In an era of increasing state intervention in national economies, Lebanon remains a holdout. Probably nowhere else is free enterprise carried to such lengths as in this eastern Mediterranean nation of less than three million people. The story of Lebanese industry can be summed up, as one local manufacturer put it, as "the world's ultimate example of Adam Smith's doctrine of laissez-faire in action."
Admittedly, state intervention in the private sector is not unknown, and plans for governmental activity are sporadically announced. But the heartbeat of industry in Lebanon is what the Lebanese themselves talk about as their own particular "mentality," an elusive mix of ingrained individualism, commercial aptitude, instantaneous adaptability and an unquenchable willingness to take chances on any sort of potentially profit-making activity—in sum, the very qualities that have spurred industrial growth since the dawn of the industrial revolution.
Traditionally, however, the Lebanese preferred trade and commerce to manufacturing. Indeed, before World War II only a few individuals were engaged in industries that could not better be described as handicrafts. But now light and medium industry is a far more important factor in the economy than is agriculture. Lebanon, today, can build small ships, assemble trucks, elevators and air conditioners, roll steel, pack meat, and manufacture an impressive list of products that includes copper cable, plastic and teak furniture, detergents, refrigerators, paint and textiles. Lebanon, furthermore, is the financial, communications and transport hub of the Middle East and runs a tourist industry worth roughly $200 million yearly. And since 1971, in a vast complex at Beirut International Airport, hundreds of highly skilled technicians have been stripping down Boeing 707's and overhauling them from nacelle to rudder at low cost and at a speed not always exceeded by even the advanced technology of America's aircraft industry. (See p. 42)
Proud Lebanese, seeing such growth, tend to speak of their country as the "Switzerland of the Middle East"—and there are resemblances. But a new generation of young industrialists are more realistic. None who were interviewed expect much expansion into areas of intricate technology and most candidly admit that published statistical projections tend to be unreliable. On the other hand they see no hard and fast limits to industrialization and generally agree on some broad outlines that suggest the scope and future of industry in the area.
One crucial fact they agree on is that industry is growing faster than other sectors. Even today some two-thirds of Lebanon's GDP or gross domestic product (which is substantially equal to the gross national product and used in preference to the GNP by economists studying developing nations) is derived from services. But industry's proportion of the GDP is getting larger. In a confidential report on the investment of Arab oil money seeping into Lebanon's financial centers, a leading Lebanese banker maintained that industrial production accounted for less than 13 percent of Lebanon's GDP in 1964, but had risen to at least 17 percent of a 1972 GDP worth more than $2.3 billion. According to local economists, moreover, industrial production probably accounts for 75 percent of the money coming into Lebanon from exports.
Industrial exports during this period, according to the banker, rose from $40 million to $133 million, an increase of 225 percent, and in 1972, according to a report from the Central Bank, went up 24.9 percent over 1971.
Compared to the massive statistics of, say, Japan and Germany, these figures may seem less than staggering. But the report also said that the industrial labor force has nearly doubled—to more than 100,000, about 20 percent of the total labor force—that employment in industry in the '70's equaled employment in agriculture for the first time and that agriculture's contribution to the GDP does not exceed 10 percent.
These are impressive figures since, in economic terms, major shifts of income and employment from agriculture to industry signal a breakthrough. They mean Lebanon has crossed an important economic frontier.
To be sure, some of those figures have to be approached with caution. Yet it is undeniable that despite a lack of resources, and despite recurring turmoil inside the country and around it, Lebanon today is booming. Near Tripoli in the north production at Lebanon's two cement plants is reported to have reached about 1.5 million tons in 1973, but exports dropped from about 40 percent of total production to less than 25 percent because of local demand.
One reason for the local construction boom has been the influx of money from the richer Arab oil-producing states. By the end of 1973, deposits in Lebanese banks available for lending amounted to $3.1 billion, most of it oil money. As early as 1971, investment experts Kidder, Peabody & Co. were openly confident that the Middle East would soon be a net exporter of capital, a forecast already coming true. Kuwait has played a major role in this, but in late 1973, a U.S. auto parts firm was negotiating a $30-million loan in Beirut and a Beirut-based investment firm was arranging financing for the $60 million purchase by Egyptair, Egypt's national airline, of five Boeing 707's.
