VZCZCXRO5281
RR RUEHBC RUEHDH RUEHKUK RUEHROV
DE RUEHLB #0153/01 0480618
ZNR UUUUU ZZH
R 170618Z FEB 10
FM AMEMBASSY BEIRUT
TO RUEHC/SECSTATE WASHDC 6541
INFO RUEHEE/ARAB LEAGUE COLLECTIVE
RHEHAAA/NSC WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC

UNCLAS SECTION 01 OF 02 BEIRUT 000153 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ECON EFIN EINT PGOV LE
SUBJECT: GOL RENEWS MOBILE OPERATORS' MANAGEMENT CONTRACT (ECONOMIC 
WEEK IN REVIEW, FEBRUARY 8 - 14, 2010) 
 
CONTENTS 
-------- 
 
-- GOL RENEWS MOBILE OPERATORS' MANAGEMENT CONTRACT; PRIVATIZATION 
STILL IN THE WORKS 
-- WORLD BANK ESTIMATES 7% GDP GROWTH IN 2010 AND 2011 
-- FRENCH INSEE ESTIMATES HIGHER 2009 REAL GDP GROWTH FOR LEBANON 
-- LOW QUALITY OF BROADBAND HURTING COMPETITIVENESS 
-- LEBANON IMPROVES SIGNIFICANTLY IN LOGISTICS PERFORMANCE INDEX 
 
GOL RENEWS MOBILE OPERATORS' 
MANAGEMENT CONTRACT 
---------------------------- 
 
¶1. (SBU) Gilbert Najjar, the telecom ministry official responsible 
for the two GOL-owned mobile companies, said the cabinet extended 
the management contract for the two operators for six months 
starting February 1, 2010.  According to Najjar, Telecom Minister 
Charbel Nahas will use this period to gather data on the mobile 
sector, outline the options for the privatization of the two mobile 
companies, and submit them to cabinet.  Options include a public 
offering, strategic investors with management control, a combination 
thereof, or other possibilities, he said.  Najjar insisted that "no 
one said we will delay privatization or that privatization will not 
take place."  Nahas told us separately that he will have an idea of 
how the privatization will be structured before the end of May 2010. 
 
 
WORLD BANK ESTIMATES 7% GDP 
GROWTH IN 2010 AND 2011 
--------------------------- 
 
¶2. (U) Lebanon's GDP growth is estimated to reach 7% in 2010 and 
2011, according to the World Bank's (WB) latest Global Economic 
Prospects report.  This rate compares favorably with the rest of the 
MENA region, where GDP is projected to grow by 3.7% in 2010 and 4.4% 
in 2011.  The report based its estimate on the assumption that if 
economic activity flourished in times of global economic crisis as 
it did in Lebanon in 2009, then economic indicators should continue 
along the same growth trend in 2010.  The WB also estimated 7% 
growth for Lebanon in 2009, the second-highest growth rate in the 
MENA region. 
 
FRENCH INSEE ESTIMATES HIGHER 
2009 REAL GDP GROWTH FOR LEBANON 
-------------------------------- 
 
¶3. (SBU) Lebanon recorded a real GDP growth rate of 8% in 2009, 
according to Alain Tranap, head of the international cooperation 
unit at the French National Institute for Statistics and Economic 
Studies (INSEE).  Samir Nahas, head of the EU-funded program at the 
prime minister's office, told us Tranap visited Beirut in early 
January to review GDP calculations based on the national accounts 
series prepared by the PM's office and to prepare a preliminary 
estimate of real growth in 2009.  A higher growth number would 
improve Lebanon's debt-to-GDP ratio, a trend the IMF is pushing the 
GOL to maintain.  It is expected that once the GOL publicly endorses 
INSEE's 2009 real GDP growth figure, the World Bank and IMF will 
revise their estimates accordingly, as they did in 2008. 
 
LOW QUALITY OF BROADBAND 
HURTING COMPETITIVENESS 
------------------------ 
 
¶4. (U) Low broadband penetration, low bandwidth and high prices are 
negatively impacting Lebanon's private sector competitiveness 
regionally and internationally, according to the World Bank (WB). 
As a result, jobs are shifting to other locations in the region, 
potentially impacting the country's long-term economic development, 
it said.  The WB attributed the lack of high quality broadband to a 
number of factors, including the delay in merging the operations of 
the telecom ministry and fixed-line public provider Ogero into a 
corporate entity, in addition to constraints placed on the ability 
of the Telecommunications Regulatory Authority (TRA) to regulate the 
sector.  The Lebanese Broadband Stakeholders Group (LBSG), a 
coalition of professional associations, companies, and individuals, 
has been the most active group lobbying for broadband availability 
in Lebanon. 
 
LEBANON IMPROVES SIGNIFICANTLY 
IN LOGISTICS PERFORMANCE INDEX 
------------------------------ 
 
¶5. (U) Lebanon ranked 33rd out of 155 countries worldwide and 3rd 
out of 17 MENA countries in the World Bank's (WB) 2010 Logistics 
Performance Index (LPI).  The ranking constituted a significant 
improvement, as Lebanon had ranked 98th worldwide and 13th 
 
BEIRUT 00000153  002 OF 002 
 
 
regionally in the previous survey conducted in 2007.  The LPI 
measures countries' logistics environments based on six sub-indices, 
including supply chain performance, that cover customs procedures 
and efficiency, infrastructure quality, ease of arranging 
competitively priced shipments, competence and quality of logistics 
services, ability to track and trace consignments, and timeliness in 
reaching a destination. 
 
SISON