ExecutiveMagazine - 3/13/2019 2:18:06 PM - GMT (+2 )
Lebanon is well-acquainted with the true diaspora returnee: the individual born in Lebanon who departed at some point in the 20th century, who has one or multiple tertiary education degrees—often earned at a ranking European or American university—and who succeeded in his career abroad before returning to Lebanon, for reasons ranging from family responsibilities or/and love to entrepreneurial hunger and will to invest. Some spirited entrepreneurs even get involved in diaspora organizations.
However, while this personality is frequently encountered in the entrepreneurial private sector economy of Lebanon, it has not been so common—at least for several political generations in positions of power, until the arrival of the 2019 Council of Ministers—to meet a minister that fits the profile. Executive sat down with Adel Afiouni, minister of state for information technology and investment, to understand his vision for this new role. Having been able to check the above-mentioned achievement boxes on Minister Afiouni’s professional track record in education and international banking, Executive is now standing by to tick off the delivery boxes on the new ministry’s KPI fulfillments or flops in the coming years.
E What is your perspective on knowledge economy development in Lebanon, including the state of the digital ecosystem and the readiness of our cybersecurity?
I have not yet gone into the details of the cybersecurity topic. I just started and am first mapping the space. I am pretty familiar with the ecosystem, with the entrepreneurs, the VCs, and the government entities on the knowledge economy side, but in my first few weeks on the job I want to do a full mapping [of the digital landscape] and listen to all the key stakeholders from the government and the private sector, so that I can figure out what mandate I want to design for this ministry, what is the scope of work, and what is the vision that we want to achieve. From there, I want to determine the strategy and the deliverables. My ministry is actually a startup, which goes well with the way in which I like to operate. I am very excited about this and want to operate it in the way you found a business.
E Are you, in the sense of a startup enterprise, bootstrapping?
In my opinion, the ministry has a very strategic role, and I myself have high expectations as to what we want to achieve. I also am dealing with stakeholders who have high expectations, as this sector is, by definition, a fast-growing sector with entrepreneurial participants. I want to build a long-term strategy with clear deliverables.
E Of course, one does not expect a ministry to bootstrap, but there have been instances where entire ministries had no clear budgets and were forced to resort to tapping into external funding sources. Do you have a budget?
There are challenges. [The ministry] is a startup, and funding is obviously a key component when you build a startup. We have a commitment from the Prime Minister to grow this ministry and deliver on our ambitions. I need to submit a plan with a budget. If you look at the policy statement [by the Council of Ministers] that was presented to Parliament [in February], there is a portion that says that ministers of state will be given resources, including budget[s]. We have to ask for [such allocations] as we operate in an environment where we can obviously not overspend. We have to be very rigorous [on spending control], and I do not have any issue with leveraging existing resources and cooperating with a lot of stakeholders inside the government. There are some ministries where there is complementarity and scope and the need to cooperate, like the Ministry of State for Administrative Reform (OMSAR) and [the Ministry of Telecommunications]. All ministries effectively are partners, we are all partners in the project of digital transformation. There are also large components of the private sector who want to be involved and help. We need to leverage those resources.
E As you mentioned, more than one ministry has been a stakeholder in building IT capacities in public administrations and Lebanon’s transition into the knowledge economy. OMSAR was a stakeholder together with UNDP in developing an e-government strategy document as far back as 2003, and then in producing another, similar strategy document that was published late last year. Did you already have time to look at the priorities as they were presented in those papers and determine which of them you will pursue as minister?
Yes, you are right that we had a number of strategy papers and strategic initiatives that we need to execute; the key is execution. I looked at a lot of documents, not only from OMSAR, but every ministry had developed [such documents and plans]. Some administration units have made substantial progress, but others are a bit late in the game [in terms of digitization]. We have not implemented the full strategy so far, so we can leapfrog. There are new technologies and new ways of digitizing the government and the economy. That is the first priority item.
Secondly, this government has a strong commitment to the knowledge economy as a pillar of our strategic vision for the economy. Therefore, and this is also in the policy statement, there is a strong commitment to the digital transformation of the administration and the economy. We are going to start discussions, such as [convening] inter-ministerial committee meetings. The key for such initiatives, in my experience from other countries, is to first put the governance in place. The strategy is key, but the governance is fundamental for executing it. We need to establish the governance structure and decide on the role of each ministry within the governance structure and how we will work on a shared infrastructure platform to be most efficient. Beyond this, each ministry or administration obviously will have its own [digitization] priorities and implementation inside the governance structure that can oversee the execution and [fulfillment of] KPIs.
Now, going back to my own priorities in entering into this position, I see the scope as twofold. One scope is the digital transformation of the government. That scheme has, for many reasons—transparency, efficiency, and the journey of the citizen—to be made much easier. This is important for the economy, but also for regaining the citizen’s trust in the government. That is one side of the scope. Equally important is the second side: the emergence of Lebanon, from an economic and business perspective, as a hub for technology and the knowledge economy. This is a sector where we have many advantages and have the potential, contrary to other sectors, to grow and become a meaningful player in the region.
For me, therefore, there is the digital transformation of government, where I have to work closely with every partner in government who is involved—[which is] pretty much everyone. OMSAR has done a great job in setting the stage, but we need to progress from there. And there is the private sector, business side to the knowledge economy, which we need to grow and transform from an emerging sector with a lot of potential into a well-established center for the region.
E What is your position on interaction with the academic and civil society sides?
