VZCZCXRO0509
RR RUEHAG RUEHBC RUEHDE RUEHDF RUEHIK RUEHKUK RUEHLZ RUEHROV RUEHSR
DE RUEHLB #0303/01 0751153
ZNR UUUUU ZZH
R 161153Z MAR 09
FM AMEMBASSY BEIRUT
TO RUEHC/SECSTATE WASHDC 4455
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 000303 
 
SENSITIVE 
 
SIPDIS 
 
STATE FOR NEA/ELA 
STATE PASS USTR FRANCESCKI 
STATE PASS USAID BEVER/LAUDATO/SCOTT 
TREASURY FOR PARODI/BLEIWEISS/CORREA 
USDOC FOR 4520/ITA/MAC/ONE 
NSC FOR MCDERMOTT 
 
E.O. 12958: N/A 
TAGS: ECON EFIN PREL PGOV LE
SUBJECT: LEBANON: FRANCE TO PRESSURE LEBANON ON TELECOM 
PRIVATIZATION BENCHMARK (ECONOMIC WEEK IN REVIEW, MARCH 9 - 15, 
2009) 
 
CONTENTS 
-------- 
 
-- FRANCE TO PRESSURE LEBANON ON PRIVATIZATION BENCHMARK 
-- NEWLY ESTABLISHED PHARMACEUTICAL RESEARCH ASSOCIATION TO RAISE 
IPR AWARENESS 
-- MINISTER OF ECONOMY VISITS IRAQ TO STRENGTHEN TRADE RELATIONS 
-- BEIRUT STOCK EXCHANGE PLANS TO UPGRADE ITS SYSTEM, TRADING 
CONTINUES TO BE WEAK 
 
 
FRANCE TO PRESSURE LEBANON ON 
PRIVATIZATION BENCHMARK 
-------------------- 
 
¶1. (SBU) Frederic Kaplan, French Embassy economic officer, and Chris 
de Clercq, UNDP Program Manager at the Finance Ministry, told us 
separately that a French team will be in Beirut in May to review and 
assess Paris III reforms and apply pressure on the GOL to move 
forward on mobile telecom privatization.  The 150 million euros the 
French are set to disburse upon completion of this benchmark is the 
second tranche of a 375 million euro French budgetary support pledge 
from at the Paris III donor conference. 
 
NEWLY ESTABLISHED PHARMACEUTICAL RESEARCH 
ASSOCIATION TO RAISE IPR AWARENESS 
-------------------- 
 
¶2. (SBU) On February 28, the Lebanese Pharmaceutical Research 
Association was officially established, after its application for 
incorporation was submitted to the Ministry of Interior in September 
¶2007.  Although the association is not a chapter of the 
Pharmaceutical Research and Manufacturers of America (PhRMA), its 
members will include all PhRMA members operating in Lebanon, and 
will reach out to other non-American research- based pharmaceutical 
companies in Lebanon. 
 
¶3. (SBU) A source at Janssen-Cilag -- one of the association's 
founding members -- told us that the Ministry of Public Health 
(MOPH) was behind the delay in its official incorporation, since the 
MOPH's director general believed the association would promote 
commercial interests, rather than acting as a not-for-profit 
organization.  One of the association's primary objectives will be 
to raise intellectual property rights (IPR) awareness. 
 
MINISTER OF ECONOMY VISITS IRAQ TO 
STRENGTHEN TRADE RELATIONS 
-------------------- 
 
¶4. (SBU) On March 8, Minister of Economy and Trade Mohammad Safadi 
visited Iraq with a delegation from the Lebanese private sector in 
response to an invitation by his Iraqi counterpart Abd Al-Falah 
Al-Sudani.  Head of the international trade department at the 
Ministry of Economy and Trade (MOET) Rafif Berro told us discussions 
focused on strengthening bilateral economic ties and increasing the 
presence of Lebanese banks in Iraq.  Both ministers agreed to revive 
the Joint Lebanese-Iraqi Ministerial Committee and the 
Lebanese-Iraqi Businessmen Council. 
 
¶5. (SBU) Safadi called on Iraq to use Lebanese ports, especially the 
northern Tripoli Port, for transit trade to and from Iraq, as well 
as for the resumption of pumping Iraqi crude to the Tripoli 
refinery.  Al-Sudani expressed interest in exchangeof information 
on MOET's expertise in consumer potection, quality control, 
insurance, and WTO accession.  Al-Sudani plans to visit Beirut in 
April. 
 
BEIRUT STOCK EXCHANGE PLANS TO UPGRADE ITS SYSTEM, 
TRADING CONTINUES TO BE WEAK 
-------------------- 
 
¶6. (SBU) On March 12, Dr. Fadi Khalaf, president of the Beirut Stock 
Exchange (BSE), told us he was pleased with meetings he had with the 
NYSE-Euronext president and senior managers in New York on March 2. 
Khalaf said he discussed the upgrading of the BSE system, for which 
the BSE has already approached the EU for funding. 
 
¶7. (SBU) Khalaf, who was elected SYG of the Union of Arab Stock 
 
BEIRUT 00000303  002 OF 002 
 
 
Markets (UASM) in January 2009, also discussed increased cooperation 
between the NYSE and the UASM, setting up of a specialized system 
for trading Islamic products, and participation of NYSE experts in 
the UASM conference on post-global crisis opportunities on April 15 
in Morocco.  Since he cannot be both BSE President and USAM SYG at 
the same time, Khalaf said the GOL has asked him to remain at the 
BSE until after the June parliamentary elections. 
 
¶8. (SBU) On a separate issue, Khalaf said BSE trading will not be 
affected by the official opening of the Damascus Securities Exchange 
(DSE) on March 10, because of restrictions on trading activity by 
the latter.  Out of six listed companies in the DSE, three are 
Syrian-Lebanese owned banks (Bank of Syria and Overseas, Bank Audi 
Syria, and Banque BEMO Saudi Fransi).  Meanwhile, trading on the BSE 
continues to be weak in line with the performance of most of the 
international stock markets, Khalaf said, noting that the average 
daily trading is currently about $500,000 compared to $7-8 million 
in 2008. 
 
SISON