Beirut and Baghdad want to strengthen their industrial agreements
The two Asian countries want to strengthen their economic integration, which is why a strengthening of relations is necessary, especially in the field of international cooperation, which has become the main way out of the economic crises they have been facing in recent years.
"The two sides are considering determining mechanisms to strengthen working relations after they signed a memorandum of industrial cooperation in January was evidence of this desire," said George Bushkian, Lebanese Minister of Industry during a meeting with his Iraqi counterpart, Manhal Aziz al-Khabaz. Lebanese officials are now fully convinced that their nation is one of Iraq's main economic partners and must work to increase the volume of bilateral trade and raise investment rates with Iraq.
"These mechanisms are concerned with establishing the concept of complementary and reciprocal industries, training, sharing experiences and opening up the prospects for business partnerships between entrepreneurs in both countries," Bushkian told a press conference on Monday. "We are determined to succeed and make progress on both sides, and we have the blessing of the political authorities in both Lebanon and Iraq to advance relations without barriers," he added.
On the one hand, Beirut is trying to save its industry after years of marginalisation and indifference by cooperating with various international organisations as part of its efforts to ease the economic crisis. As such, analysts say the rapprochement with Iraq "is an attempt to escape the recent problems that have arisen with Gulf states that no longer favour entry into the Lebanese market given Iran's control over all aspects of political and economic life there through its Hezbollah arm".
Meanwhile, Baghdad seeks to strengthen its presence in the domestic market by removing obstacles to competition and factory obsolescence, as the government seeks to encourage domestic production for export development, with the aim of increasing revenues. Iraqi industry suffered a major deterioration after the Western invasion in 2003 as a result of the war, terrorist operations, etc., in relation to Middle Eastern countries. Since then, the country has promoted the use of renewable energy and green industry, and focus on investing in the food industry to address food security challenges.
"We are moving in the right direction towards implementing the first steps of the memorandum of cooperation we signed in Baghdad about two months ago," Al-Khabaz said. His country is committed to establishing better relations with Lebanon. "The main ones are the good pharmaceutical industries that characterise Lebanon, as well as the food industry," he said after two separate meetings with Parliament Speaker Nabih Berri and Prime Minister Mikati.
These good relations were already reflected in Iraq's support to Lebanon for the export of half a million tonnes of fuel oil for power generation to alleviate the severe energy crisis plaguing the country, agreed in February last year in Baghdad. Energy is a major concern for the Lebanese administration due to the high cost of imports and the disruption of power plants, its impact on the trade deficit and the rising prices of commodities on the domestic market.
Despite this, the country has been plagued by numerous electricity supply failures. "The Lebanese government will have to prioritise the creation of renewable energy capacity to reduce fuel import bills. Equally important, the country will need to revamp its entire energy structure by addressing the subsidy regime and administrative and fiscal problems, particularly at the state-owned Electricite du Liban, and rampant illegal connections," said Jennifer Aguinaldo, MEED's energy and technology editor at GlobalData. In recent months, the energy crisis has escalated in Lebanon as a result of the closure of two major power plants due to fuel shortages.
However, Iraq was plunged into a deep energy crisis last year, resulting in the resignation of the Minister of Electricity, following a drastic reduction in the amount of energy exported by Iran. In addition, Lebanon has been mired in a severe financial crisis since the end of 2019, making the partnership between the two nations a factor of great importance and mutual assistance. Lebanese Prime Minister Najib Mikati is expected to lead a high-level delegation to Baghdad to activate many agreements and support them with new partnerships, always favouring the interests of both.