This is a particularly impressive performance because in 1967 the combination of the Arab-Israeli War and the sudden collapse of an international, Beirut-based banking empire called Intra Bank had shattered the economy, seriously damaged the country's reputation as a financial center and left scores of Arab airlines, plants and trading companies in serious trouble.
Even today Lebanon, as a financial center, has problems. Profits are off and, some bankers say, Beirut banks are still not attracting their share of oil money. On the other hand Lebanon has some decided advantages. The Intra organization has revived as an investment company and revised banking laws should head off similar crashes. The country's banking secrecy laws are tight. There are no currency exchange controls. It is an Arab country in which Arab investors quite simply feel more comfortable.
Another distinct advantage is the international scope of Lebanese banks. There are already 18 foreign banks in Lebanon, 18 joint Lebanese-foreign banks and more coming. Despite a hefty $2.5-million bank license fee, major banks are pushing hard to find partners among the 38 Lebanese-owned banks. Through such links Lebanon's banks now reach, and will reach further, into financial centers around the world, and, as a result, attract more of the oil money.
How much of Lebanon's boom is due to this influx of money is anybody's guess. But some obviously is. In Beirut literally hundreds of high rise apartment buildings, office buildings and hotels—including a Hilton and a Holiday Inn—have been sprouting like weeds and a comparable display of activity is evident in Tripoli, the country's second city. In 1973, admittedly, construction in Beirut dropped off 30 percent as a result of political turmoil and sharp hikes in the cost of labor and materials. Even so, government records show that 1,140 construction permits were issued in 1972, a jump of more than 36 percent over the previous year, and land prices were reaching record heights.
On fashionable Hamra Street, for example, land that went for nearly $400 per square foot in 1973 was reportedly up to $800 per square foot in early 1974, but according to Elie Sehnaoui, a contractor now building the new American Embassy, the government is considering the country's first capital gains tax on the re-sale of land, a measure that could force down what he considers to be "absurdly high" prices.
Other indicators show a similar trend. Consumption of fuel produced at the country's two oil refineries rose to about 14.5 million tons in 1972, an increase of more than 13 percent; vehicles imported from abroad, as registered by the customs, totaled more than 19,000, an increase of more than 35 percent, bringing the total number of vehicles operated in Lebanon to nearly 200,000—despite import duties of over 30 percent. This adds up to about one vehicle to every 10 persons, compared to about one vehicle to every two persons in the United States.
The extent to which industry has contributed to the boom, or been aided by it, cannot be determined with exactness. As most businessmen in Lebanon will candidly admit, any figures they give on profits, turnover, employment or productivity are rarely precise because of a typically Mediterranean wariness concerning competition and taxation.
Official figures for all 1972 pharmaceutical exports, for example, total $16 million. But one firm alone, according to a well informed consultant, exports pharmaceuticals worth $8.8 million. Indeed some industrial concerns reputedly operate with no public accounting whatever. There is another factory which ships 70 percent of its output to Europe, has vast storage facilities, employs hundreds of workers and is capitalized at $3.3 million. Yet its exports do not appear anywhere in government reports on national trade.
On the other hand, the proliferation of plants on the outskirts of the city is concrete evidence—in both senses of the word—that industrial expansion is real and important. The largest industries are those producing textiles and foodstuffs but there are also factories which, though small by Western terms, cover an extremely large range. Among Lebanon's exports are aluminum, copper, iron and steel products; asbestos cement products as well as cement; chemical fertilizers; plastic products; sanitary fittings and equipment; paper and paper board products, and printed materials. There are factories making everything from chocolate biscuits to lighting fixtures, dishes to fashionable clothes, from Kleenex to steel office furniture and gas heaters.
