VZCZCXRO2920
RR RUEHAG RUEHBC RUEHDE RUEHDF RUEHIK RUEHKUK RUEHLZ RUEHROV RUEHSR
DE RUEHLB #1643/01 3221621
ZNR UUUUU ZZH
R 171621Z NOV 08
FM AMEMBASSY BEIRUT
TO RUEHC/SECSTATE WASHDC 3591
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 001643 
 
SENSITIVE 
 
SIPDIS 
 
STATE FOR NEA/ELA 
STATE PASS USTR FRANCESCKI 
STATE PASS USAID BEVER/LAUDATO/SCOTT 
TREASURY FOR MNUGENT AND SBLEIWEISS 
USDOC FOR 4520/ITA/MAC/ONE 
NSC FOR ABRAMS/RAMCHAND/YERGER/MCDERMOTT 
 
E.O. 12958: N/A 
TAGS: ECON EFIN PREL PGOV LE
SUBJECT: LEBANON:  CABINET REJECTS CONTRACT FOR FRENCH FIRM'S 
MANAGEMENT OF MOBILE OPERATOR (ECONOMIC WEEK IN REVIEW, NOVEMBER 10 
- 16, 2008) 
 
CONTENTS 
-------- 
 
-- RENEWAL OF MOBILE COMPANIES' MANAGEMENT CONTRACT PUTS GOL'S WILL 
TO PRIVATIZE IN 2009 IN DOUBT 
-- CENTRAL BANK GOVERNOR CALLS FOR A SINGLE CURRENCY IN THE ARAB 
REGION 
-- ECONOMY MINISTRY UNPREPARED TO IMPLEMENT IPR TREATIES 
-- PARTNERSHIP FOR LEBANON: BROADBAND SHOULD BE IMPLEMENTED SOON 
-- EFG-HERMES AND BANK AUDI END MERGER NEGOTIATIONS 
-- TELECOM MINISTRY LAUNCHES CALL CENTERS 
-- MENA ICT CONFERENCE ON NOVEMBER 19-23 IN BEIRUT 
-- LEBANON FALLS IN E-GOVERNMENT READINESS INDEX WORLDWIDE... 
-- ... AND IMPROVES IN NATURAL RESOURCES MANAGEMENT INDEX WITHIN 
MENA REGION 
 
CABINET REJECTS CONTRACT FOR FRENCH FIRM'S MANAGEMENT OF MOBILE 
OPERATOR; ORDERS TENDERS FOR MANAGEMENT CONTRACTS 
 
-------------------- 
 
¶1. (U) (U) On November 15, the cabinet rejected Minister of 
Telecommunications (MOT) Gebran Bassil's proposal to contract French 
company Sofrecom (100 percent owned by France Telecom) to manage one 
of the GOL-owned mobile companies until it is privatized later this 
year.  Bassil's proposal came in anticipation of the expiration of 
the current contract at the end of November.  Instead, the cabinet 
tasked the MOT to issue a tender within two months for the 
management of both GOL-owned mobile companies for one year, 
renewable for an additional year.  In the meantime, the cabinet 
asked the MOT to manage the companies until the tender is awarded. 
 
 
CENTRAL BANK GOVERNOR CALLS FOR A 
SINGLE CURRENCY IN THE ARAB REGION 
--------------------- 
 
¶2. (U) At the annual Arab Banks' conference, held this year under 
the theme of "Investments for Stability," Central Bank Governor Riad 
Salameh called for increased cooperation among Arab banks and 
recommended a single currency for Arab countries.  He said that Arab 
banks will face competition in the future, and this should encourage 
greater Arab banking cooperation and the adoption of a single 
currency "so that growth and trade in the region will not remain 
dependent on foreign currencies and of financing from banks that do 
not have a durable interest in the region." 
 
ECONOMY MINISTRY UNPREPARED TO 
IMPLEMENT IPR TREATIES 
-------------------- 
 
¶3. (SBU) During a meeting with the Ministry of Economy and Trade 
(MOET)'s IPR Unit on November 12, head of the unit Salwa Faour told 
EconOff that she was hopeful pending IPR draft legislation would be 
passed by parliament in the coming months.  Faour noted, however, 
that the unit is unprepared to implement the Patent Cooperation 
Treaty (PCT) and Madrid Protocol, both of which await parliamentary 
ratification, due to lack of staff and proper training. 
 
