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Cablegate: Pm Hariri Pledges Economic and Social Prosperity

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DE RUEHLB #1251/01 3291625
ZNR UUUUU ZZH
R 251625Z NOV 09
FM AMEMBASSY BEIRUT
TO RUEHC/SECSTATE WASHDC 6102
INFO RUEHEE/ARAB LEAGUE COLLECTIVE
RHEHAAA/NSC WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC

UNCLAS BEIRUT 001251

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SENSITIVE

E.O. 12958: N/A
TAGS: ECON EFIN EINT SENV PGOV LE
SUBJECT: PM HARIRI PLEDGES ECONOMIC AND SOCIAL PROSPERITY
(ECONOMIC WEEK IN REVIEW, NOVEMBER 16 - 22, 2009)

CONTENTS
--------

-- PM HARIRI PLEDGES ECONOMIC AND SOCIAL PROSPERITY
-- MICROSOFT SAYS WORK IN LEBANON REMAINS A CHALLENGE
-- NEW FINMIN STRESSED EDUCATION AND TRAINING
-- PM HARIRI TO ATTEND COPENHAGEN CLIMATE CONFERENCE
-- ARAB FORUM FOR ENVIRONMENT AND DEVELOPMENT MEETS IN BEIRUT
-- LEBANON FALLS IN 2009 CORRUPTION PERCEPTION INDEX


PM HARIRI PLEDGES ECONOMIC
AND SOCIAL PROSPERITY
--------------------------

1. (U) PM Saad Hariri, speaking at the 2009 Annual Arab Banking
Conference November 19 in Beirut, noted that his recently formed
cabinet was not only a national unity cabinet politically but also a
"social and economic development unity cabinet" that reflected the
ambitions of the Lebanese. He stressed that the ministerial
statement (currently being drafted) should be a "real introduction
to achievements awaited by all the Lebanese in all fields" in order
to "improve their living conditions and ensure a better life." To
that end, Hariri planned to attract more investment to Lebanon by
improving the country's comparative advantages and developing its
productive and creative capacities. He praised the sound policies
of the Central Bank of Lebanon (CBL) which led to a solid and
resilient banking sector.

2. (U) Meanwhile, CBL Governor Riad Salameh said that the CBL had
established a specialized unit on corporate governance in banks and
financial institutions. The CBL will continue encouraging banks'
expansion overseas and is considering extending until June 2011 the
incentives granted to banks for lending in Lebanese pounds, he said.
Salameh noted that, as a result of confidence in Lebanon's future,
banking deposits increased by 20% in annual terms, the dollarization
rate dropped to 66% (from 73% a year ago), the balance of payments
surplus reached $6 billion by October 2009, and remittances -
according to World Bank estimates - were expected to reached $7
billion.

MICROSOFT SAYS WORK IN
LEBANON STILL A CHALLENGE
-------------------------

3. (U) Microsoft Lebanon officially launched Windows 7 on November
18, although the product has been in the local market since October.
Microsoft regional director for North Africa, East Mediterranean,
and Pakistan Sherif Seddik noted that as Microsoft celebrates its
tenth year in Lebanon, it will continue to engage with the public
and private sectors to promote widespread use of technology and
genuine software. Microsoft will continue its support for the
Partnership for Lebanon, and other corporate social responsibility
commitments in the country, he said. (Note: The Partnership for
Lebanon is a U.S. private sector initiative launched after the 2006
July war by the heads of Cisco, Intel, Microsoft, Ghafari, and
Occidental Petroleum to help assist in reconstruction efforts and
create long-term growth. End note.)

4. (SBU) Microsoft country manager Leila Serhan told us that Lebanon
remained a challenging environment given the prevalence of pirated
software -- a problem in most countries in the MENA region -- and
that pirated versions of Windows 7 had already been discovered in
Lebanon and the region. Serhan said that Microsoft will nonetheless
continue to work closely with major retailers to ensure sale of
computers with genuine software, with the ministry of administrative
reform to ensure genuine software in public administrations, as well
as with the ministry of education to integrate technology in public
schools.

NEW FINMIN STRESSES
EDUCATION AND TRAINING
----------------------

5. (U) "Public service requires vision, innovation, commitment and
respect," newly-appointed Finance Minister Raya El-Hasan said
November 18, adding that "leadership needs to be inspirational."
Speaking during the opening of the Governance Institutes Forum for
Training-Middle East and North Africa (GIFT-MENA) Network Annual
meeting, she noted that education and training were top priorities
to maintain sustainability, and stressed the importance of
accountability. (Note: El-Hassan, the first woman to head the
finance ministry, worked as an advisor at the finance ministry in
the 1990s, and contributed to Paris II and Paris III reform
programs. End note.)

PM HARIRI TO ATTEND COPENHAGEN

CLIMATE CONFERENCE
------------------------------

6. (U) PM Hariri announced November 18 that he will head the
Lebanese delegation to the UN Climate Change Conference in
Copenhagen in December 2009. Following a meeting with Lebanese
environmental NGO League of Independent Activists (IndyAct), Hariri
said Lebanon will start playing an active role in the international
efforts to fight climate change. Indyact requested that Hariri
consider climate change as one of the new cabinet's top priorities
and suggested that a new national committee with public sector and
civil society stakeholders could build a long-term strategy to
tackle climate change. According to IndyAct, Lebanon has already
begun witnessing the consequences of climate change, through
increased forest fires, reduced agricultural output, and changes in
the patterns of rainfall.

ARAB FORUM FOR ENVIRONMENT
AND DEVELOPMENT MEETS IN BEIRUT
-------------------------------

7. (U) The Arab Forum for Environment and Development (AFED) held
its second annual assembly in Beirut November 19-20, during which it
presented its report on the impact of climate change on the Arab
world. According to the report, some of the greatest consequences
of climate change in the region include higher sea levels, reduction
in sources of freshwater, and extinction of endangered species.

8. (U) During the opening ceremony, two members of Lebanese IndyAct
lifted a banner saying " Arabs are more than oil," criticizing some
Arab oil-producing countries -- especially Saudi Arabia -- for their
obstructive role in global climate negotiations. In preparation for
the Copenhagen UN Climate Change Conference in December, IndyACT has
intensified its awareness campaigns for Lebanon and the Arab region
to play a more active role in climate negotiations.

LEBANON FALLS IN 2009
CORRUPTION PERCEPTION INDEX
---------------------------

9. (U) Lebanon fell in Transparency International's (TI) 2009
Corruption Perception Index (CPI), the Lebanese Transparency
Association (LTA) announced November 17. Lebanon ranked 130 out of
180 countries worldwide, and 14 out of 20 MENA countries in 2009,
compared to 102 worldwide and 11 within MENA countries in 2008 in
terms of perception of corruption. The index measures the
perception of corruption estimated by public officials and
politicians, and focuses on corruption in the public sector, which
it defines as an abuse of official power for private interests.

10. (U) According to TI, Lebanon's score in the current CPI is the
lowest ever since it was included in the index in 2004. TI noted
that Lebanon's decline reflected the deterioration following the
2005 political crisis and the absence of legal mechanisms promoting
transparency. LTA helped draft a law on access to information,
which is pending ratification, and is currently working on the draft
law for whistleblower protection.

DAUGHTON

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