Notwithstanding the fact that Lebanon is going through one of its most perilous crises in its history, one cannot remain idle waiting for solutions to fall from the sky. The fiscal and financial sector struggles are matters which need to be resolved through very precise policies in conformity with international regulations and standards.
But it is important to counterbalance these negative trends with governance that is more positive, and proactive to paint an exit strategy for Lebanon ensuring its emergence from its present economic woes and state of impoverishment.
Unfortunately, rather than focus actively on solutions, many of the people in power are still bickering over the dried out old crumbs scattered in the empty pie dish. Therefore, I have taken the liberty of articulating some important factors and trends which need to be taken into consideration when trying to rebirth Lebanon in this century.
This exercise might be deemed premature, but planning is the key to success, and it is never too soon to think ahead, because before you know it, it becomes too late. In the light of such planning, it is important to highlight both the strengths and the weakness of Lebanon, and despite the fact that it is a small country, it is fair to say that what it does not possess in land mass, it certainly makes up for in ingenuity, flair and entrepreneurship. In addition to the quality of its people, Lebanon’s geographical position has always made it a vibrant intersection for cultures, trade, migration, and excellence through diversity.
Today however, looking at the state of affairs in the country, it would seem that all has been lost and that Lebanon is confronting a very serious breakdown. Nevertheless, breakdowns and even death are part of the process of rebirth and therefore this time of chaos and dissolution must be transformed into a breakthrough, for the sake of the population’s survival.
In order to do this, I am presenting the basic elements of a vision for the country which will pave the way for Lebanon in the future, to allow it to effectively navigate the forthcoming big trends forecasted this century which will be shaping the world.
Certainly, every sector of the economy must be treated in the same way with careful analysis and projections, but in this paper, I will be focusing only on a couple of sectors, which are very strategic for Lebanon
In the Government Recovery Plan, which was mostly centered around resolving the financial crisis, they also relied on what they called two pillars of the economy to present a recovery model, and one of these was tourism. I would just like to say that for too long, Lebanon has relied on a model of existence which originated in the 50’s and 60’s that placed tourism as the main driving force for an economy that has been lodged for more than half a century in a permanent war zone. Lebanon has also been burdened by the continuous large presence of radicalized refugees, and it is a country that is extensively polluted. On top of everything else, it is now having to deal with the fallout of the new post-Covid-19 world order, where travel and tourism will become less profitable – at least in the short term.
Because of these challenges, tourism is to be placed on the backburner. Lebanon needs solutions and does not have the luxury of time, to wait for anything which is outside of its control.
The other image of Lebanon which no longer holds validity, is its description as the Switzerland of the Middle East, based on the touting of a fiscal haven, driven by a thriving secrecy-bound banking sector. Today, the financial sector is in ruins and it will not recover in the short term and therefor can no longer be considered a pillar of the Lebanese economy.
This old model of Lebanon’s economy built on tourism and the banking sector is now defunct. For a new economic model to arise, it needs to be driven by local, regional and global imperatives. Therefore, any understanding of the future positioning of Lebanon will need to take into account four major trends that are going to shape this century and which need to be taken seriously and dovetailed into any future strategic positioning for Lebanon, in order to ensure its economic and societal survival on a global scale.
1- The move away from fossil fuels. It is believed that in the decades to come oil receipts will contract amid the inevitable global clean energy transition that will accompany climate control action and drive transition towards clean energy.
2- The increasing dependence on technology and innovation. These are creating immense transformations in the way companies and nations organize production, trade goods, invest capital, and develop new products and processes. In addition, the increase in the rate of innovation means that comparative advantage is short-lived and threatens nationalistic concerns about competitiveness.
3- The inevitable advent of climate change by 2050 (which is only 30 years away). If left unregulated, this paints a bleak future in which it is projected that, across West Africa, tropical South America, the Middle East and Southeast Asia, there will be more than 100 days a year of deadly heat, leading to over 1 billion people being displaced and some of the world’s most populous cities being partially abandoned.