¶4. (SBU) The MOET will be organizing a seminar with WIPO on 
industrial property and trademarks on November 25-26. 
 
PARTNERSHIP FOR LEBANON: BROADBAND 
SHOULD BE IMPLEMENTED SOON 
---------- 
 
¶5. (SBU) On November 10, the Partnership for Lebanon presented its 
two-year progress report and announced ten new initiatives for 2009. 
 These include the creation of community centers linked to the 
internet in a number of towns, creating a national network linking 
schools to the Ministry of Education, and develop the IT sector in 
rural areas.  Speakers also stressed the need to implement broadband 
in Lebanon.  On the sidelines, Telecom Regulatory Authority (TRA) 
Chairman Kamal Shehadi told us TRA will be ready by the end of the 
year to start broadband licensing.  The Partnership for Lebanon is a 
U.S. private sector initiative launched after the 2006 July war by 
the heads of Cisco, Intel, Microsoft, Ghafari, and Occidental 
Petroleum to help assist in reconstruction efforts and create 
 
BEIRUT 00001643  002 OF 002 
 
 
long-term growth. 
 
EFG-HERMES AND BANK AUDI 
END MERGER NEGOTIATIONS 
-------------------- 
 
¶6. (U) Lebanese Bank Audi and regional investment bank EFG-Hermes 
jointly announced the termination of merger negotiations, citing 
current financial market conditions as the main reason.  EFG-Hermes 
holds a 28.6 percent stake in Bank Audi.  The press also quoted a 
2007 report by London-based Emerging Economies Research indicating 
that an investment in Bank Audi would "barely generate any excess 
economic added value" for EFG shareholders. 
 
TELECOM MINISTRY 
LAUNCHES CALL CENTERS 
-------------------- 
 
¶7. (U) At a November 13 press conference, Minister of 
Telecommunications Gebran Bassil announced the launch of call 
centers in Lebanon.  Bassil noted that applications for call centers 
will be processed in 15-30 days at the most, and the centers could 
employ up to 100 people.  Bassil said the economic benefits of the 
call centers, intended to attract investment, create jobs, and boost 
growth, will be felt by the end of the first quarter of 2009. 
 
MENA ICT CONFERENCE ON 
NOVEMBER 19-23 IN BEIRUT 
-------------------- 
 
¶8. (U) The Arab ICT Organization (IJMA3), in cooperation with the 
Ministry of Telecommunications (MOT), the Professional Computer 
Association (PCA), the Information Technology Association of America 
(ITAA), and the World Information Technology and Services Alliance 
(WITSA) will hold its first MENA ICT Week from November 19-23 in 
Beirut.  The event will feature ICT conferences, business matching 
workshops, as well as the Levant's largest ICT trade fair and 
marketplace exhibition, known as Termium. 
 
LEBANON FALLS IN E-GOVERNMENT 
READINESS INDEX WORLDWIDE... 
-------------------- 
 
¶9. (U) According to the 2008 UN Electronic Government Readiness 
Index, Lebanon ranked 74 out of 182 countries worldwide (compared to 
71 in 2005) and eight out of 18 MENA countries (compared to 6 in 
2005) included in the survey.  The index bases its ranking on 
website assessment, telecommunications infrastructure, and human 
capital.  At the same time, the index showed significant progress in 
2003-2008 in utilization of e-government (i.e., services utilized as 
a percentage of services available online), where Lebanon's 
utilization rate rose from 22 percent in 2003 to 44 percent in 2008. 
 
 
... AND IMPROVES IN NATURAL RESOURCES 
MANAGEMENT INDEX WITHIN MENA REGION 
-------------------- 
 
¶10. (U) The 2008 Natural Resources Management Index ranked Lebanon 
57 out of 165 countries worldwide, down from 56 in the 2006 survey; 
and five out of 15 MENA countries, up from seven from the 2006 
survey, in terms of economic policies that promote the sustainable 
management of natural resources.  The index is intended to reflect 
government investment of limited resources in ways that will 
increase economic growth, reduce poverty, and improve natural 
resource management. 
 
SISON