Lebanon's economy: Here is an opportunity

All of these multinational companies were getting the same Internet speed I had at home.
by Jean Saïfi

14 June 2019 | 11:36

Source: by Annahar

  • by Jean Saïfi
  • Source: Annahar
  • Last update: 14 June 2019 | 11:36

A view of a halted construction site and another still under construction in the downtown district of the Lebanese capital Beirut. – AFP

Warning, You might not like the following text. You might enjoy it but the facts and content presented can be deemed sad yet true, at least this is my opinion.

This is evident when looking at our willingness to pay foreigners to accomplish and deliver specific and specialized work tasks while disregarding our own local workforce. 

I could have started this article in 1998 when I was still attending engineering school. Back then, in order to connect to the internet, we had to use the modem via the regular wired landline. Of course, in addition to the prepaid Internet charges and the landline fees (we had to dial a number to be connected), we had to find the right time slots in order to get connected for two reasons.

The first reason was to take advantage of the full capacity of the bandwidth and second, was to avoid our parents’ nagging telling us that the landline is continuously busy and that someone might be trying to call us.

I am sure some of you aren't even familiar with the modem dial-up sound nor its connection speed but I can recall that the maximum attained internet speed at that time couldn’t go beyond 24 kbps on downloads. That means it took around 4 minutes to download a 5 Mb photo, approximately the size of any regular photo taken today with a mobile phone and about 24 minutes to upload it and email it to a friend.

Then came the data satellite links and the genius idea of distributing the Internet by cable kicked off. I am still not sure if it was the internet network cables or the TV coaxial cables that started decorating our electricity pillars and rooftops, stretching from one building to another like an endless Tarzan rope – this scenery was a first for tourists and non-residents - now an unimagined “over ground infrastructure” gathering with other TV and network cables. 

This was a time where we had to disconnect our network cable from the desktop/laptop during winter time and take the risk of collecting the charge of thunderstorms while being online. I recall changing at least 2-3 network cards for my desktop and one motherboard during one winter.

While I was busy changing my network cards, the country was getting some of its infrastructure back and a couple of international companies started flocking to Lebanon. Some of these companies had representative offices while others had regional head offices serving the region and the Gulf countries. The airport was primitive at the time, the traffic was acceptable, most of the rebuilt downtown buildings were delivered with a lot of office space to let where skilled people and competent graduates were immediately available to integrate these multinationals and serve the entire region. It was an exceptional environment for the big companies to have offices with regional presence but there was one simple but major problem.

All of these multinational companies were getting the same Internet speed I had at home.

I am still not sure If I should have been proud of my home connection speed at that time or pity the staff working at these companies, especially that they were exchanging a big number of files (reporting, know-how sharing, etc.) between Lebanon and their head offices in the US, Europe or elsewhere as well as using the Internet for software downloads and updates needed.

The hope for a better Internet connection was there for these companies especially that there wasn’t a technical nor a scientific problem to solve. It all depended on the goodwill of the government to go along with the evolution of this field and keep up with the latest available technology in order to offer at least the same services that the other regional countries were / will be offering.

We all know what happened next… the evolution of the internet speed was so slow that most of the top companies relocated to other countries like Dubai, KSA, Turkey, Cyprus, etc., creating regional hubs to serve Lebanon and the region, and recruiting people from all over the world, especially from Egypt, Palestine, India, etc.

If only we’ve managed at that time to increase the Internet speed to 500 kbps, we would have maintained or even increased the presence of these companies in Lebanon. Lets breakdown what this 500 kbps Internet speed at least really means: we would have more Lebanese graduates and staff recruited locally, an increase in the airport activity thus a creation of another local airline to serve as a hub for the area, meaning more staffing in the aviation field (pilots, air hostesses and ground personnel), a real demand for real estate and furnished apartments rents as well as a higher occupancy at hotels due to short visits and Events for international visitors.

Needless to say, these people will have to eat in restaurants / fast food places, exercise their favorite hobbies, hang out for fun and of course, escape the busy city during weekends, which will stimulate internal tourism and boost the economy in the rural areas in parallel to the central districts.

We all know that the positive effect of the above easily expands to the energy, healthcare, telecommunication services, consumer and retails, and other sectors. The outcome of this would have been a sustainable economic environment where the government would have collected more income and corporate taxes than they would ever dream of.

Recently, I’ve participated in a technology event in San Francisco where the city accommodated more than 30,000 visitors for a full week. San Francisco has the required infrastructure to easily support this number of participants in terms of accommodation, public transportation, airports, digital infrastructure, etc. An 8.5% state tax escorted us in restaurants, hotels, coffee shops, etc.

Can you imagine the positive impact on the local businesses, communities and the government if such an event was held in Lebanon? That would be massive but this also means that we’ll have to expect and manage the arrival of one extra plane landing each 7 minutes for the next 24 hours at the airport in addition to its normal traffic, ensure safe and affordable transportation for these visitors from the airport to their local destination, etc. Can you picture an extra 30,000 people moving in a 30 minutes time-slot or so from Hamra or Ashrafieh to Downtown for an event? Do we have the needed infrastructure and services for that? Safe sidewalks? Underground?

After almost 2 decades, we’ve finally seen some improvements in the local Internet. The lack of infrastructure is still a major problem to be addressed and solved before the return of the dinosaurs! To bet on the exploration of petrol and external loans won’t be enough for everyone. Government collections should be increased due to higher growth and activity in the economy and not by increasing tax rates.

With a weak economic growth, it’s more important than ever to invest in long-term economic catalysts for development, such as science, technology and innovation. A critical factor in the potential of Lebanon to exploit any given technology will be the availability of a skilled workforce, in most cases competent graduates. The digital and electronic regulations and legislation should be on the fast track mainly to avoid increasing the gap with other countries and streamline the administrative procedures for better national efficiency.

Now comes the big questions: Is Blockchain technology on our agenda? Are we going to explore the Cloud services with the arrival of 5G? What about Nationwide E-Health, agricultural technologies and genetically engineered food (or will the local farmers throw apples again in the street for the same yearly TV scene)? Are we already planning for a free zone and a fast company setup procedure? Do we actually have a proper plan and a strong long-term strategy that will ensure a sustainable future or are we just operating in survival mode?

Jean Saïfi received an engineering degree from ESIB, USJ and a masters in management from SKEMA business school. He is an expert in innovation and strategy as well as a lecturer at the faculty of engineering, USJ.

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