that brought down the fiscal imbalance and inflation, partly through exchange rate stabilization, has failed to “trickle down” into more opportunities, more jobs, and fair and equitable growth. The reason is the lack of institutional reforms that allow more participation and that are conducive to investments, SME development and the creation of job opportunities; the lack of progress on institutional reforms was compounded by the problems of corruption and poor governance, which are also impediments to sustainable growth and the role of the entrepreneurial spirit.
  • What emerged was a “distorted” market economy, where the connected few made fortunes on non-transparent privatization deals, major real estate developments and touristic projects. But the majority of the population, especially the youth, whether educated or not, suffered from the lack of growth in labor-intensive sectors, and also the lack of growth in the high value added sectors of the knowledge-based economy, such as IT, programming, software development, which are the new industries that are generating jobs in other emerging markets such as China and India.
  • A very important lesson that should be drawn from the recent developments and the experiences of the last few years in the Arab World is that Government can no longer be run as a black box. More disclosure and better level of transparency should be applied and adopted. Besides more liberalization should be applied whereby all the stakeholders in any project and not only the shareholders should  be included and encouraged to participate in the shaping of the future of the government and the individual institutions.
  • Reform is a way of thinking and a commitment at the same time. Besides it is a continuous effort to be exerted by all concerned. It is very similar to running on the treadmill.
  • It is important not to lose focus on the real issue: the culprit was not the market-based economy, or privatization, or liberalization. The reality is that none has been really applied. The culprit is the lack of reforms that should have accompanied these initiatives, and which would have guaranteed a more efficient and a more equitable distribution of growth and resources.
  • The risk of return to old fashioned and outdated economic models that have failed in the past is real. Hence the importance of the role that can be played by such forum and by the regional institutions and leaders.  Also the importance of the model that Islamic countries such as Malaysia, Indonesia, and Turkey can play as a model of economic development that successfully married the virtues of entrepreneurship with the values of Islam.


  • The Needed Support for Arab Democracies
  • Hence the need to come forward with the advancement of a new concept of the role of the State. The State that creates the appropriate environment that is conducive for investment and equitable growth, hence a sustainable one; the State that empowers its citizens through the appropriate education, which includes vocational schools and technical training; the State that provides for health and develops the best possible retirement schemes; the State that regulates and supervises rather than produce and distributes in most sectors; except the sector where there is a case for it such as public goods, infrastructure, security and the provision law and order.
  • Coming to the specific needs of the Arab countries emerging from revolutions, the $40 billion funding that has been pledged so far is an important support for the Egyptian and the Tunisian revolts; but the need remains for the transnational investments in sectors such as transport, power, and water, which in turn generate big projects and trickle down to Small and Medium Enterprises. This would be an important vehicle to creating job opportunities and tackle the youth unemployment problem, which was at the heart of these revolts.
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