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Viewing cable 09BEIRUT369, LEBANON: FINALLY, POLITICAL CONSENSUS ON CENTRAL BANK

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Reference ID Created Released Classification Origin
09BEIRUT369 2009-03-30 14:32 2011-08-24 16:30 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Beirut
VZCZCXRO3965
RR RUEHAG RUEHBC RUEHDE RUEHDF RUEHIK RUEHKUK RUEHLZ RUEHROV RUEHSR
DE RUEHLB #0369 0891432
ZNR UUUUU ZZH
R 301432Z MAR 09
FM AMEMBASSY BEIRUT
TO RUEHC/SECSTATE WASHDC 4560
INFO RUEHEE/ARAB LEAGUE COLLECTIVE
RUCNMEM/EU MEMBER STATES COLLECTIVE
RHEHAAA/NSC WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC
UNCLAS BEIRUT 000369 
 
SENSITIVE 
 
SIPDIS 
 
STATE FOR NEA/ELA AND EEB/IFD/ODF 
STATE PASS USTR FRANCESCKI 
STATE PASS USAID LAUDATO/SCOTT 
TREASURY FOR PARODI/BLEIWEISS/CORREA 
USDOC FOR 4520/ITA/MAC/ONE 
NSC FOR MCDERMOTT 
 
E.O. 12958: N/A 
TAGS: ECON EFIN PGOV LE
SUBJECT: LEBANON: FINALLY, POLITICAL CONSENSUS ON CENTRAL BANK 
APPOINTMENTS (ECONOMIC WEEK IN REVIEW, MARCH 23 - 29, 2009) 
 
CONTENTS 
-------- 
 
-- CABINET APPOINTS CENTRAL BANK VICE GOVERNORS 
-- NEW STUDY TO CREATE LEBANON ANTI-CORRUPTION STRATEGY 
-- TOURISM AND TRAVEL EXPECTED TO CONTRIBUTE OVER $7 BILLION TO 
ECONOMY 
-- LEBANON IMPROVES IN COUNTRY RISK SURVEY 
 
 
CABINET APPOINTS CENTRAL 
BANK VICE GOVERNORS 
-------------------- 
 
1. (U) On March 26, cabinet appointed four Central Bank of Lebanon 
(CBL) vice governors after the positions had remained vacant for 
more than six months because of lack of political consensus on 
filling them.  These positions are traditionally filled by people 
close to major political leaders on a confessional basis (Sunni, 
Shia, Druze, and Armenian Orthodox).  Since the vice governors 
represent the majority of the CBL's Central Council, these 
appointments will revive the important role the CBL plays in setting 
monetary and credit policy.  Other key positions in the public 
sector remain vacant, such as directors general of various 
ministries. 
 
NEW STUDY TO CREATE LEBANON 
ANTI-CORRUPTION STRATEGY 
-------------------- 
 
2. (U) On March 25, the UNDP and Lebanese Transparency Association 
(LTA) presented a study on fighting corruption intended to assist 
the GOL in formulating its national anti-corruption strategy.  The 
study is part of the UNDP/LTA project launched in 2005 with Danish 
Trust Fund and UNDP funding, "Towards a National Dialogue on 
Corruption in Lebanon."  While UNDP resident representative Marta 
Ruedas noted some improvements in Lebanon's legal and institutional 
framework, she spoke out strongly on the need to combat the rampant 
corruption in Lebanon's public and private sectors. 
 
3. (U) Calling corruption "the most transparent thing in Lebanon," 
because of its pervasiveness, Interior Minister Ziad Baroud said 
that since 1990 there has been no political will to fight 
corruption, because its existence maintains the power base of the 
political elite. He highlighted the need for parliament to support 
the draft law on access to information, as a step in toward public 
sector transparency and combating corruption.  Lebanon ratified the 
UN Convention against Corruption in 2008. 
 
TOURISM AND TRAVEL EXPECTED TO 
CONTRIBUTE OVER $7 BILLION TO ECONOMY 
-------------------- 
 
5. (U) The World Travel and Tourism Council (WTTC) estimated that 
the travel and tourism industry in Lebanon would make a direct 
contribution of $2.59 billion to the economy (9.3% of GDP) in 2009. 
Total contribution to the economy (direct and indirect) is estimated 
at $7.78 billion (a whopping 28.1% of GDP) and 28% of total 
employment.  According to the Ministry of Tourism, the number of 
tourists visiting Lebanon in 2008 reached a record 1.33 million, a 
31% increase compared to 2007, and is expected to reach two million 
in 2009, assuming continued political stability. 
 
LEBANON IMPROVES IN 
COUNTRY RISK SURVEY 
------------------- 
 
6. (U) In Euromoney magazine's semi-annual country risk survey, 
Lebanon ranked 102 out of 186 countries worldwide, compared to 134 
in the previous September 2008 survey.  While out of 20 MENA 
countries, Lebanon ranked 12 compared to 15 in the previous survey. 
Lebanon's rank improvement was the eighth highest rise worldwide, as 
a stabile political environment and a strong economic performance in 
the face of the global financial crisis improved relative 
performance.  This improvement will ease Lebanon's ability to borrow 
at lower rates in international capital markets. 
 
SISON