Most of these industries are new and all are growing rapidly. In Kfarchima, a suburb where new plants jostle olive groves for space, the Lebanon Refrigerator Company, housed in a new two-story plant, turns out thousands of Frijex, Kelvinator and Cold Spot refrigerators a year. Only a few miles away the Lebanese Air Conditioning Company, LAIRCO, which assembles York air-conditioning units to U.S. specifications, is building a brand new plant. LAIRCO did not go into production until early 1973, yet by early 1974 had logged $1 million worth of orders. As a result LAIRCO has already ordered new equipment which will enable the firm to make its own fins for coil production, a vital component in air-conditioning equipment.
Even the older industries are new. Lebanon's biggest textile firm, which claims more than half of the country's textile production, is the Asseily family's Filiature Nationale de Coton. But its origins go back no further than 1938, when two brothers started the company as a small family firm. It now employs about 1,500 workers, 500 more than two years ago, and many of the spinning and weaving sections are operating on a three-shift basis. Five years ago, according to Pierre Asseily, Filiature Nationale's chairman and son of one of the founders, 70 percent of the spun cotton, synthetic yarns and woven cloth that the firm produced were for the local market; now the bulk of production goes abroad, primarily to Africa and Europe.
Emile Cortas, chairman and general manager of the Cortas Canning & Refrigerating Co., the country's leading exporter of canned goods, says it is only in the past five years that there has been a general appreciation of the industrial potential of Lebanon. He attributes the present activity to a number of factors, especially the Lebanese grasp of what one American industrialist described as the key to industrial success: find a need and fill it.
In the 1920's, while studying economics and business administration at the American University of Beirut, Mr. Cortas found such a need while writing a thesis on the possibility of food preservation as a local business. In 1927 he put his thesis to the test by producing and canning jams at his home. Two years later he opened a small factory near Beirut and went on to fruit concentrates, tomato paste and vinegar. During World War II he produced dehydrated and canned vegetables for the British Army and three years after the war opened cold storage facilities. He believes his was the first canning business anywhere in the Middle East and is still probably the largest, despite increasing competition from Syria, Egypt and such other Lebanese firms as Conserves Modernes and Interbrand, which packs fruit under license using the American brand name Libby's. From an initial production of about 50 tons a year, consisting mainly of jams in glass jars, the Cortas Co., with a work force that rises to 350 in season, has boosted production to 3,000 tons a year.
Ohannes H. Kassardjian, a former plumber, noted back in the 1930's that all the pipe fittings and valves and all the sanitary plumbing fixtures which he installed and repaired came from abroad. Why, he wondered, couldn't these essential products be made by Lebanese? He decided they could and in 1939 started a small iron foundry with 35 employees, which first produced simple castings—manhole covers and pipe fittings—and expanded steadily. Today his foundry produces 60 tons of cast iron a day, half of it in the form of sophisticated high-pressure fittings and valves, made from scrap metal bought locally, and stamped with his initials and trademark, "OK." In addition to making iron products, the plant houses a brass foundry that turns out valves, fittings and chromium-plated plumbing fixtures. The company has won contracts for water and sewage systems not only in the Arab world, but as far away as Hong Kong, which uses OK high-pressure fittings on its continually expanding municipal water projects.
More recently, Roy and Robert Hamady, sons of Lebanese immigrants to America, also found a need and filled it. Returning to Lebanon from the United States, the Hamadys investigated the possibilities of numerous industrial ventures and set up a small company called AMPAK in the picturesque mountain region of Sofar to make high quality packaged meat products such as bologna, hot dogs and bacon. All are manufactured, the Hamady brothers say, to the standards laid down by the U.S. Food and Drug Administration.
Market research like the Hamadys' investigations is rare in Lebanon. More often individuals just take a plunge and wind up with surprising success. An example is the country's largest furniture manufacturer, quaintly named Sleep Comfort, which began a few years after World War II as a four-man shop making mattresses. According to Nicholas Rebeiz, then Sleep Comfort's salesman, cashier and deliveryman, and now the firm's sales manager, Sleep Comfort got into the furniture business almost by accident. "A customer for a mattress would want a headboard, and we would make it for him ... then he would want a night stand ... then a chair ..." Today, Sleep Comfort's approximately 1,000-man labor force turns out more than 600 different items, many in teak and patterned after successful Scandinavian designs. But they have gotten into stainless steel too and they do all their own work, from upholstery to chrome plating. Sales, Mr. Rebeiz says, are increasing at the rate of 35 percent a year. In the first two months of 1973, 10,000 units were sold, 70 percent of them in Lebanon, but some to customers in Europe.
