BEIRUT: The banking industry could be a vehicle for creating more robust political and economic ties in the region, participants at the Union of Arab Banks conference told The Daily Star Thursday.
The comments came after Prime Minister Saad Hariri and his Turkish counterpart Recep Tayyip Erdogan delivered speeches that kicked off the two-day conference on Arab banks and international economic arenas.
“Banks are strong domestically, and now they need to expand and to grow beyond their domestic markets. It’s a great challenge,” said resident representative of the International Monetary Fund, Eric Mottu.
He added that he believed Erdogan’s expressed wish to create a regional Schengen was “a great endeavor” but one that “requires a strong political will.”
Central banks in Jordan, Syria, Turkey and Lebanon have spearheaded efforts to ease inter-banking restrictions between the four countries. Last month, Lebanon’s Central Bank hosted a conference entitled “Toward a MENA Banking Schengen: Turkey, Syria and Lebanon.”
“Erdogan and Hariri’s speeches confirm that the role of Arab banks is important to the completion of financial, economic and political projects between Arab nations,” said chief executive officer of the multinational Al-Baraka Islamic Bank, Mohammad Isa al-Mutaweh.
Mutaweh said the conference should be seen as a byproduct of a bankers’ conference that took place in Istanbul this summer and that the official statements were a testament to “the expansion of a financial and economic framework into political activity.”
Asked about the current state of markets in the Gulf Cooperation Council, Mutaweh said he saw important signs of financial healing.
He added that freezes on projects due to the international credit crisis were beginning to thaw in his native Bahrain and that investor confidence could soon roll through GCC markets.
Several Lebanese bankers viewed Hariri and Erdogan’s promises of closer economic and financial ties as opportune, bolstering trade that they see as already very lucrative.
They believe Lebanon’s banking sector, which many speakers at the conference praised for a fortitude that warded off the international credit crisis, should lead that effort.
“Turkish products are all over store shelves in Lebanon, so trade relations are already on the rise,” said Union of Arab Banks consultant Mohammad Fheili.
One Islamic Bank in Lebanon, the Arab Finance House, views its work with Turkey, which boasts a nearly 68 million strong Muslim population, as “one of its most important experiences.”
“We’ve given financing to one of the largest companies in Turkey, and hope that cooperation [between Lebanon and Turkey] gets enacted so we can continue the course of greater involvement in Turkey,” said head of Credit Department at Arab Finance House Ghinwa Jomaa.
Rabih Kays, a professor at the University of Sagesse who specializes in finance and banking law, believes the groundwork has already been laid out for free trade between Lebanon and Turkey via the lifting of visa restriction early this year, but he said the removal or bureaucratic red tape and a lowering of tariffs was still in order.
Source : http://www.dailystar.com.lb/article.asp?edition_id=1&categ_id=3&article_id=121868#axzz16MuGSE83 - Nov 26, 2010
