BEIRUT, Dec 3: Lebanese prime minister Rafik Hariri announced recently that Lebanon and Saudi Arabia plan to set up a joint duty-free zone to strengthen economic ties between the two countries.

The announcement came at the opening of the first Saudi- Lebanese businessmen’s conference. Hariri declined to give details on the zone or its implementation.

More than 500 Lebanese and Saudi businessmen took part in the two-day event.

Hariri urged Lebanese and foreign businessmen to invest in Lebanon following the Sept 11 terrorist attacks in the US. He also called upon the Saudi businessmen to explore the investment opportunities here.

“I can assure you that investment in the country is safe and sound provided that the investor picks the right person to deal with and select a profitable line of business,” Hariri told the participants.

Offering examples of investment prospects in Lebanon, Hariri mentioned that the country had an advanced banking system analogous to those of the United States and Europe.

“Lebanon has overcome many problems ... and has proven itself safe for investment”.

He added that the government approved many laws this year that facilitate investment and give new incentives to investors. “The government will not increase taxes on profits and this will give the opportunity to attain large incomes,” Hariri pledged.

He said that Arab investors have the right to buy any piece of land in the country, irrespective of size.

Taking advantage of the hostile attitude of Americans towards the Arabs, the Lebanese government has appealed to their rich neighbours to invest their money in different sectors. Arab investments and assets in the US and Europe are estimated at more than $900 billion.

Some Arab investors have inquired about the interest rates offered by Lebanese banks on dollar deposits. The average yield on dollar deposits in the local banks ranged between 4 and 5 per cent compared to less than 3 per cent in the US and Europe.

Sheikh Abdel Rahman bin Ali al-Jureisy, chairman of Chamber of Commerce, Riyadh, complained that slow bureaucratic procedures have discouraged some Gulf investors from doing business in Lebanon, adding if the government expedite the processing of investment applications, Gulf businessmen will be doing business in the country.

Jureisy agrees that Lebanese and Saudi Arabia need to liberalize their economy, encourage investment and pursue privatization.