Beirut: Premier Rafik Hariri on Friday called on Moscow to open a commercial bank in Beirut to pave the way for better economic ties between the two.
"The best way to start better economic relations is to reopen the Russian bank in Lebanon that existed before the war broke out," Hariri told participants in a forum on Russian Arab banking and financial relations.
Before the collapse of the Soviet Union in 1991, the Russians opened the state-owned Moscow Narodny Bank in Beirut. The bank closed during Israel's 1982 invasion of Lebanon.
"This step (the bank) is modest but applicable," Hariri said.
The forum, which was attended by almost 300 bankers and investors from Russia and Arab states, was aimed at strengthening the economic ties between Moscow the Middle East.
Russian-Arab economic relations are still relatively weak compared to the US and Europe.
But some Arab investors are re thinking their strategy towards Russia which has enormous natural resources such as oil, gas, gold and other minerals.
Hariri said that the Arabs must change their business attitude toward Russia.
"We have to break away from some of our habits. We are accustomed to making business relations with Europe and the US."
The prime minister stressed that there are enormous investment opportunities in Russia, and the Arabs must make bolder moves toward this country.
Hariri said that if language is a barrier, then Lebanon and the Arab states must recruit thousands of their citizens who studied in Russia.
He added Russian products are good and advanced and they are much cheaper than other goods made in other countries.
Some bankers saw other opportunities up in the horizon.
Joe Sarrouh, the adviser to the chairman of Fransabank, said Lebanon can draw some of the deposits of Russian expatriates who now place their money in offshore banks in Cyprus.
"The Russian shopping list includes requests for lines of credit to finance some economic operations," Sarrouh said.
Bankers say that the Russian use the offshore banking units in Cyprus to conduct money transactions.
Sarrouh said the Russian banks managed to overcome the 1998 financial crisis that hit Asia, Argentine and Russia. "But despite the progress, Russian banks are suffering from lack of transparency and especially when it concerns the private capitals."
Some of the participants want Arab banks to play a bigger role in the shaping of the Russian economy which is expected to grow by more than 8 percent in few years.
Russia is a fertile land that is waiting to be exploited by investors, a participant said.
The Russian exports to Lebanon in 2003 reached $400 million while imports to Moscow did not exceed $2 million.
Many Lebanese businessmen have set up companies in Moscow and other Russian cities in the past few years but the size of investments are very modest.
Osama Habib Daily Star staff Saturday, May 22, 2004