I have many ideas on that side but, to be fair, I need to develop these further. This weekend I spoke with the minister of education to jointly organize meetings with all the large universities and come up with a strategy where the universities can be actively involved in our vision and plans. When I talk about the private sector and how we can transform Lebanon into a business hub in the knowledge economy, enablers are key. Two enablers are first on my list. One is infrastructure, and that is where our neighbors at the ministry of telecoms are set on improving the infrastructure in the whole country. The second enabler is education, research, and development. We need to create [intellectual property] in the country; we do not just want to be an intermediary. To do that, we need strong research and development. We need to adapt the curriculum in the universities to the business world and to the new technologies. It is a part of the strategy and very important for us to include new technologies in the curriculum, starting with schools. I have friends in Parliament in this, and, for example, MP Nicolas Sehnaoui is going to propose a new law on introducing technology subjects in schools. We also need to do the same at the university level, where we need to introduce new technologies and link the universities better to the business ecosystem. All this is starting, but I think we need to turn it into a focused plan.
E If we turn to talk about the business community and specifically the financial sector, what is your perspective on the role of banks, and especially the function of Circular 331, for the development of the knowledge economy in Lebanon?
I think Circular 331 has been a major catalyst that has effectively jump-started the whole ecosystem [of the knowledge economy]. As we all know, you can have many plans, but if you have no funding for a plan, you can’t progress. I salute [Banque Du Liban Governor Riad Salameh] for his vision on this. [Circular] 331 has been a fantastic initiative, and what it did was basically make capital available to the startup ecosystem. Our role in government is not only to support it, but to complement it. [Circular] 331 has brought the banks as major investors into the ecosystem, but there are other types of investors that we also need to bring in [to] diversify the funding sources for the ecosystem. The most important thing is for our country to attract capital, not just in the form of deposits, but in any form of investments. Thus, we need to supply those other investors with sets of incentives and support. We have a pool of capital available, which mostly is diaspora capital, that we need to attract and encourage. So far, we have focused on this pool mostly as a source of deposits. That is fine, but we have to also attract them for investments in productive sectors. One of my priorities as minister for information technology and investment is to see how we can attract more diaspora capital to productive sectors in Lebanon, and in particular to the knowledge economy sector by providing support, help, and incentives.
E Does the minister of state for information technology and investment then also have a vital stake in collaboration with the central bank and the Capital Markets Authority of Lebanon?
We have a great relationship with the governor and the CMA, and we complement each other. We have to work hand-in-hand supporting crucial flows of capital into the country.
E Does your sightline also extend to a perspective on financial sector companies and banks on issues such as new payment solutions in the country?
Anything that makes the ecosystem more efficient, where we can see potential for growth and that helps us with digitization and the digital transformation of the economy has enablers that are important, and one of them is moving into a cashless society, where payments can actually be made in a more efficient and transparent way. This is part of my priorities.
E In order to create a virtuous cycle or upward development spiral for Lebanon’s digital transition, it seems that this country needs to achieve much: investments, reforms, cybersecurity, digital identity, and e-governance. As the country would work on all these issues, do you see them as priority needs that are best pursued consecutively or concurrently? Phrased differently, must we achieve a succession of milestones or will it be better to work on all fronts at the same time?
As I see this, the tracks are parallel, and we should avoid taking on [digital transformation] one step after another. If we have a governance structure and agree on a common platform or shared principles, everything should go in parallel. [In this way,] we will actually create a virtuous cycle. For example, we will not wait for everything [else] to be ready before going to attract investment. This is because having attracted a small investment sometimes puts pressure on other things to progress faster.
E On the cybersecurity side, there seem to be several options in the sense of having centralization in the management of citizens’ data and single-source issuances of digital identity files or having more of a decentralized approach. Do you favor one approach?
I have my views on that as I’ve done some work on [such issues] in my previous work. However, to be fair, these are sensitive matters that touch on national security. They involve the Ministry of Defense, the interior ministry and many organizations. Thus I would rather first discuss these matters and hear views from different parties before we can come up with a solution. As far as I’m concerned, it’s very important to take into account some of the opinions from inside the government, especially from [the] security [establishment].
As I mentioned earlier these [cybersecurity issues] are matters where we’ve been a bit too late. At this stage, where we already have digitized a lot of data, we need to put the mechanism in place to protect our country and our citizens. It is also very important to protect the privacy of citizens’ data.
E Are we going to see another national plan on cybersecurity and other digital and e-government issues, something such as a national digital strategy, the next edition?
I hope we don’t need to recreate this because there’s a lot of good work that has been done. One of the reasons I see for delays [in implementing a national digital strategy] is that we’ve seen a lot of strategy papers come in. They keep reinventing the wheel. I prefer if we actually leverage the work that has been done and really [do this] in the near term. We will agree on a deadline [for the government’s digital transition] so we [can] start implementing [the strategy]. We can get inspiration from a lot of countries that were in similar situations. We need to execute [our strategy].
E One of the experiences that have marked periods of technical migration and innovation seems to have been that in taking these steps, countries have tended to make mistakes. Perhaps it has even been necessary for administrations to make mistakes on the road to e-governance and learn from them. But as for Lebanon, it seems today that we are out of time and cannot afford to make mistakes and learn from them. How would you solve this challenge?
Hopefully we can progress faster by learning from other countries’ mistakes and journeys into digital transformation. We honestly just need to have a clear governance—something that we don’t have today—and then this governance will lead to the assignment of [the needed] roles. Some of these roles will be handled at the ministry’s level, but to make things more efficient, shared infrastructure, with the ability to communicate between government entities and use similar tools, is very important, and we do not have this yet.