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Tuesday 5 January 2021

World Bank Note to Build Back the Port of Beirut

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  6 forum posts

BEIRUT (World Bank press service) — Reforming Lebanon’s port sector is a prerequisite for building back a better Port of Beirut and revitalizing the Lebanese economy, according to a new World Bank note that aims to provide guidance to policymakers on the crucial additional requirements for the rebuilding of the Port of Beirut (PoB).

Reforming and Rebuilding Lebanon’s Port Sector (PDF)
Lessons from global best practices.
(Click to download)

The note titled Reforming and Rebuilding Lebanon’s Port Sector: Lessons from Global Practices summarizes global best practices in port governance and border management reforms, and offers a set of guiding principles to help inform port sector reforms in Lebanon and pave the way to rebuild a better PoB. The note also draws on extensive consultations with public and private sector organizations, civil society, academia, and the diplomatic and donor communities.

Following the August 4, 2020, massive PoB explosion that devastated the city, killing at least 200 people, wounding thousands, and displacing around 300,000, a Rapid Damage and Needs Assessment (RDNA), prepared by the World Bank in cooperation with the United Nations and the European Union, estimated damage to the PoB at about US$350 million. Five months after the tragic event, there is still a need to balance the immediate actions needed to secure Lebanon’s vital imports with the opportunity this crisis offers to "build back better" the ports system of Lebanon and stimulate trade and economic growth.

The Port of Beirut is the main gateway for the external trade of Lebanon, but it has failed in its key role as an enabler of economic development in the country by failing to guarantee safe and efficient operations and undertaking the necessary long-term strategic planning. These failures are a direct result of the current mismanagement and lack of good governance of the Port that was established in a legal vacuum and adheres to a port management system that arguably reflects the complex political-economic realities of Lebanon, and which as a result run counter to many recognized good practices.

The note argues that a crucial pre-requisite to the rebuilding of the Port is the establishment of a robust institutional framework for the port sector. This framework will pave the way to rebuild a modern, transparent and efficient port and to restore trust of the Lebanese society and port users into its capacity to strengthen the economic fabric and provide support in overcoming the country’s economic crisis.

“A new national port sector strategy is needed to optimize port infrastructure across Lebanon and to serve best the country and allow improved transit and trade”, said Saroj Kumar Jha, World Bank Mashreq Regional Director. “Building back better means revisiting the sitting and sizing of the PoB, and rebalancing roles and investments in other ports and other logistics infrastructure using an economic corridor approach to position Lebanon to benefit from future opportunities in the Mashreq region.”

The note also argues that the reconstruction roadmap of the Port of Beirut should have four key building blocks:

  1. a new governance structure based on the landlord port model;
  2. efficient and modern Customs, border agency and trade processes that have an essential role in addressing transparency, predictability and security issues;
  3. open and transparent bidding processes for selecting investors, operators or concessionaires;
  4. quality infrastructure that is contingent on a countrywide strategy for the port sector and a revised masterplan for the Port of Beirut.

When effectively implemented in a transparent and participatory manner, these reforms would meet the demands and aspirations of the Lebanese people and all stakeholders towards the efficient functioning of the Port. The World Bank Group stands ready to engage with the port sector stakeholders and a reform-minded government to reform the port sector of Lebanon and rebuild a modern and efficient Port, based on the global best practice presented in this Note.

  Forum posts

  • Since France left its colonies/protectorates it’s been a downhill slide everywhere. Algeria is a striking example, a country that has become an open-air waste dump!

  • We talk about Lebanon, but we will talk about France in the same way in a few years or even a few months. The problems are all the same in the world and only slightly more exacerbated in Lebanon. Hence their progress on the wrong track. The economic system is broken but the politicians and citizens don’t want to see it to protect their small or big interests. The trouble is that they never get enough.

  • With no strong industry or natural resources, Lebanon has tried for years to attract foreign capital, going so far as to offer 20% interest on dollar deposits (the Ponzi scheme). This earned it the nickname of the Switzerland of the Middle East. These flows have gradually dried up, mainly due to geopolitical tensions in the region.

    Iran, which was helping the Shiite community, has been weakened by American economic sanctions. The Gulf countries, affected by the fall in oil prices, have also reduced their investments. The conflicts in Iraq and Syria have destabilised the whole region. As a result, the financial sector is going through a crisis of confidence that no longer allows it to fulfil its role, which was to finance the economy and especially public institutions, which have accumulated deficits for decades.

  • Since the 1950s, Lebanon has depended on money transfers from the diaspora, Lebanon has no oil but it enjoys another form of rent, that of remittances from the diaspora. More than 700,000 Lebanese work abroad, especially in the Gulf countries. They send money to their families. But this dependence weakens the Lebanese economy. The arrival of money from the diaspora is a form of easy money. They prefer to import and consume rather than invest or produce locally. Not to mention the ultra-deficit trade balance, with Lebanon importing more than 80% of its goods, a real catastrophe

  • How to forget the Lebanese political class which is governed, by clan chief, who since decades have been looting the treasury.

  • The global crisis of Covid has not helped. The country’s debt is now approaching $100 billion, or more than 170% of GDP. In March, the Lebanese government announced that it was unable to pay the first tranche of its debt ($1.2 billion) and all its treasury bills issued in dollars. Finally, Saudi Arabia, which has been Lebanon’s financial guarantor for a long time, has cut off the tap.

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