In discussing Sleep Comfort's operations Mr. Rebeiz talks like a modern, socially conscious western executive. He speaks of profit-sharing plans, the company's resident social worker, how the firm pays for the education of gifted students whose parents work for Sleep Comfort, of company recreational facilities, and how "we let the worker feel he is a human being."
Georges N. Frem, president of UNIPAK, the Union Packaging Corp., talks in a similar vein. "People are our main element," he says, pointing out that profits from their corrugated cardboard boxes are shared among UNIPAK's 200 employees, and that 15-year, interest-free loans are granted so that they can own their own homes.
Unlike most Lebanese firms, UNIPAK is a true shareholding company rather than a family-dominated firm. "This was an I experiment to see if a real shareholding company could grow up in Lebanon," Mr. Frem says. "We have proven that it is possible to be more successful operating as a group than as an individual or family."
UNIPAK's other objective, Mr. Frem says, was "to prove we could make a profit with an industrial project and at the same time reach a social goal." The goal was to assist in the sales of Lebanese apples, which had often wound up as a glut on the market, largely because they had not been properly merchandised. Since one key to merchandising was better packing, the firm believed, UNIPAK, with a technological assist from the Mead Corp., a giant American packing concern, began production in 1967 with a capacity of 20,000 tons of corrugated boxes a year. The company also re-pulps waste paper to make molded pulp trays and this year will start producing ventilated plastic cartons for the storage of apples which, Mr. Frem says, will increase the life of Lebanese fruit from three to six months.
UNIPAK has also formed another company called First Baby Food of Lebanon which is exactly that: the first local baby food company. Capitalized at $2 million, it will make strained baby food, powdered formulas and vitamin supplements. According to Mr. Frem, working with foreign firms is, for a country like Lebanon, often the key to success for companies with enthusiasm and capital, but lacking technology. Recently, for example, the American Olin Corp., owners of the "Winchester" trademark, concluded an agreement with three local businessmen to manufacture shotgun shells in Lebanon for distribution in several countries of the Middle East where hunting is one of the most popular sports. Earlier, the Sursock family, one of the country's leading business families, joined forces with the Otis Elevator Company to manufacture elevators and install the intricate controls. Prior to that, Otis imports, despite what the company thought was superior technology, often ran second to European firms. Now Otis, which started with 150 men, boasts a work force of 450 skilled craftsmen, and has seen production leap from 100 cars a year to 450 and claims 55 percent of the booming local elevator market.
The country's other elevator factory, founded 25 years ago by Gaby Rayes, claims about 15 percent of the local market and also makes metal office furniture. It is more typical of Lebanese industrial concerns. "I was given some money from an uncle to import domestic appliances," Mr. Rayes says. "We set up a workshop to service the appliances, and then found the workshop was our main business."
Another growing firm is Cesar Debbas and Sons, an electrical contracting business that installed Lebanon's first telephone line, supplied Beirut with gas lighting, then went into manufacturing in 1961, producing interior fluorescent lighting fittings. The work force at the plant has risen from 10 to about 200 and 80,000 lighting fixtures are being turned out this year, according to the company's director, Robert C. Debbas. Some of its products are now produced under license with the American firm Day-brite. Mr. Debbas predicts his volume will double within the next two years.
Also related to construction, Lebanon has two small steel rolling mills and two aluminum extrusion plants, which are complemented by dozens of aluminum fabricating plants. These are typically Lebanese businesses, in that no local raw materials are used. Billets and ingots are imported and transformed into finished products. And if some bankers quietly question their viability, they also say they appear profitable. Sciale Aluminum is headed by a former contractor, Selim Hassib Najjar, who says he spotted a need for locally produced aluminum materials while working in construction. Since he began operations, production has increased from less than 60 tons a year to more than 2,500 tons. He faces competition from SIDEM, the Société Pour l'lndustrie des Métaux, which operates under license with a French firm.
