3 APRIL 2008

COOPERATION AGREEMENT BETWEEN LODZ AND TRIPOLI

On Thursday 3 April 2008, the Charge d'Affaires a.i. of Lebanon Mr. Kabalan Frangieh made an official visit to the Central Poland Chamber of Commerce of Lodz to participate in a conference entitled "Syria and Lebanon nearer to Lodz" which was organized by the President of Chamber of Commerce Dr Witold Gerlicz.

The purpose of the visit was to sign a cooperation agreement between the Chamber of Commerce, Industry and Agriculture of Tripoli and North Lebanon and the Central Poland Chamber of Commerce of Lodz.

Among the dignitaries attending the conference were the Governor of Lodz Ms. Jolanta Chelminska and the Deputy Mayor of Lodz Mr. Jaroslaw Wojcieszek.

The Charge d'Affaires a.i. gave an address at the conference in which he praised the activities of the Chamber of Commerce of Lodz which led to the signing of this Cooperation Agreement.

Below is the text of the Cooperation Agreement and of the address of the Charge d'Affaires a.i. and some pictures taken during the conference.

see: www.uw.lodz.pl

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Address delivered by the Charge d'Affaires a.i. of LEBANON
Kabalan Frangieh
At the Chamber of commerce of Lodz 3 April 2007

Doctor Witold Gerlicz
President of the Regional Chamber of Commerce of Lodz
Her.E. Ms. Wissal Issa Charge d' Affaires of Syria
Excellencies
Businessmen and women
Ladies and Gentlemen

It is a pleasure and an honor for me to have been invited to the historic city of Łodź by the Regional Chamber of Commerce of Łodż to speak about Lebanon, the Lebanese economy, and the possibilities of cooperation in the economic, commercial and trade fields between Poland in general, the region of Łodź in particular and Lebanon. But let me first express my warm thanks to Mr.Witold W. Gerlicz, President of the Regional Chamber of Commerce of Lodź, for organizing this very important conference and for inviting us. Your presence today reflects an interest in Lebanon of which I am greatly appreciative. Thank you all for coming. My presentation will start with an overview of Lebanon and then an introduction of the Lebanese economy. I will speak later about the potential of economic relations between Lebanon and Poland

Overview of Lebanon
Lebanon is a small country on the Eastern Mediterranean sea. Its area is 10.452 square kilometers and it is located at the meeting point of three continents, Asia, Europe and Africa and for centuries, it has been at the crossroads of a great number of civilizations. Although small in area, Lebanon is known for the diversity of its geography, landscape, culture and history. The contrasts between the high snow-capped mountains and the arid hills, the cool and dry climate of the interior and the humid heat of the coast, signify the richness of the country. The population of Lebanon is about 3.750.000 inhabitants, with about 12.000.000 of Lebanese origin living abroad.

Before the civil war that erupted in 1975, Lebanon was known as an attractive tourist destination. Lebanon had a fine reputation as a commercial and financial center for the Middle East. With the civil war ending in October 1989 by an agreement signed by all the factions, Lebanon has started rebuilding its infrastructure and reconstituting its institutions. With amazing speed, Lebanon was able to regain its role in the region and most of the reconstruction projects were finalized in record time. Now Lebanon is again an active democratic country with a stable economy.

The current political events overshadow a naturally beautiful, hospitable and historic country, the small size of which is not at all related to the accomplishments it has achieved over time. It is worth knowing that Lebanon is a parliamentary republic. Our parliament is elected by citizens who are 21 years old and above. Women have had the right to vote in Lebanon since 1952. The 128 members of the Parliament are elected for a period of 4 years and the parliament elects a President of the Republic whose term of service is 6 years non renewable. We have in Lebanon a total of 18 Moslem and Christian religious sects officially recognized by the constitution. Therefore there is a delicate balance of power whereby seats in the Parliament and the Cabinet as well as high-level posts of the administration are equally divided between Christians and Moslems. According to a National Pact adopted in 1943 on the eve of our independence, the President of the Republic is a Christian Maronite, the Speaker of the Parliament is a Shiite Moslem and the Prime Minister is a Sunni Moslem. This confessional equilibrium prevails only in the public sector while the private sector is completely free of any religious power sharing.

The Lebanese Economy
Lebanon is and has always been a free market economy. Private property has always been respected and protected. And since Lebanon is such a small country, we do not have significant natural resources and our economy is not based on heavy industry. Let us see how the three sectors, Agriculture, Industry and Services contribute to our GDP that totals around 20 billion US dollars. The per capita income in Lebanon is around 5,000 US dollars per year.

1: Agriculture:
Agriculture constitutes around 12% of our GDP. The high mountains and deep valleys of Lebanon leave only about 20% of arable land. The most important agricultural products of Lebanon are citrus fruits, grapes, tomatoes, apples, vegetables of all kinds, potatoes, olives and wine, the latter of which is exported to many countries and which has received many international awards. Lebanon is also a producer of tobacco and herds of sheep and goats are seen throughout the country.
Lebanon's agricultural exports go primarily to the Arab countries such as Saudi Arabia, Kuwait, the United Arab Emirates and Egypt.

