VZCZCXRO7319
RR RUEHAG RUEHBC RUEHDE RUEHDF RUEHDH RUEHIK RUEHKUK RUEHLZ RUEHROV
RUEHSR
DE RUEHLB #0502/01 1260536
ZNR UUUUU ZZH
R 060536Z MAY 09
FM AMEMBASSY BEIRUT
TO RUEHC/SECSTATE WASHDC 4809
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 000502 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR NEA/ELA AND EEB/IFD/ODF 
STATE PASS USTR FRANCESCKI 
STATE PASS USAID LAUDATO/NANDY/SCOTT 
TREASURY FOR PARODI/BLEIWEISS/AHERN 
USDOC FOR 4520/ITA/MAC/ONE 
NSC FOR SHAPIRO/MCDERMOTT 
 
E.O. 12958: N/A 
TAGS: ECON EFIN EAIR EIND PGOV KFLU LE
SUBJECT: LEBANON: GOL TAKES PRECAUTIONS AGAINST SWINE FLU (ECONOMIC 
WEEK IN REVIEW, APRIL 27 - MAY 3, 2009) 
 
CONTENTS 
-------- 
 
-- GOL TAKES PRECAUTIONS AGAINST SWINE FLU 
-- LEBANON SHOWS LIMITED PROGRESS IN 2008 UNDER EUROPEAN 
NEIGHBORHOOD POLICY 
-- MEA EXPANDS FLEET AND INCREASES DAILY FLIGHTS, 
GROUND HANDLING AFFILIATE RECEIVES IATA SAFETY CERTIFICATE 
-- TOURISM ACTIVITY AND INFLATION RISE DURING FIRST QUARTER OF 2009 
-- SIZE OF IT SECTOR ESTIMATED AT $251 MILLION IN 2008 
 
GOL TAKES PRECAUTIONARY 
MEASURES AGAINST SWINE FLU 
-------------------- 
 
¶1. (U) GOL officials have quickly begun taking necessary precautions 
to deal with the potential swine flu pandemic.  No cases of swine 
flu have been reported in Lebanon.  The Ministry of Agriculture 
(MOA) has already banned the import of pigs and pork products 
(except canned and smoked products), and announced that any 
shipments of swine arriving from blacklisted countries would be 
destroyed.  The Ministry of Public Health (MOPH) put in place a 
national emergency committee to deal with the possible pandemic. 
MOPH Director General Walid Ammar said that there are no plans yet 
to restrict travel from countries with confirmed cases of the 
disease. 
 
EU DISAPPOINTED WITH LEBANON'S PROGRESS IN 
2008 UNDER EUROPEAN NEIGHBORHOOD POLICY 
-------------------- 
 
¶2. (U) The annual progress report of the European Neighborhood 
Policy (ENP) issued by the European Commission in Beirut on April 24 
said Lebanon showed "very limited" progress in 2008.  The document 
indicated that the difficult political situation throughout the year 
slowed down the process of implementing the EU-Lebanon Action Plan. 
It also noted little progress in implementing the Paris III economic 
reform program, while progress in other fields (human rights, 
judicial reform, social sector reform, and administrative reform) 
was also slow.  The EU-Lebanon ENP Action Plan was adopted in 
January 2007 and provides EU support to Lebanon's reform efforts 
through 187 million euros allocated for the period 2007-2010. 
 
MEA EXPANDS FLEET AND INCREASES DAILY FLIGHTS, 
GROUND HANDLING AFFILIATE RECEIVES IATA SAFETY CERTIFICATE 
-------------------- 
 
¶3. (SBU) Lebanon's national carrier Middle East Airlines (MEA) 
received three new Airbus A320 aircraft and two A330 in the first 
quarter of 2009, and expects to receive an additional A330 in May 
2009, MEA Chairman Mohammad El-Hout told us April 30.  The three 
A330 will replace three leased A330 whose lease term expires in 
¶2009.  In October 2007, MEA started its fleet expansion plan.  MEA's 
current fleet consists of four A330, three A320, and six A321.  MEA 
will receive three additional A320 by 2010. 
 
¶4. (SBU) El-Hout said MEA recorded $60 million in net profits in 
2007 and expects $91 million in net profits in 2008.  He believes 
MEA will remain profitable if there is political and security 
stability.  Meanwhile, the company has already increased its daily 
flights, mostly to Europe and Arab countries, anticipating increased 
demand with the June parliamentary elections and the start of the 
summer season. 
 
¶5. (U) El-Hout noted that MEA affiliate Middle East Airlines Ground 
Handling (MEAG) has recently obtained the IATA Safety Audit for 
Ground Operators certificate.  This certificate shows that MEAG is 
compliant with international standards in terms of ground handling 
for safety and security.  MEAG is the 9th company worldwide to 
receive this certificate, El-Hout said. 
 
HUGE INCREASE IN TOURISM ACTIVITY 
SLIGHT RISE IN INFLATION IN EARLY 2009 
-------------------- 
 
¶6. (U) According to the Ministry of Tourism (MOT), the number of 
tourists visiting Lebanon rose by 53.6% during the first quarter of 
2009, compared to the first quarter of 2008, reaching 297,579 
 
BEIRUT 00000502  002 OF 002 
 
 
visitors, a significant increase over recent years.  The Economist 
Intelligence Unit (EIU) recently noted that the spillovers of the 
economic crisis would reach Lebanon through a slowdown in tourism 
activity.  However, with such a robust start, and provided relative 
political stability, tourism prospects for the rest of the year look 
promising. 
 
¶7. (U) Meanwhile, private firm Consultation and Research Institute 
(CRI) noted that the consumer price index (CPI) during the first 
quarter of 2009 rose by 0.43% relative to December 2008, and 4.12% 
compared to the first quarter of 2008.  The rise in CPI was mainly 
attributed to the rise in the prices of food and beverages, whose 
weight in the overall index is 35.4%. 
 
SIZE OF IT SECTOR ESTIMATED 
AT $251 MILLION IN 2008 
-------------------- 
 
¶8. (U) Business Monitor International (BMI) estimated the size of 
the Lebanese information technology (IT) sector at around $251 
million in 2008, and expected it to increase to $350 million in 
¶2013.  BMI stated that the sector remained below its actual 
potential, constrained mainly by an unstable political outlook.  One 
of the most critical issues facing the IT sector is a weak telecom 
infrastructure; broadband can be a catalyst for stronger economic 
growth, BMI noted.  Recently, Telecom Minister Gebran Bassil 
publicly blamed the government for not issuing broadband licenses 
and for delays in the necessary administrative and legislative 
framework. 
 
SISON