The two steel companies, Consolidated Steel Lebanon, located near Byblos, the ancient Phoenician coastal city north of Beirut, and the Lebanon Steel Mill Co., near Tripoli, both started in the early 1960's, importing billets and producing steel bars for reinforced concrete. Amin Adib, director of Lebanon Steel's Beirut branch, says his firm's production has risen from 20,000 tons to about 85,000 tons, and the work force now numbers about 500. The two companies, according to Mr. Adib, meet about 90 percent of Lebanon's construction needs.
Among other construction related industries, there are two glass factories, Soliver and Malibar, which produce sheet glass for windows and doors in addition to making the bottles used locally for soft drinks, beer and wine. Recently, Soliver entered into an arrangement with St. Gobain, the French high quality glass firm, to build a new plant south of Beirut and produce St. Gobain products under license.
There is also the Société Nationale des Tubes, which makes steel pipes in a factory in Dakwani near Beirut. Capitalized at just under $2 million, the company was founded in 1957 by Khalil Sahnaoui, one of a family of seven brothers with financial interests in agriculture, shipping, banking and the manufacture of pipes, chemicals and wood products. According to director Marwan Sahnaoui, a son of the founder, the plant turns out up to 5,000 miles of welded steel pipe per year, principally for the Lebanese market. It produces 21 types of light and medium weight galvanized steel pipe for heating, plumbing and scaffolding in a largely automated operation employing about 120 men.
Another firm, Liban Cables, manufactures some 200 products out of imported copper rods, including household wiring, elevator, telephone and television cables and high-tension power lines. "We started production in 1969 with what you might call half a shift," explains Bechara Tacla, the company's candid general director. "We turned out about 25 tons of cable a month and finished the year in the red. But last year we were working three shifts and producing 400 tons monthly; that's 4,500 miles of drawn copper wire each day! We sold $8 million worth of cable and made over $600,000 profit, more than our entire net sales five years ago. For 1974 we've projected sales of $12 million—and so far we're right on schedule."
Liban Cables is 55 percent Lebanese owned (its staff of 275 is totally Lebanese) with the remaining 45 percent shared equally by the U.S. firm, Phelps Dodge, and France's Cables de Lyons. Aside from its own production, the company contributed further to Lebanon's economy last year by purchasing $500,000 worth of locally manufactured wooden drums and $1 million worth of Lebanese produced PVC plastic coating.
Also in this category is Eternit, an asbestos-cement plant at Chekka, on the coast near Tripoli. A Lebanese-controlled company producing patented products of its parent Swiss firm, Eternit has a work force of more than 500. Its production has increased 10 times since it started operations in 1951, according to a company spokesman, and 70 percent of its products, which include high-pressure pipes, the major product, corrugated sheets, roofing and such minor items as park benches and flower pots, are exported.
Eternit has marketing agreements with a small but innovative young company called Polyfab, which designs, manufactures and sells standardized panels for prefabricated buildings under the trade name Rapidhome. To make the panels, Polyfab takes two Eternit asbestos cement sheets, sandwiches slabs of polyurethane foam between them and wraps an aluminum frame around the edges. Light and sturdy, they are trucked from factory to building site where a six-man factory team can erect a house in about two weeks once the foundation is in place. Company engineers are now working on a modular steel and wood foundation which will enable contractors to truck completely assembled five-ton buildings to the site. The insulating properties of the rigid foam lining permit use in cold or heat. The company, for example, has built six model ski chalets in Lebanon and Aramco has erected about 80 bachelor apartments in Saudi Arabia. Polyfab exports about 80 percent of its production and reported sales worth $600,000 in 1973.
One of the major success stories in Lebanese industry is that of LECICO, the Lebanese Ceramic Industries Co., which makes heavy use of Lebanon's meager natural resources—clay, sandstone, limestone and dolomite—to produce glazed porcelain wall tiles, toilets, washstands and other bathroom fixtures. From a 1962 low of 800 square meters of tiles a day LECICO's production has shot up to 3,600, according to technical director As'ad A. Najjar, and production of bathroom fixtures, which started with 400 pieces a day, has risen to 1,800 pieces a day, or 600 tons a month. Altogether LECICO now has 425 workers at its plants south of Beirut and employs about 100 more at its mines in the Bekaa Valley.