2: Industry:
The contribution of Industry to the Lebanese GDP reaches around 21%. As I mentioned earlier, Lebanon does not rely on heavy industry but only on light industry. Our main industrial products are: cement, jewelry, textiles, chemical products, furniture products and oil refining. Lebanon is also a producer of a variety of agro-industrial products like canned food, olive oil, chocolate etc…

3: Services:
Services are the major sector in the Lebanese economy. This sector constitutes around 67% of our GDP. Lebanon is known for the quality of the services that it provides to the consumers in banking, international trade, and tourism.

The banking system in Lebanon is known to be one of the best in the world. It is strong, reliable, well developed, efficient and customer friendly. There are around 85 banks in this small country, each one having multiple branches in different towns and villages. Since Lebanon has no currency restrictions, customers can open accounts in the bank and currency of their choice. The only limitations on international transactions are those imposed by international organizations in order to control money laundering and drug money. Other than that, you can transfer into and out of Lebanon any amount in any currency to and from any country in the world with no questions asked. Another reason Lebanon's banking system is attractive to clients is bank secrecy which was established by law in 1956. In compliance with this law, banks are not allowed to disclose information about the identity of account holders and their bank transactions to any person or any entity, including the government itself. The only exception to this rule is when there is a judgment by a tribunal in a criminal case. In addition to bank secrecy, there is a very low tax rate on interest earned from deposits. So it is easy to see why banking is such an important part of our services sector.

Tourism
Another vital aspect of the Lebanese economy in the services sector is Tourism. Lebanon is known for being a country that attracts tourists. Since the end of the civil war in 1990, the Lebanese government and the private sector have been very active in reconstructing the tourist infrastructure, including the hotels, restaurants, summer resorts etc… In Lebanon, tourism is very well developed and most types of tourism are available:
- Sightseeing tourism:
Lebanon is a beautiful country with high mountains covered with snow most of the year. Our highest peak reaches 3088 meters. We also have deep and gorgeous valleys with rivers that flow from the mountains down to the Mediterranean Sea. Lebanon also enjoys a nice and moderate climate with 4 seasons of the year. Summers are hot and humid on the coast but dry and cool in the mountains. Visitors who come to Lebanon are always taken by the splendor of the landscape.
- Sports Tourism:
In Lebanon, a variety of sports are practiced all year round. Modern ski stations attract ski lovers in winter and the blue sea on the coast draws hundreds of thousands of swimmers in the summer period. All kinds of international sport competitions take place in Lebanon. In February and March, people can ski in the morning and swim in the Mediterranean in the afternoon of the same day.
- Religious Tourism:
In Lebanon, there are many pilgrimage sites for Christians as well as for Muslims. A fact that is not commonly known is that Jesus Christ made many miracles between the two cities of Tyre and Sidon in South Lebanon, the first of them being the transformation of water into wine in the city of Kana. Monasteries and churches attract every year a great number of tourists from many parts of the world.
- Archeological Tourism:
Archeological sites in Lebanon constitute an important attraction for thousands of tourists. Cities like Byblos, considered the oldest city with continuous recorded history in the world, or Baalbeck known as Heliopolis during the time of the Romans, or Tyre and Sidon are destinations for many people who study history and archeology. These historic sites offer a display of traces of past civilizations that have ruled Lebanon in ancient times.
- Business Tourism:
Lebanon's reputation as a business center leads many international businessmen to fill our five stars hotels in pursuit of the many business opportunities in Lebanon.
- Medical Tourism:
Thanks to a network of modern hospitals and an excellent quality of medical care, Lebanon is becoming a centre for treating patients from different countries of the Middle East.

These were in brief the most important features of our economy.
I would like to add that Lebanon is an open and free country and Lebanese businessmen can establish trade and economic relations with their counterparts anywhere in the world.

The role of the government is limited to concluding economic agreements with other countries in order to provide for the Lebanese nationals a framework for their commercial activities. It is in this framework that the Association Agreement between Lebanon and the European Union was signed in June 2002. In accordance with this agreement, products can flow freely between Lebanon and the countries of the European Union. About 45% of Lebanese imports come from EU countries while 27% of our exports go to EU countries. Poland can benefit from this Agreement since it became a member of the EU in May 2004.

Areas of Potential Economic cooperation.
(Tourism, investment and trade)

Although the relations between Lebanon and Poland are excellent on the political, cultural and social levels, there is much work to be done in the economic and commercial areas. Hopefully both Poland and Lebanon can take advantage of the European Union structures to increase exchanges in different areas.