4. The shortage of food on the planet. As a result of climate change, and the over-population of the planet, it is estimated that food production will be insufficient, due to weather being too hot for humans to survive in significant food-growing areas, and due to chronic water shortages. With not enough food for the world’s population, prices will sky-rocket and social upheavals will ensue.
The first trend I want to discuss in relation to Lebanon is: The move away for fossil fuels.
Fossil fuels have recently undergone a severe devaluation, as a result of surpluses that cannot be stored and utilized. In the present economic model being touted for Lebanon, it is being projected that the nation will be saved by its energy resources. However, in the event that oil and gas are discovered in sufficient quantities to be of any value, there is still concern about the cost of extraction at the present rates (which exceed the price of the sale of the commodity, giving it a zero transactional value).
The expectation that Lebanon will be saved by its energy output is dangerous because it is putting all of Lebanon’s eggs in one basket. The energy industry has very volatile price points which are, and will remain essentially, out of Lebanon’s control and which risk placing Lebanon at the mercy of the fluctuations of world markets.
Therefore, the oil and gas sector in Lebanon should be viewed as a silver lining on top of an otherwise robust economy. It should be valued, if successful, as the wellspring of security, for the Lebanese people, to be managed through the Sovereign Fund that will be set up.
Lebanon needs to build its economy not just on the future promise of oil and gas but on the substantive development of other sectors which have been left lagging in the previous century. Among them is the agricultural sector which is a natural source of wealth for Lebanon.
The world is presently witnessing an agricultural revolution. While technological innovation is not new to agriculture, emergent technologies, such as the Internet of Things, Cloud Computing, robotics, and Artificial Intelligence (AI), have the potential to change farming beyond recognition.
Lebanon’s resurgence means that it needs to see how to place itself at the forefront of this agricultural revolution because of: its ideal geographic location at the doorway between the East and the West, its diverse climate, the fact that almost one-fourth of Lebanon’s land is cultivable (the highest proportion in the Arab world) and that most of these 240,000 hectares are rain fed.
This sector is a natural growth sector for Lebanon to exploit, and the advent of new technology and innovation can transform this small country into a haven for agricultural prosperity through the maximization of its natural assets. To do this we need to identify the sectors for greatest growth and proceed to captivate niche markets that can offer competitive advantages. These matters will all be discussed below, but first I want to elaborate on the next global trend in relation to the economic positioning of Lebanon.
The second trend is: The increasing global dependence on technology, innovation and integration.
Lebanon is ill-positioned today to take advantage of all the innovations that are accessible through modern technology because the infrastructure is outdated and the way that the industry has been parceled, is symptomatic of the monopolistic mentality of ownership of the ruling class, which does not yield a platform for open-ended access and usage. Therefore, new anti-protectionist laws need to be introduced and the sector rendered more competitive.
The first priority of course, is to supply uninterrupted affordable electricity, to power such connectivity. This sector has been the most damaged over the years as a result of bad management, political interventionism and illegal profiteering.
The second priority is to make such connectivity a priority through improved optic fiber connections and cloud usage in the shortest time possible. Without this infrastructure in place Lebanon will remain a mendicant nation stuck in the stone age of brick and mortar.
As for innovation, Lebanon has the education system and the know-how, as well as, the intellectual capital to excel in this field, provided that, the government prioritizes, creates and subsidizes the incubators for such development and allocates resources to the sector.
However, it is not enough to just talk about technology as a broad umbrella term, when discussing Lebanon’s strategic positioning on the world stage. It is important to identify the sectors where Lebanon can excel as a function of its strategic geographic position.
Lebanon as I mentioned above is a bridge between Europe, Asia and Africa. It possesses intrinsic advantages based on its resources including the quality and fertility of its soil, its moderate climate which also benefits from mini micro-climate zones, and of course there is the inherent advantage of a relatively well-educated population.
This brings me to the two next world trends that I want to discuss and in which Lebanon can play a strategic role, and possibly impact many generations to come.