Beirut's location has had a great deal to do with its industrial development. Since the closure of the Suez Canal, for example, the port of Beirut has become the most important Arab Mediterranean port in the Middle East, and a trans-shipment point besides. From Beirut, goods are transferred to trucks and transported across the mountains and the desert directly to Saudi Arabia and the small, rich Gulf countries. Many garment factories are located in the free zone of the port so that their cloth can be imported duty free, and the garments trucked to the Gulf in sealed vehicles without having to pay local customs fees.
Because of its location, Lebanon has spawned an important air-transport industry. Part of that industry is handled by the burgeoning and profitable fleet of 19 Boeing 707's and 720B's owned by Middle East Airlines and flown by an international team of nearly 80 captains, 90 first officers and 70 flight engineers. In 1972, MEA, which at one stage seriously tried to swap Lebanese apples for British VC-10's, reported a net profit of $10 million. MEA is also, with 5,000 employees, Lebanon's largest employer after the government.
Equally impressive is Trans-Mediterranean Airways, an around-the-world, Beirut-based freight airline which in terms of scheduled route mileage is the world's largest cargo carrier and which, in 1973, earned profits close to $7.5 million.
TMA was founded by ex-Aramco employee, Munir Abu-Haidar, who leased two converted World War II bombers in 1953 and began transporting vegetables and supplies to oil camps in Saudi Arabia. Branching out, he began to build an organization of seasoned pilots and a world-wide network of skilled freight salesmen. Today TMA has close to 1,800 employees, including business representatives stationed in 58 offices around the world, and a small but rugged team of captains, co-pilots and flight engineers. This team flies seven Boeing 707-320C's on a grinding, constantly shifting schedule that includes three eastbound and two-westbound round-the-world routes a week.
Both these airlines have stimulated catering, another service industry with international overtones. The country's leading caterer, Albert Abela, not only operates the airport restaurant but also handles inflight catering for international airlines—virtually all of them—which fly into Beirut. In addition, according to the owner, the company operates hotels, restaurants and supermarkets, does catering for schools and hospitals and builds and manages oil company field camps as far afield as Southeast Asia and the North Sea. Altogether, Abela says, he employs 11,000 people in 30 countries.
But industry, in the sense of manufacturing goods that can be sold at home abroad, rather than providing services, is coming more and more to dominate the thinking of Lebanese entrepreneurs—especially the young representatives of leading entrepreneurial families whose interlocking interests usually cover such diverse fields as real estate and foreign investment.
Michel Doumet, for example, is involved in a phosphatic fertilizer plant, the Lebanon Chemicals Company, which, he says, has boosted its production to 400,000 tons a year since it opened in 1958, and exports 90 percent of it.
Another example is George E. Asseily, whose family fortune is based on the gigantic cotton spinning and weaving enterprise mentioned earlier. Asseily has recently expanded into retailing with a line of household and fashion textile products that are sold, among other places, in Harrod's, London's most famous department store. In a bold move "to rid the Lebanese of their terrible complex against local goods," (in the past, labels on Lebanon's finished export products have often disguised their point of origin), Mr. Asseily defiantly created a brand name, DOMTEX, a contraction of the words "domestic" and "textiles," and demands that all his products carry a "Made in Lebanon" label.
Still another example is Fouad F. Shoucair, whose family long dominated the wholesale cloth business in the region. The Shoucair enterprises are now challenging the supremacy of two large Armenian family firms in the field of garment manufacturing. In 1972, with the aid of Swedish technicians, Mr. Shoucair opened the Shoucair Société Nationale de l'Habillement, a factory making stylish trousers—1,500 a day. Mr. Shoucair, instead of basing growth on cheap labor, aims to compete with European standards of quality and productivity.
