VZCZCXRO0898
RR RUEHAG RUEHBC RUEHDE RUEHDF RUEHIK RUEHKUK RUEHLZ RUEHROV
DE RUEHLB #0921/01 1751129
ZNR UUUUU ZZH
R 231129Z JUN 08
FM AMEMBASSY BEIRUT
TO RUEHC/SECSTATE WASHDC 2312
INFO RUEHEE/ARAB LEAGUE COLLECTIVE
RUCNMEM/EU MEMBER STATES COLLECTIVE
RHEHAAA/NSC WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC

UNCLAS SECTION 01 OF 02 BEIRUT 000921 
 
SIPDIS 
 
STATE FOR NEA/ELA 
STATE PASS USTR 
TREASURY FOR MNUGENT AND SBLEIWEISS 
USDOC FOR 4520/ITA/MAC/ONE 
NSC FOR ABRAMS/SINGH/YERGER/DEMOPOLOUS 
 
E.O. 12958: N/A 
TAGS: ECON EFIN PREL PGOV LE
SUBJECT: LEBANON: CENTRAL BANK FOREIGN CURRENCY ASSETS REACH RECORD 
HIGH (ECONOMIC WEEK IN REVIEW, JUNE 16 - 22, 2008) 
 
CONTENTS 
-------- 
 
-- CENTRAL BANK FOREIGN CURRENCY ASSETS REACH RECORD HIGH 
-- HIZBALLAH WELL UNDERWAY IN POST-JULY 2006 WAR RECONSTRUCTION 
PROCESS 
-- NEW START-UP FUND ESTABLISHED FOR HIGH-TECH GROWTH FIRMS 
-- BEIRUT IMPROVES IN 2008 QUALITY OF LIVING SURVEY 
-- GOL WANTS TO PRIVATIZE THE BEIRUT STOCK EXCHANGE 
-- WORLD BANK FORECASTS 3.5 PERCENT GROWTH IN 2008 
 
CENTRAL BANK FOREIGN CURRENCY 
ASSETS REACH RECORD HIGH 
-------------------- 
 
¶1. (U) The Central Bank of Lebanon (CBL) mid-June balance sheet 
showed that CBL foreign currency assets rose by about $188.15 
million from end May, reaching a record high $14.66 billion.  This 
is mostly attributed to increased commercial banks' deposits with 
the CBL, as well as CBL intervention in the foreign exchange market 
as a buyer of excess dollars. 
 
HIZBALLAH WELL UNDERWAY IN POST-JULY 2006 
WAR RECONSTRUCTION PROCESS 
-------------------- 
 
¶2. (U) Hizballah reconstruction and development association Jihad Al 
Bina has so far rehabilitated 945 buildings out of 980 buildings 
that were damaged in Beirut's southern suburbs during the July 2006 
war with Israel, Arab nationalist As-Safir reported on the occasion 
of Jihad Al Bina's 20th anniversary.  Jihad Al Bina also paid 
housing compensation to over 17,500 families whose apartments were 
completely demolished, as well as compensation for the 
rehabilitation of approximately 120,000 housing units, while it 
repaired the common parts (entrance, stairs, and roofs) in damaged 
buildings, the article said. 
 
NEW START-UP FUND ESTABLISHED 
FOR HIGH-TECH GROWTH FIRMS 
-------------------- 
 
¶3. (U) On May 30, the first technology incubator in Lebanon Berytech 
launched Berytech Fund, a start-up fund targeting the Lebanese 
information and communication technology (ICT) sector.  With over $6 
million under management, the fund aims at injecting $100,000 to 
$1.2 million in selected high-tech growth firms.  So far, Lebanese 
banks, corporations, universities and local NGOs have invested in 
the fund. 
 
BEIRUT IMPROVES IN 2008 
QUALITY OF LIVING SURVEY 
--------------------- 
 
¶4. (U) According to Mercer Human Resource Consulting's annual 
quality of life survey, Beirut ranked 171 out of 215 most desirable 
cities for overall living standards, and 15 out of 21 MENA cities. 
This represented a slight improvement from the 2007 survey, where 
Beirut ranked 179 worldwide and 18 in the MENA region.  The survey 
evaluates cities on the basis of 39 quality-of-living factors 
grouped in ten categories including political, economic, and 
socio-cultural factors, environment, housing, recreation, health 
care, education, transportation, and other public services. 
 
GOL WANTS TO PRIVATIZE THE 
BEIRUT STOCK EXCHANGE 
-------------------- 
 
¶5. (U) Finance Minister Jihad Azour stressed that the GOL is 
determined to provide a greater protection to investments and 
insisted on the need to reactivate privatization.  He also mentioned 
that the "GOL is serious about privatizing the Beirut Stock 
Exchange."  Azour indicated that parliament's endorsement of 
legislation submitted by the Siniora Cabinet between July 2005 and 
June 2006 will impact positively economic conditions in Lebanon. 
Among these proposed laws, Azour mentioned legislation on offshore 
companies, insurance companies, commercial law, fiscal system, and 
the modernization of capital markets.   Azour was speaking to 
Kuwaiti daily Awan. 
 
WORLD BANK FORECASTS 3.5 
PERCENT GROWTH IN 2008 
-------------------- 
 
BEIRUT 00000921  002 OF 002 
 
 
 
¶6. (U) The World Bank's recently published Global Development 
Finance Report for 2008 projected a 3.5 percent growth in 2008 as a 
result of the political consensus reached in Doha in May 2008. The 
report forecast growth on an upward trend in the long run as 
domestic conditions continue to improve, reaching 4.5 percent in 
2009 and 5 percent in 2010.  The report also indicated that foreign 
direct investments (FDI) flows reached $1.8 billion and remittances 
$5.5 billion in 2007.  As a result, the current account deficit is 
estimated at 5.2 percent of GDP in 2007, and is anticipated to widen 
in 2008 reaching 11.4 percent of GDP, and falling slightly to 10.5 
percent in 2009 and 9 percent in 2010. 
 
SISON