VZCZCXRO5930
RR RUEHAG RUEHBC RUEHDE RUEHDF RUEHDH RUEHIK RUEHKUK RUEHLZ RUEHROV
RUEHSL RUEHSR
DE RUEHLB #0886/01 2180436
ZNR UUUUU ZZH
R 060436Z AUG 09
FM AMEMBASSY BEIRUT
TO RUEHC/SECSTATE WASHDC 5483
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 03 BEIRUT 000886 
 
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: BEXP ECON EFIN EIND ETRD KIPR KFLU PGOV SENV LE
SUBJECT: LEBANON: POLITICAL CONSENSUS IS CORNERSTONE FOR REFORMS 
(ECONOMIC WEEK IN REVIEW, JULY 27 - AUGUST 2, 2009) 
 
CONTENTS 
-------- 
 
-- POLITICAL CONSENSUS CORNERSTONE OF REFORM 
-- LEBANON CONFIRMS FIRST DEATH FROM SWINE FLU 
-- MARKET SHOWS STRONG APPETITE FOR FIVE-YEAR TREASURY BILLS 
-- AMCHAM LEBANON TO CHAIR THE AMCHAM MENA COUNCIL 
-- BEIRUT TO HOST WIPO ARAB REGIONAL MEETING IN OCTOBER 
-- CENTRAL BANK OF LEBANON PREPARES TO BECOME REGIONAL TRAINING HUB 
-- CABINET ADOPTS NATIONAL STRATEGY TO FIGHT FOREST FIRES 
-- LEBANESE NGO FOCUSES ON ENDANGERED SPECIES AND CLIMATE CHANGE 
-- MIDDLE EAST AIRLINES AMONG 25 LEADING AIRLINES WORLDWIDE 
 
 
POLITICAL CONSENSUS 
CORNERSTONE OF REFORM 
--------------------- 
 
¶1. (SBU) During a series of meetings with EconOff July 21-22, 
government officials and prominent economic consultants stressed 
that politics had stalled reform and privatization.  They believed 
political leaders wanted to preserve their vested interests in any 
future privatization.  PM-elect Saad Hariri should show strong 
commitment to reform, therefore, and engage all political partners 
from the outset, they said.  All contacts concurred that the new 
cabinet should focus on moving forward on the following: increased 
power production, electricity and telecom privatization, social 
reforms, streamlining business procedures, support to SMEs, and job 
creation. 
 
¶2. (SBU) Telecommunications Regulatory Authority (TRA) Chairman 
Kamal Shehadi assessed that PM-elect Saad Hariri was committed to 
moving ahead with telecom privatization.  Hariri asked Shehadi to 
prepare a statement on telecom reform to include in cabinet's 
ministerial statement, he said. 
 
LEBANON CONFIRMS FIRST 
DEATH FROM SWINE FLU 
---------------------- 
 
¶3. (U) On July 31, Minister of Public Health Mohammad Khalifeh 
confirmed Lebanon's first death as a result of swine flu.  Khalifeh 
said a 30-year-old man had been receiving treatment for leukemia 
when he caught the virus and died as a result.  Fifteen to 20 swine 
flu cases a day is manageable, Khalifeh said, but he warned that the 
rate would increase at the beginning of the school year in the fall. 
 Last week, the Ministry of Public Health stated the total number of 
swine flu cases had reached 105. 
 
MARKET SHOWS STRONG APPETITE 
FOR FIVE-YEAR TREASURY BILLS 
---------------------------- 
 
¶4. (SBU) On July 23, the GOL issued approximately $92 million worth 
of five-year Treasury Bills (TBs) in Lebanese Lira (LL) with a 
coupon of 9%, a senior source at the Central Bank of Lebanon (CBL) 
told us July 30.  The issue was oversubscribed, with demand -- 
mainly from commercial banks -- reaching $186 million, the source 
said.  The increased demand was driven by an anticipated drop in 
interest rates, which would boost the TBs' yield.  The GOL will 
begin issuing five-year TBs on a bi-monthly basis to absorb some of 
the banks' excess LL liquidity, while extending the public debt 
maturity.  Banking sources expect strong demand for the new 
instrument at the next auction on August 6. 
 
¶5. (U) The strong demand for five-year TBs had a slight impact on 
the money market, with the overnight rate rising from 3.5% (the 
official rate set by the CBL) to 4% mid-last week due to a temporary 
shortage in LL liquidity.  The overnight rate closed at 3.5% on 
Friday, July 24. 
 