There is also Carrosserie Abillama, the largest Lebanese builder of bodies for trucks and buses. Started 40 years ago by Amir Joseph Abillama, a member of an old ruling family from the Mount Lebanon area, Carrosserie Abillama was originally a small shop in Beirut producing occasional motor vehicle bodies and wooden horse-drawn carriages. Abillama now has two new plants, one of them especially for buses, in Dbaya south of Beirut, where, according to a company engineer, Nehme Fayad, more than 300 workers are employed. In 1971, Mr. Fayad said, Abillama produced bodies and cabs for 450 dump trucks, 75 fixed body trucks, 105 buses, 120 ambulances, 52 pickup trucks, and 25 tank trucks. They also produced 102 refrigerated trailers and 55 airport vehicles.
One of the old-school entrepreneurial families—possibly, many believe, the country's richest—is the Gandour family, which operates M.O. Gandour & Sons who, in a plant big enough to assemble aircraft, produce a range of food products that includes, besides chocolates, candy and chewing gum, spaghetti, cooking oils, cookies and crackers.
Few of Lebanon's enterprises boast plants as large as Gandour's and many enterprises listed as "industries"—like the printing industry—are really no more than obscure one-man shops. But even in printing the totals are impressive. Lebanon has more than 140 publishing houses which turn out close to 1,100 book titles, 40 newspapers and 100 periodicals a year. In Lebanon too are some 700 printing establishments, ranging from one-man shops with ancient foot-operated presses to about 20 establishments comparable to European printers. Although these firms, one printer said, are not huge, the quality often surpasses Europe's. One major company is the Middle East Export Press, Inc., which prints this magazine. Another is the Catholic Press, founded years ago by French Jesuits as an adjunct of St. Joseph's University. The Catholic Press, as a publishing house, publishes yearly 100,000 Arabic dictionaries, 150 book titles and numerous scholarly works including a 60-volume series on Islamic scholarship.
Jewelry is another "industry" that is scattered among obscure shops but whose exports are significant. Even official sources give $16 million as the 1972 total in exports, and Marwan Iskandar of Middle East Economic Consultants estimates that another $16 million is probably exported by couriers.
Obviously, industry in Lebanon is surging ahead. And if, to be quite realistic, the country's largest enterprises are still very small in Western terms, their potential is exciting. Industrial exports lead all other economic indicators, new industries are springing up overnight and whispers concerning new industries abound. The press has carried reports of negotiations for a tire plant and there is talk of building a third cement factory, a third oil refinery and a third mill to refine sugar from Lebanese grown sugar beets. Most recently there was even a report that British Leyland plans a $48-million plant to assemble Morris Mini's.
Whether or not such plans materialize, there is no denying that a push toward industrialization is on. About five years ago a group of young men banded together in an organization they call "Young Industry" to exchange ideas, establish better relations with workers, and lobby for more government support of industry.
Encouragingly, the government is beginning to respond. In 1972, it announced the formation, for the first time, of a full-scale Ministry of Industry. (There has been a Ministry of Commerce for years.) The following year, Dr. Selim A. Hoss, who had been president of the Banking Control Commission of the Bank of Lebanon, the country's central bank, was named chairman and general director of the new National Development Bank for Industry and Tourism, a joint venture between the government and 46 of Lebanon's 74 licensed private banks. With a capital of $23 million, it constitutes the nation's most ambitious program for supplying much needed medium and long-range financing for industrial development.
Obstacles, no doubt, are legion. Commercial enterprises still enjoy a higher prestige than industrial ones among some young people and imported goods still have a snobbish appeal in many quarters. The same individualism that emboldened early entrepreneurs also delays the development of a sound managerial structure since numerous Lebanese managers, chafing under the restraints of a company structure, break loose to found their own businesses.
On the other hand, Lebanon has always seemed to have a secret formula for financial success—as one of the country's favorite stories suggests. This story, which surfaces time and again over the years, has to do with a new, reform-minded administration which goes to the United Nations and says the nation's prosperity is a mystery. Lebanon, the government says, has few natural resources, and not enough roads, water or electricity. Its harbor is overcrowded. Its markets are small. Nobody pays taxes. There are too many holidays. Inefficiency is rampant. In short, Lebanon, in economic terms, shouldn't survive. So what should it do? After months of exhaustive study the report comes in with this conclusion: "We don't know what you're doing, but whatever it is, keep doing it."