The third trend is: The inevitable advent of climate change by 2050 which is only 30 years away. In the twentieth century, climate was dominated by near universal warming. Almost all parts of the globe had temperatures at the end of the century, that were significantly higher than when it began, due in part to the increased levels of greenhouse gases.
Global warming is predicted to affect the Middle East very badly and evidence abounds that it will be one of the regions, where climate change will hit hardest. For instance, summer temperatures across the region are expected to increase more than twice the global average. Prolonged heat waves, desertification, and droughts will make parts of the Middle East and North Africa uninhabitable, fueling violent competition over diminishing resources and provoking internal and external conflicts, even rendering governments in direct competition for resources with their neighbors, specifically, with regard to climate-induced water shortages (as witnessed in the existing water wars between Jordan, Syria, Lebanon and Israel. These Middle Eastern neighbors are already wrangling over water needed for irrigation, drinking, and hydropower production).
In Lebanon, the water situation is not as good as it should be, and varying degrees of water shortages have been experienced in the last decade. These were aggravated by the rapid population growth, urbanization, industry and irrigation developments. As a result, ground water levels have fallen, springs and wetland areas have dried up, and important rivers, such as the Litany, no longer flow in the dry season. In addition, reduced vegetation cover, due to deforestation, overgrazing, and poor surface management of cultivated lands, have led to reduced infiltration rate, increased runoff, soil erosion, and a decline in groundwater recharge. This deterioration in water retention places an immediate restraint on the economic growth of the agricultural sector. Added to this degradation, is also the changes in rainfall.
The question of water is therefore a crucially strategic issue for Lebanon and needs to be prioritized in any future development plan for the country. Water must be considered a vital resource not just for Lebanon’s internal use but for its survival.
Lebanon should therefore plan to double its efforts on innovation with a specific focus on deploying technologies that would alleviate resource scarcities before they arise. It should focus on technologies which will harness water extraction, and storage and become a model nation in terms of its commitment to clean energy research, specifically with regard to water and the invention of related technologies, such as: Reduced water-intensive agricultural practices, the reuse of wastewater through green bio-technology, the use of meteorological data, which can be transmitted in real or near time to national and regional databases to facilitate the dissemination of vital weather-related information to safeguard crops and livelihoods.
The bottom line is that when confronting the inevitable and inextricable trend of global warming, Lebanon should already be positioning itself to become a major reservoir of water supply to the region and an expert in the matter.
This brings me to the fourth global trend which should be at the forefront of Lebanon’s strategic thinking and positioning for the next half century, and this is: The matter of the forthcoming shortages of food on the planet.
The recent accumulation of disastrous events which have besieged Lebanon precipitated an impoverishment of the nation and revealed the weakest link in the sustainability of the country, namely, its over-reliance on the import of raw materials and goods to support and feed the Lebanese population.
Today, because of the catastrophic economic collapse, more than half the population will be pushed beneath the poverty line and the future outlook for a famine epidemic is looming dangerously on the horizon. Though these are very real considerations, I do not want to discuss what we can do to mitigate this present situation which, I have elaborated in previous papers, but instead, what I want to discuss what Lebanon can do to capitalize on the technological advances being made in the food and agricultural sector.
For Lebanon – which is not a big country in terms of landmass – to adapt to the future demands of food, an agricultural revolution is needed to distinguish its output in the arena of trade and contribute a sizeable source of income to the bottom line of its GDP.
These changes in agricultural policy must conform to the advantages offered by the indigenous topography of Lebanon, its climate, soil, and water access. Land use must be optimized for crops that are high yielding per square meter and are competitive in terms of the nature of the goods sold and their price points worldwide.
At present Lebanon’s Agriculture sector accounts for 6 percent of its GDP, In 2019, agricultural exports reached USD 193.1 million, growing at a CAGR of 2% during the 2010-2019 period, while the decline between 2014 and 2017 was due to the closure of the border areas with Syria.
But Lebanon has fallen behind dramatically due to its lack of innovation and its use of old models of production and distribution that have not advanced with the food innovation sector, nor evolved with the changes in taste and behavior, nor competed with the competitiveness caused by the broad and easy access of goods due to globalization.