AMCHAM LEBANON TO 
CHAIR MENA COUNCIL 
------------------ 
 
¶6. (SBU) During the annual American Chamber of Commerce (Amcham) 
MENA Council meeting on July 27-28 in Jordan, the chairmanship of 
the council was transferred from Amcham Jordan to Amcham Lebanon for 
a two-year term.  The Lebanese delegation at the meeting included 
 
BEIRUT 00000886  002 OF 003 
 
 
Amcham Lebanon president Salim Zeeni, vice presidents Arslan Sinno, 
Maher Beydoun, Richard Haykal, and board members, as well as Senior 
Commercial Specialist.  Discussions focused on regional events for 
the coming two years, including holding an environment day in Egypt 
on October 27 (featuring former VP Al Gore), a U.S.-MENA ICT Forum 
in Beirut in November 2009, and the Made in America Beirut trade 
fair in April 2010.  Participants also suggested leading more 
regional delegations to U.S. trade fairs. 
 
BEIRUT TO HOST WIPO 
REGIONAL MEETING 
------------------- 
 
¶7. (SBU) Wissam El Amil, Intellectual Property Rights (IPR) 
Specialist at the Ministry of Economy and Trade (MOET), told us that 
Beirut will be hosting the World Intellectual Property Organization 
(WIPO) Arab Regional Meeting on October 12-15 with high-level 
government representatives from the region as well as IP experts. 
El Amil noted that the MOET, in collaboration with the Ministry of 
Education, will resume its IPR awareness campaign for schools, 
interrupted due to the 2006 July war, in 2010.  Meanwhile, a new IPR 
masters degree program at the publicly-owned Lebanese University is 
set to begin in the upcoming school year.  Lebanon is working on 
improving the IPR environment, but increased awareness and training 
for judges would improve IPR enforcement, he said. 
 
CBL TO BECOME 
REGIONAL TRAINING HUB 
--------------------- 
 
¶8. (SBU) On July 29, Central Bank of Lebanon (CBL) Vice Governor Dr. 
Saad Andari told us the CBL is currently working to expand its 
training institute to serve as a training hub for central bankers in 
the region.  As a result, the CBL is re-negotiating a 1997 agreement 
with the Federal Reserve to set up a hub in Lebanon, he said, adding 
that the director of the CBL training institute, Mohammad Jabri, 
will attend a "Train the Trainers" program at the Fed in August in 
preparation for the project. Andari expected that the CBL would 
start regional training programs in Beirut in October 2009. 
 
CABINET ADOPTS NATIONAL STRATEGY 
TO FIGHT FOREST FIRES 
-------------------------------- 
 
¶9. (SBU) On July 28, Director General of the Association for 
Forests, Development, and Conservation (AFDC) Sawsan Bou Fakhreddine 
told PolEcon officer and Econ staff that the Cabinet adopted a 
National Strategy for Forest Fire Management in May 2009.  The 
strategy aims to reduce the risk of intense and frequent forest 
fires, while allowing for fires that are "socially, economically, 
and ecologically sustainable."  Work towards implementing the 
strategy will be based at the disaster management office, part of 
the Prime Minister's office, Bou Fakhreddine said. 
 
LEBANESE NGO FOCUSES ON ENDANGERED 
SPECIES AND CLIMATE CHANGE 
---------------------------------- 
 
¶10. (SBU)  On July 28, PolEcon officer and Econ staff met with the 
Executive Director of local environment NGO Indyact, Wael Hmaidan, 
and Deputy Director Soumar Dakdouk.  Indyact's currently focuses 
primarily on pushing Lebanon to ratify the Convention on 
International Trade in Endangered Species (CITES).  Dakdouk noted 
that Indyact will start working on the scoping report and 
justification needed for Lebanon to join CITES as soon as funding is 
secured from the Dutch government and Lebanese Byblos Bank.  Indyact 
hopes that Lebanon will join before the CITES Conference in Bahrain 
in 2010.  Hmaidan noted the importance of ratifying CITES, as 
Lebanon is considered a hub for the illegal animal trade worldwide. 
 
 
¶11. (SBU) Additionally, Indyact will hold a workshop in August on 
climate change negotiations for Arab media and a climate change 
conference on October 24 in Beirut.  According to Hmaidan, Indyact 
is the only NGO in the Arab region working on climate change.  The 
group is also fighting against bluefin tuna extinction, he said. 
 
 
MEA AMONG 25 BEST 
 
BEIRUT 00000886  003 OF 003 
 
 
AIRLINES WORLDWIDE 
-------------------- 
 
¶12. (U) Air Transport World Magazine, a leading magazine covering 
the airline industry, ranked Lebanese national carrier Middle East 
Airlines (MEA) among 25 leading airlines worldwide.  In 2008 MEA 
ranked 18 and 23 worldwide in terms of net profit and operational 
income respectively.  MEA flies to 29 destinations in the Middle 
East, Europe, and Africa with a current fleet of 13 Airbus planes. 
The company, owned by Lebanon's Central Bank, is expected to receive 
three additional Airbus planes by 2010. 
 
SISON