VZCZCXRO9167
PP RUEHAG RUEHBC RUEHDE RUEHDF RUEHIK RUEHKUK RUEHLZ RUEHROV
DE RUEHLB #1395 2670833
ZNR UUUUU ZZH
P 230833Z SEP 08
FM AMEMBASSY BEIRUT
TO RUEHC/SECSTATE WASHDC PRIORITY 3139
INFO RUEHEE/ARAB LEAGUE COLLECTIVE
RUCNMEM/EU MEMBER STATES COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RHEHAAA/NSC WASHDC

UNCLAS BEIRUT 001395 
 
SIPDIS 
SENSITIVE 
 
DEPT FOR NEA/FO, NEA/ELA 
ALSO FOR EEB/ODF DEMARCELLUS 
NSC FOR ABRAMS/RAMCHAND/YERGER/MCDERMOTT 
COMMERCE FOR ITA SAMS AND WIEGLER 
 
E.O. 12958: N/A 
TAGS: PGOV ECON EIND LE
SUBJECT: LEBANON:  TASTE THE RECONCILIATION:  BUSINESSES 
ENTHUSIASTIC ABOUT POLITICAL RECONCILIATION 
 
SUMMARY 
---------- 
 
¶1. (SBU)  It has been an outstanding summer for Lebanon's 
tourism industry and service sector generally.  Hotels have 
been full, restaurants packed, and it is impossible to find a 
rental car on short notice.  Businesspeople are saying  that 
political reconciliation initiatives among Lebanon's feuding 
political and confessional groups could bring the stability 
necessary to keep the visitors coming and the money rolling 
in.  End summary. 
 
BUSINESS IS BOOMING 
---------- 
 
¶2. (U)  For the first time since the Israel-Hizballah war in 
2006, tourism in Lebanon has taken off, with a combination of 
Gulf Arabs and Lebanese expatriates pouring in for their 
summer vacations.  Lebanon's Ministry of Tourism reports a 
29.2 percent increase in tourists in the first eight months 
of 2008 over the same period in 2007, with the number of 
visitors in August alone jumping almost 34 percent compared 
to 2007.  According to the firm Global Refund, Value Added 
Tax (VAT) refunds to tourists are up 57 percent 
January-August 2008 over the same period last year. 
 
¶3. (U)  Embassy commercial contacts are thrilled at how well 
the summer season went.  Nadim Assi, president of the Beirut 
Traders Association, called the August tourist numbers 
"unprecedented."  He added that after the president was 
elected in May, the business mood improved markedly, and 
summer commercial activity helped traders catch up after a 
rough beginning to 2008.  Robert Fadel, the owner of Beirut's 
ABC mall, the largest in Lebanon, said sales at the shopping 
center increased 50 percent this summer over last.  President 
of the Hotel Syndicate Pierre Ashkar reported a fantastic 
summer for his industry, with Lebanese expatriates and Gulf 
Arabs filling rooms, and the chairman of Beirut Port said 
port activities increased 25 percent this summer year on 
year. 
 
CAN THE POLITICIANS KEEP IT GOING? 
---------- 
 
¶4. (SBU)  With business prospering, recent "reconciliation" 
meetings among Sunnis and Alawites in Tripoli as well as 
between Walid Jumblatt's Progressive Socialist Party (PSP) 
and Hizballah, have been welcomed by the business community 
in Lebanon as harbingers of continued political stability. 
Rumors of a possible meeting between majority leader Saad 
Hariri and Hizballah SYG Hassan Nasrallah have businesspeople 
talking about the summer boom continuing. 
 
COMMENT 
---------- 
 
¶5. (SBU)  After the May Doha negotiations that ended the 
months-long political impasse, the Beirut Haagen-Daaz outlet 
launched a campaign under the banner "Taste the 
Reconciliation" and introduced a new product, the "Doha 
Agreement Cone."  The Doha Accord and subsequent presidential 
election lowered political tensions, having an almost 
immediate impact on the economy.  The bounce in summer 
visitors shows the resilience of the Lebanese tourism sector 
and the economy in general.  Lebanese expatriates in 
particular seem to view any period of relative calm as an 
opportunity to visit, before the next cycle of violence 
begins.  Ghazi Kraytem, President of the Beirut and Mount 
Lebanon Chamber of Commerce, said that Lebanese business can 
handle "small incidents" like assassinations as long as 
political groups do not let violence get out of hand. 
Because of this, all of our contacts say business leaders are 
excited about their prospects if the string of 
"reconciliations" continue.  The pickup in business does not 
translate into political stability.  A American Chamber of 
Commerce President Salim Zenni notes, the mood may improve 
for now, but in the end, "people don't trust politicians 
anymore."  End comment. 
GRANT