VZCZCXRO5202
RR RUEHAG RUEHBC RUEHDE RUEHDF RUEHIK RUEHKUK RUEHLZ RUEHROV RUEHSR
DE RUEHLB #0100/01 0261607
ZNR UUUUU ZZH
R 261607Z JAN 09
FM AMEMBASSY BEIRUT
TO RUEHC/SECSTATE WASHDC 4057
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 000100 
 
SENSITIVE 
 
SIPDIS 
 
STATE FOR NEA/ELA 
STATE PASS USTR FRANCESCKI 
STATE PASS USAID BEVER/LAUDATO/SCOTT 
TREASURY FOR PARODI/BLEIWEISS/AHERN 
USDOC FOR 4520/ITA/MAC/ONE 
NSC FOR YERGER/MCDERMOTT 
 
E.O. 12958: N/A 
TAGS: ECON EFIN PREL PGOV LE
SUBJECT: LEBANON: HOARDING OF GASOIL CAUSES SHORTAGES (ECONOMIC WEEK 
IN REVIEW, JANUARY 19 - 25, 2009) 
 
CONTENTS 
-------- 
 
-- HOARDING OF GASOIL CAUSES SHORTAGES 
-- RECORD NUMBER OF TOURISTS VISIT LEBANON IN 2008 
-- LEBANON "MODERATELY FREE" IN ECONOMIC FREEDOM SURVEY 
-- WORLD BANK: LEBANON'S URBANIZATION RATE AT 86.6 PERCENT IN 2005 
-- EFG HERMES: 4.5 PERCENT GDP GROWTH AND FOUR PERCENT INFLATION IN 
2009 
 
GASOIL SHORTAGE EXPECTED TO 
DROP WITH ARRIVAL OF TANKERS 
-------------------- 
 
¶1. (SBU) Minister of Energy and Water (MEW) Alain Tabourian publicly 
said on January 21 that the gasoil shortage will drop with the 
arrival of three tankers in the next two days.  A senior MEW source 
told us the GOL has been distributing about 12 million liters of 
gasoil daily to the market, while daily market needs are about five 
million liters.  He attributed the shortage to some distributors 
hoarding gasoil to raise the price artificially to reap higher 
profits.  The source explained that the cabinet had agreed to 
subsidize gasoil by $2 per 20 liters from December to February if 
the government-set price of 20 liters of reaches ten dollars or 
more.  However, as a result of the drop in international prices, the 
MEW officially set the price of 20 liters of gasoil at nine dollars, 
and thus the subsidy has not come into effect. 
 
RECORD NUMBER OF TOURISTS 
VISIT LEBANON IN 2008 
---------------- 
 
¶2. (U) According to the Ministry of Tourism, the number of tourists 
visiting Lebanon in 2008 reached a record 1.33 million, or a 31 
percent increase compared to 2007.  The number of tourists in 2008 
also was 4.2 percent higher than in 2004, previously considered the 
best year for tourism in over a decade.  Tourists from the Arab 
world accounted for 41.2 percent of total tourists in 2008, followed 
by Europe (26.1 percent), Asia (13.6 percent), the Americas (13.3 
percent), Oceania (3.2 percent), and Africa (2.6 percent). 
 
LEBANON "MODERATELY FREE" IN 
ECONOMIC FREEDOM SURVEY 
-------------------- 
 
¶3. (U) The 2009 Heritage Foundation/Wall Street Journal Index of 
Economic Freedom ranked Lebanon 95 out of 183 countries worldwide 
compared to 73 out of 162 countries in 2008.  Regionally, Lebanon 
ranked nine out of 17 MENA countries, unchanged from the previous 
survey.  Lebanon remained in the "moderately free" category, with 
its overall score regressing slightly compared to 2008.  Lebanon 
ranked higher than the MENA average in terms of fiscal, trade, 
monetary, and financial freedom.  The index evaluates individual 
economies based on 52 independent variables divided into ten 
factors, including business freedom, trade freedom, fiscal freedom, 
government size, monetary freedom, investment freedom, financial 
freedom, property rights, freedom from corruption, and labor 
freedom. 
 
WORLD BANK: LEBANON'S URBANIZATION 
RATE AT 86.6 PERCENT IN 2005 
-------------------- 
 
¶4. (U) The World Bank's 2009 World Development Report ranked Lebanon 
28 out of 212 countries worldwide and five out 17 MENA countries in 
terms of urban population as a percentage of total population in 
¶2005.  Lebanon's urbanization rate stood at 86.6 percent in 2005, up 
from 86 percent in 2000, and well above the global urbanization rate 
of 56.3 percent.  The report projected Lebanon's urbanization rate 
to reach 87.9 percent in 2015. 
 
EFG HERMES: 4.5 PERCENT GDP GROWTH AND 
FOUR PERCENT INFLATION IN 2009 
-------------------- 
 
¶5. (U) Investment bank EFG Hermes revised its 2008 GDP growth 
estimate for Lebanon to six percent, up from 4.5 percent, inline 
with Central Bank of Lebanon (CBL) Governor's estimate.  EFG Hermes 
lowered its forecast for 2009 from five to four percent.  In nominal 
 
BEIRUT 00000100  002 OF 002 
 
 
terms, GDP was projected at $29.4 billion in 2008 and $31.7 billion 
in 2009.  It noted that high remittances and capital inflows, as 
well as a reversal in deposit dollarization witnessed in 2008, are 
indicators of greater confidence in Lebanon.  EFG Hermes said 
inflation reached ten percent in 2008, and is expected to fall to 
four percent in 2009 due to lower oil prices and the depreciation of 
the euro.  CBL estimated inflation at eight percent in 2008, 
dropping to less than six percent in 2009.  Public debt was expected 
to rise to around $47 billion at end-2008 compared to $42 billion at 
end-2007, the report said. 
 
SISON