Lebanon’s agricultural model needs to be completely revamped and adapted to future needs and made to benefit from the huge technological leaps in the sector.
Lebanon is an exporter of fruit and vegetables, it is self-sufficient in poultry and produces 45% of its pulses, only 15% of its wheat and 10% of its sugar needs. Coffee grasped the largest share of total crop exports with 11.7% of the total, followed by fresh or dried grapes (7.6%) and fresh or chilled potatoes (7.6%).
The agricultural sector connects the country with the Arab region and the world, opening business opportunities in many competitive markets though Arab countries remain Lebanon’s main export markets for agricultural products, accounting for 77.8% of total exports in 2019, including KSA (22%), Qatar (17%) and Syria (12%).
However, the problem is that Lebanon is also highly dependent on the import of agricultural products, with imports amounting to USD 1.47 billion in 2019. The private agri‑business companies import most of their goods, including seeds, fertilizers, plant protection materials and feed ingredients. Lebanon imports 78 percent of its dairy and meat products and its domestic cereal production only covers, on average, less than 20 percent of its consumption needs.
Looking down the road with regard to the issues of climate change and food shortages, Lebanon needs to be thinking very seriously about how these changes are going to impact its agriculture and food security, and one of the ways that it can do this is to become a jewel in the constellation of the vegetable and food chain of the world, distinguishing itself by the introduction of green practices and technological innovation to improve efficiency and resilience and to survive in an increasingly globally competitive world where the need for constant innovation is essential.
The land of Lebanon itself, is a fruit and vegetable paradise, and this should become the trademark of the new Lebanon. To achieve this, Lebanon, must engage in a determined approach to clean up its environment and to rehabilitate the soil which has been destroyed by decades of chemical use. This effort can be led by a move towards developing a credible organic nationwide farming policy that can become a special feature for exports.
The choice to move towards becoming a world supplier of organic produce is driven by the fact that it is a rapidly growing market -The organic food and grocery retail market size was recently valued globally at USD 11.7 trillion in 2019, and is expected to grow at a compound annual growth rate (CAGR) of 5.0% from 2020 to 2027. This important shift towards natural and organic food for health reasons, is because people are realizing that the risk of many diseases can be decreased, and health can be preserved by adopting a correct diet and lifestyle.
For this to happen we need to create the “Grow Organic Agriculture in Lebanon” (GOAL) directive and make local sustainable organic agriculture a prime policy for future economic growth.
Under this high standards and quality umbrella, we can utilize the inherent assets of Lebanon in terms of its climate, topography and water access to promote new trending crops which have increasing market value, such as, medicinal plants (including cannabis) as well as, what is now being termed « Superfoods », which is an umbrella term used to refer to various varieties of food with high nutritional benefits.
The Global « Superfoods » market size is expected to reach $209.1 billion by 2026, rising at a market growth of 7.3% CAGR during the forecast period.
Increasing healthcare costs, growing geriatric population, food innovations, changing lifestyle, and medical discoveries have benefitted the demand for superfoods and consequently the overall market growth. Ascending demand for natural, nutrient-rich food containing vitamins and essential minerals is further boosting the market for superfoods. Furthermore, extensive R&D activities and the advent of new monitoring technologies are expected to drive the market for superfoods.
The superfood market has both horizontal and vertical applications and derivatives. It is segmented into fruits, herbs, roots, grains, cereals, and vegetables and its derivatives are segmented into the categories of supplements, bakery confectionery, snacks, beverages, cosmetics and medicinal formulations.
The soil in Lebanon is ideal for capitalizing on this promising market. Globally, the fruits and vegetables segment of the “superfood” classification is set to experience favorable growth driven by factors such as rising middle-class population, upsurge in disposable income, rapid urbanization, changing consumer lifestyle, and the rising popularity of veganism. statistics state that almost one out five consumers in the West consider themselves “plant-forward”, meaning that they follow a diet not necessarily vegan or vegetarian, yet they prefer approximately 70% of their meals to contain plant-based, 100% clean ingredients.
