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RR RUEHWEB

DE RUEHLB #1042/01 2670522
ZNR UUUUU ZZH
R 240522Z SEP 09
FM AMEMBASSY BEIRUT
TO RUEHC/SECSTATE WASHDC 5747
RUEHDM/AMEMBASSY DAMASCUS 3760
RUEHTV/AMEMBASSY TEL AVIV 1415
RUEHEG/AMEMBASSY CAIRO 1370
RUEHJM/AMCONSUL JERUSALEM 4612
RHEHAAA/NSC WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC

UNCLAS BEIRUT 001042 
 
 
SIPDIS 
 
SENSITIVE 
 
STATE PASS USTR FRANCESCKI 
STATE PASS USAID LAUDATO/NANDY/SCOTT 
 
E.O. 12958: N/A 
TAGS: BTIO ECON EFIN EINT PGOV LE
SUBJECT: LEBANON RECEIVES $298 MILLION IN IMF SPECIAL DRAWING RIGHTS 
(ECONOMIC WEEK IN REVIEW, SEPTEMBER 14 - 20, 2009) 
 
CONTENTS 
-------- 
 
-- LEBANON RECEIVES $298 MILLION IN IMF SPECIAL DRAWING RIGHTS 
-- ILLEGAL OPERATORS DAMAGE TELECOM 
-- JUDICIAL TRAINING INCORPORATES IPR 
-- FDI IN LEBANON UP BY 32% IN 2008 
-- DROP IN EASE OF DOING BUSINESS RANKING 
 
IMF PROGRAM BOOSTS LIQUIDITY 
---------------------------- 
 
¶1. (SBU) Lebanon received the equivalent of $298 million in foreign 
currency reserves through the allocation of Special Drawing Rights 
(SDR) as part of a new International Monetary Fund (IMF) program 
aimed at boosting country reserves to combat the world economic 
crisis.  As a result, Lebanon's new cumulative allocation reached 
$304.8 million as of September 9, enabling it to access additional 
liquidity at no conditionality.  Although Lebanon currently faces no 
liquidity pressure, it could tap into the reserve if need arose in 
the future. 
 
ILLEGAL OPERATORS DAMAGE TELECOM 
-------------------------------- 
 
¶2. (SBU) Chairman of ISP Data Management and business incubator 
Berytech Maroun Chammas assessed that the Lebanese government's 
failure to enforce regulations, particularly in the telecom sector, 
was preventing economic growth.  On September 17 Chammas noted to us 
an increase in illegal internet provider activity, which now provide 
around 50% (or 400 megabytes) of total internet capacity.  Illegal 
operators cause a loss in state revenues, as they purchase capacity 
from sources other than public provider Ogero, and their existence 
also discourages foreign and local investment in the sector, he 
said. 
 
¶3. (SBU) Chammas criticized the Telecommunications Regulatory 
Authority (TRA), saying that it must regulate the entire market (not 
just the legal operators, as it does now) in collaboration with the 
telecom ministry to shut down all illegal operators in the sector. 
Lebanon could have achieved double-digit growth if there had been 
political stability and fair regulation, he said. 
 
JUDICIAL TRAINING INCORPORATING IPR 
----------------------------------- 
 
¶4. (SBU) Head of the Judicial Training Institute (JTI) Judge Souheil 
Abboud said work is ongoing with the National Center for State 
Courts' (NCSC) USAID-funded project to overhaul the JTI, including 
efforts to incorporate more IPR into its curriculum.  Abboud agreed 
that Lebanese judges' lack of awareness and enforcement of IPR 
issues remains one of the most important obstacles to improving the 
intellectual property environment in the country.  Given the JTI's 
limited resources, Abboud welcomed any possible future technical 
assistance from USPTO experts to increase awareness and further 
develop their knowledge of IPR. 
 
2008 FDI UP BY 32% 
------------------ 
 
¶5. (U) Foreign direct investment (FDI) in Lebanon rose by 32% in 
2008 to around $3.6 billion, according to the UN Conference on Trade 
and Development (UNCTAD) 2009 World Investment Report.  Arab 
countries accounted for 90% of total FDI, mostly in the real estate 
sector, with 63% of total FDI from Saudi Arabia alone.  UNCTAD's FDI 
estimate is slightly higher than the Inter-Arab Investment Guarantee 
Corporation (IAIGC) estimate of $3.2 billion. 
 
DROP IN EASE OF DOING BUSINESS 
------------------------------ 
 
¶6. (U) Lebanon's ranking fell in terms of ease of doing business in 
the International Finance Corporation's Doing Business in 2010 
report.  Ranked 108th out of 183 countries worldwide in 2010, 
Lebanon fell from 101st in the 2009 survey.  Among MENA countries, 
Lebanon ranked 12th out of 19.  The survey nonetheless noted 
improvements in simplifying mechanisms for paying business taxes and 
business start-up procedures.  The report ranks economies based on 
ten indicators: ease of starting a business, dealing with licenses, 
employing workers, registering property, access to credit, 
protecting investors, paying taxes, trading across borders, 
enforcing contracts, and closing a business. 
 
SISON