VZCZCXRO1128
RR RUEHAG RUEHBC RUEHDE RUEHDF RUEHDH RUEHIK RUEHKUK RUEHLZ RUEHROV
RUEHSL RUEHSR
DE RUEHLB #0957/01 2380624
ZNR UUUUU ZZH
R 260624Z AUG 09
FM AMEMBASSY BEIRUT
TO RUEHC/SECSTATE WASHDC 5607
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 000957 
 
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 EINT KFLU PGOV SOCI LE
SUBJECT: LEBANON: CENTRAL BANK GOVERNOR SAYS LEBANON STILL NEEDS 
 
REFORM (ECONOMIC WEEK IN REVIEW, AUGUST 17 - 23, 2009) 
 
REF: BEIRUT 920 
 
CONTENTS 
-------- 
 
-- CENTRAL BANK GOVERNOR: DESPITE BOOMING ECONOMY, LEBANON STILL 
NEEDS REFORM 
-- PRIVATE SECTOR INITIATIVE TO SUPPORT YOUNG ENTREPRENEURS 
-- SWINE FLU CASES REACH 500 
-- INTERNET AND MOBILE PENETRATION RISE IN 2008 
-- LEBANON'S PER CAPITA INCOME AT $6,350 IN 2008 
 
 
CENTRAL BANK GOVERNOR: DESPITE BOOMING 
ECONOMY, LEBANON STILL NEEDS REFORM 
-------------------------------------- 
 
¶1. (SBU) The Lebanese economy is booming, with tourists pouring in, 
hotel occupancy rates high, bank deposits rising, and growth set to 
beat all forecasts.  Nonetheless, Central Bank of Lebanon (CBL) 
Governor Riad Salameh told the Ambassador August 14 that Prime 
Minister-designate Saad Hariri needs to form a government that can 
take on the fundamental economic problems facing the country, 
including electricity provision, water management, telecom 
privatization, and environmental protection (reftel).  Salameh 
described the efforts the CBL had undertaken to promote growth and 
development, but said the new government should take advantage of 
record capital inflows to finance infrastructure development that 
would increase job creation and promote growth.  He believed turning 
over state assets to Lebanon's resilient private sector would 
benefit Lebanon, but said political buy-in is crucial, though 
difficult, because of the political class's dependence on the 
patronage state-owned institutions provide it.  He asked that the 
United States be patient with Lebanon in its demands for increased 
budget transparency. 
 
PRIVATE SECTOR INITIATIVE 
TO SUPPORT YOUNG ENTREPRENEURS 
------------------------------ 
 
¶3. (SBU) On August 19, Antoine Abou Samra, Managing Director of 
local NGO Bader, told EconOff and Econstaff that Bader will soon 
present workshops in under-privileged Lebanese areas (such as in 
Tripoli, the south, and the Bekaa) to educate young entrepreneurs on 
writing business proposals, using $44,560 from the Embassy small 
grants program.  Bader will work with local partners such as social 
institutions and NGOs to recruit participants. 
 
¶4. (SBU) Bader (Arabic for "take the initiative") was formed in 2006 
by a group of successful Lebanese businessmen to provide technical 
and financial support to young entrepreneurs for start-ups and SMEs 
that have potential for regional or international reach.  Abou Samra 
said Bader is now in the implementation phase of several 
initiatives, including developing a "faith loan" program to lend at 
zero-percent interest, starting a Lebanese Business Angels program 
to encourage equity participation from investors in start-ups and 
small enterprises, increasing scholarships for higher education, 
embarking on a sustainable mentorship program, and strengthening 
ties between Bader members and the Lebanese diaspora. 
 
SWINE FLU CASES 
REACH 500 
-------------- 
 
¶5. (U) According to the Ministry of Public Health (MOPH), the number 
of swine flu cases reached 500, up from 105 in mid-July.  Most 
patients were youth and children, the statement said.  On July 31, 
the MOPH confirmed Lebanon's first death attributed to swine flu, a 
cancer patient in a Beirut hospital.  Minister of Health Mohammad 
Khalifeh noted that the MOPH will purchase vaccines for swine flu, 
which will be available in 2-3 weeks in government hospitals across 
the country at subsidized prices. 
 
INTERNET AND MOBILE 
PENETRATION RISE IN 2008 
------------------------ 
 
¶6. (U) According to the International Telecommunications Union 
(ITU), Lebanon ranked 63 out of 207 countries worldwide and third 
 
BEIRUT 00000957  002 OF 002 
 
 
out of 20 MENA countries in 2008, up from 75 worldwide and seventh 
regionally in 2007, in terms of internet penetration.  Lebanon's 
internet penetration was at 37.7%, up by 10.9% from 2007, and higher 
than the MENA average of 23.9%.  The aggregate number of internet 
users rose by 65.3% to over 1.5 million in 2008.  The ITU also noted 
a 16% surge in mobile phone penetration, which came at the expense 
of fixed lines, mainly attributed to the reduction in mobile fees 
implemented at the beginning of the year by Minister of Telecom 
Gebran Bassil.  Despite increased internet penetration and reduced 
mobile fees, the quality of both services remains behind 
international standards. 
 
LEBANON'S PER CAPITA 
INCOME AT $6,350 IN 2008 
------------------------ 
 
¶7. (U) The World Bank's (WB) annual survey on gross national income 
(GNI) per capita ranked Lebanon 94 out of 210 countries worldwide, 
and sixth out of 13 MENA countries, in terms of GNI per capita at 
purchasing power parity (PPP) in 2008.  Lebanon's GNI per capita at 
PPP was estimated at $10,880, below the MENA average of $14,389. 
Meanwhile, Lebanon ranked 89 worldwide and seventh within MENA 
countries in terms of GNI per capita (non-PPP) in 2008.  Lebanon's 
GNI per capita was estimated at $6,350, roughly half the MENA 
average of $12,643. 
 
SISON