As consumer needs rapidly evolve, food companies must re-imagine the way fresh, plant-based foods are grown, prepared, delivered and ultimately brought to the table. Plant-based, non-dairy alternatives are driving big change in the sector. Plant-based is a long-term format shift that will dramatically change the choices that consumers make, and Lebanon is ideally placed to supply and become a leader in the field.
Some examples of superfoods that would be ideal for development in Lebanon are: Flax for protein and fabric, chia seeds, peas for protein production, beetroot, pomegranate, mulberries, blueberries, grape seeds, grapefruit seeds for their antioxidant properties, oregano oil, watermelon seeds, avocados and avocado oil and walnuts for oil, food and cosmetics, hemp for protein and fabric production as well as, construction materials, soy for food and protein supplements, aloe vera for cosmetics, agave cactus for its sugar and alcohol in the fabrication of tequila, Juniper berries for the manufacturing of Gin and more…
Finally, consumers are becoming more responsible in their choice of foods, and taking into account elements such as pollution deriving from production plants, the quantity of energy used in production, a preference for recycled materials, the amount of pesticides, hormones, or antibiotics used in production, as well as, the effects of Genetically Modified Crops (GMO) on their overall health. They want to know and understand what ingredients are going into their food and they are reading labels. These educated consumers are a change-maker for the industry ranging from the field to the shelf.
Therefore, the Lebanese agricultural sector has the potential to expand widely to global markets if local suppliers adopt international standards and follow export requirements. To do this, Lebanon has to improve its regulatory environment in the food and agricultural sector by establishing laws, creating green policies and providing incentives to guide Lebanon down this unique path by insuring the enforcement of international standards for safety and organic certification.
The government must empower and enhance the function of existing laboratories and facilities pertinent to the Ministry of Agriculture, and it must fund and grow, the Food and Drug Administration Division to monitor quality, health hazards, as well as, the over-use of pesticides. (Presently produce from the Bekaa Valley is registering dangerously high levels of nitrates at 200mg/100 as opposed to 50/100, which is the International maximum norm).
Not only can Lebanon capitalize on its agricultural bounty, but it can also position itself as a technological innovator in this field. There are technologies that should be adapted and developed today which could put Lebanon at the forefront of this field of agricultural innovation in the development of:
Mapping technology to determine the suitability of the land for farming models, automated irrigation, crop monitoring through the use of drones, climate monitoring, crop rotation to maximize growth, permaculture, biodiversity, bio-waste management, robotics, seed banks, urban and vertical planting, blockchain access to lists of information linking sourcing to end user management for global distribution and local consumption.. the list is endless.
I would like to conclude by saying that for Lebanon to be reborn all of its productive sectors need to be revitalized and the agricultural sector is chief among them. People may think when reading this paper that this matter is superfluous and that there are more pressing issues to deal with, but I insist that food and agriculture are at the forefront of the mechanism of salvation for Lebanon.
Form my position as ambassador in Jordan which is a key link in the distribution chain of Lebanese goods throughout the Middle East, even during the worst times of the Covid-19 crisis and lockdowns, Lebanese produce trucks continued to flow to the neighboring Arab countries. In Jordan alone, between 80 and 150 fruit and vegetable trucks delivered daily Lebanese produce locally and to the Gulf. Agriculture is Lebanon’s lifeblood.
We can just keep talking about deficits, loss, famine, and destitution, but on the other hand, we have to begin urgently to articulate short, and long term, solutions for the viability of the nation. In this vision for a viable future both water and agriculture which go hand in hand are deemed key resources for the future survival of Lebanon.
The cornucopia of Lebanon’s fresh fruit and vegetables have been part of its magic, and today we need that magic to help turn Lebanon’s fate around and to become its trademark of excellence worldwide.
Lebanon needs to transform itself into a high end “boutique nation” that excels in perfection, quality of service, ingenuity and craftsmanship in all its sectors, and once again strive to become the jewel in the crown of the Middle East.
Until then the future is unwritten.
Tracy Chamoun. June 2020