As Lebanese struggle amid the country’s seemingly intractable economic crisis, the United Nations Development Program (UNDP) has announced a new initiative to assist embattled business owners by extending their reach overseas.
The Fast Track Export Support Program provides Lebanese companies in productive sectors the opportunity to enter new export markets in the US, bringing in much-needed fresh dollars. In turn, it will support sustainable business and growth.
“This initiative comes at a time when Lebanon is struggling with the consequences of the economic crisis and the COVID-19 pandemic, including the loss in economic activities, revenues, and jobs, as well as a major disruption in global supply chains affecting the competitiveness of small businesses,” UNDP Project Manager Leila Sawaya told Al Arabiya English.
“[This] is part of the UNDP’s ongoing efforts to support sustainable solutions that would unlock local companies’ export potential and provides a one-stop-shop solution to facilitate the entry of Lebanese goods into the US market,” she continued.
The Lebanese lira has lost over 90 percent of its value over the last two years, resulting in a massive economic downturn. Combined with rapidly rising prices, most local consumers have little to spare, putting increasing pressure on smaller businesses in particular.
Many Lebanese people have lost their jobs due to the economic crisis, with more than 80 percent now living below the poverty line. The UNDP hopes its program will help preserve the livelihoods of Lebanese workers and even lead to the creation of new jobs as these businesses expand.
“Providing Lebanese companies with the added boost needed to enter foreign markets is instrumental at this point,” Sawaya said. “Local purchasing power is shrinking, and companies are struggling to remain afloat.”
Participants will receive three months of coaching from US-based consultants, helping them create and implement an effective market entry strategy. The UNDP will then provide in-kind assistance to help cover logistical costs, including shipping and warehousing in the US and clearance and customs procedures.
At the same time, marketing support working on branding, primarily focusing on packaging and labeling uplifts, and business development services provided by a US-based broker will help companies connect with potential buyers and distributors.
While most of the companies in the program sell processed food products, such as olive oil, non-alcoholic beverages, organic food preparations, or dried herbs like zaatar, others sell high-end, high-quality cosmetics products like artisanal soaps.
“We have diversity in the type of companies in our program and the type of products they sell,” Sawaya explained. “Some are selling products that fit the mainstream US market, and some are for the ethnic Middle Eastern market in the US. Both markets are growing and have strong growth potential.”
“We have already tested the appetite for these products, and we have received very positive feedback,” she added. “It is a large and challenging market, but very rewarding if companies are provided with the support needed.”
Competition inside Lebanon’s domestic markets makes it difficult for companies to grow and expand their market share. At the same time, the troubled country’s lack of modern manufacturing infrastructure and dependency on imports – paid for in foreign currency – prevents companies from producing enough to meet the demand from export markets.
It is then further compounded by global increases in logistical costs due to the COVID-19 pandemic and informal capital controls imposed by Lebanese commercial banks and the halting of financial services. For many, the initiatives like the UNDP’s are their only hope.
“[This] program will allow us to have access to US dollars, which is the currency we use to buy everything we need in Lebanon, including the raw material, the machinery, and the rent of our premises,” said Georgy Rahayel, Founder of Le Joyau d’Olive. “Sadly, even rent is now paid in US dollars.”
“We’re a small company,” he explained. “With Fast Track, we’re able to access distributors in the US [and] the program will bear the cost of shipping and warehousing in the US, which is something we would not have been able to do on our own.”
Even larger-scale operations face obstacles when stepping up to the international level. Even with sufficient resources and staff, not being able to successfully navigate international trade regulations or comply with the standards of the markets they are seeking to enter into makes the process confusing and frustrating.
“[We are] one of the biggest non-conventional wheat mills in the Bekaa region,” said Isabelle Bou Khalife Saliba, Co-Owner and Marketing Manager of Rim Mills. “[We are] equipped with a modern factory capable of meeting the local and international demands [and we] have built a cluster of farmers in the region, focusing on producing burghul and recently moghrabieh, also known as the ‘Lebanese pearl.’”
“For companies that are at an earlier stage of their export process,” she explained, “it’s hard to understand the US market requirements and consumer trends, [or find] advice on how to improve their marketing strategy and connect with potential buyers, distributors or importers.”
“[This program] is offering [my company] the [opportunity] to penetrate the US market in a quick yet smooth way,” said Rose Bechara Perini, Founder of Darmmess. “I produce, market, and distribute a high-end, high antioxidant extra virgin olive oil. [With access to] scientific data, knowledgeable business consultations [and] support, I would expect the brand [to be] leading the category of high-end Lebanese olive oils on that market in a few years.”
Despite the perceived quality of Lebanese goods, it remains to be seen if enhancing foreign exports can turn the tide of the country’s economic woes. Without large-scale support from the Lebanese government, initiatives like the UNDP’s ‘Fast Track’ are only a temporary stopgap, but one that may point the way to a better – and more stable – economic future.