1-Investments:
I will speak about the potential of Lebanese investments in Poland and the Polish investments in Lebanon:

-Lebanese investments in Poland: With their extensive and worldwide experience in tourism, Lebanese investors can find very good opportunities in the region of Łodż as well as in many other parts of Poland, by developing tourist infrastructure like hotels, restaurants and different kinds of attractive resorts. Joint ventures, between Lebanese investors and Polish businessmen should be encouraged in this respect.

As I mentioned before, Banking is also another field where Lebanese bankers are strongly encouraged to look into. The Lebanese banking system is one of the best in the world, and Lebanese bankers have opened either directly or through joint ventures, branches to their successful banks in many countries of the world. With the entry of Poland in the European Union, more opportunities are open for Lebanese bankers to invest in this lucrative field. Some of them are already negotiating with Polish prospective partners.

-Polish investments in Lebanon:
I firmly believe that Polish and especially businessmen and investors from Łodż should take part in the many projects of the rehabilitation of our infrastructure. Although most of the reconstruction projects had been finalized between 1991 and 2000, I should unfortunately say that thanks to the repeated Israeli aggressions and air raids targeting mainly power plants, highways and bridges, namely in the war in the summer of 2006 there are always tenders worth tens of millions of dollars for different kinds of reconstruction projects.

Poland has a large experience in this field with the Arab world and Polish firms are welcome to participate in these lucrative projects. I would like also to mention that through the hundreds of Lebanese companies working in most of the Arab world and especially in the Gulf countries, Polish firms can also reach those rich Arab markets where huge tenders are always announced. This is an opportunity that should not be overlooked.

1) Trade: I will speak first about the bilateral trade between Poland and Lebanon and then the international trade in which Poland can take part through Lebanese connections.

a): Bilateral Trade:
The trade balance between our two countries is very limited and does not reflect at all the good level of our political and cultural relations. I would like to draw your attention here on two important elements, the first being that the Lebanese economy is a market economy where the government has a very limited role; and the second is that Lebanon is a net importer since it imports ten times more than it exports. Our imports include almost everything, from food products, to raw materials, to finished products including cars, tractors and equipment and electric appliances, you name it.
It should also be noted that people do not look at Lebanon as a small market of less that 4 million consumers. In fact, a good proportion of Lebanese imports are destined to be re-exported to Arab and Gulf countries, which makes the Lebanese market equivalent to more that a hundred million consumers. It is up to the Polish producer and exporter to explore this promising market for their numerous products, by organizing trade delegations to Lebanon in order to meet their Lebanese counterparts. The Polish Ministry of Foreign Affairs supports these kinds of delegations and they finance a good proportion of their expenses. Our embassy in Warsaw always helps in preparing a program of visits and meetings with the Lebanese through our local Chamber of Commerce. The level of trade exchange between Lebanon and Poland has increased by 25% in the last three years partly thanks to the involvement of the embassy. We are always ready to provide you with all kinds of information you might need about doing business in Lebanon.

b): International Trade:
The other important aspect in the services sector of our economy is international trade. Since ancient times, Lebanese have been known to be traders.
Lebanon is very well known for its centuries-old traditions and experience in international trade. We call it in Lebanon triangular trade. By that, we mean that a Lebanese businessman, from his office in Lebanon with his telephone, fax machine and now internet connection, buys products from one country, say Argentina for example and sells them to another country, like Japan, without ever seeing the merchandise. This kind of trade can be done thanks to the presence of millions of Lebanese people in different countries of the world. This network of Lebanese connections is used by many foreign companies to reach markets that would be otherwise difficult for them to penetrate. West Africa, Latin and North America including Canada, Western Europe, Australia and especially the Arab countries are areas where Polish firms are strongly encouraged to connect with Lebanese counterparts in order to open new markets for their Polish products.

One practical example of this triangular trade in Poland is the export of Polish crystal and glass products to Cameroon through a Lebanese company established in that West African country. Another example not far from us is a Lebanese company, established in Tallinn, Estonia that sells wood and forest products to Saudi Arabia and other Gulf countries. I think that the Lodż business community should take advantage of these facts. And since it is not possible to give you all the details of the possibilities and the potential of economic exchange between Lebanon and Poland in the scope of a conference of a few minutes, please be assured that our embassy in Warsaw will always be available for any additional information anyone of you might need about Lebanon. I strongly encourage you to call the embassy whenever you think that you need to, and to visit our website at www.lebanon.com.pl which provides interesting links to all the economic sectors of our country.

Finaly, it is with great satisfaction that my Government received the news of the signing of an Agreement of Cooperation between the Regional Chamber of Commerce-Łodż And the Chamber of Commerce, Industry and Agriculture of Tripoli and North Lebanon and for this reason it has designated me to Participate in the ceremony and represent the Chamber of Commerce, Industry and Agriculture of Tripoli and North Lebanon which is the region I come from.

Thank you very much for your attention