BERRI ON HIZBALLAH, THE REGION AND THE ECONOMY

C O N F I D E N T I A L SECTION 01 OF 02 BEIRUT 003057 JEDDAH FOR STEINGER E.O. 12958: DECL: 12/12/2011 TAGS: PREL PGOV PTER ECON LE IR SY SUBJECT: BERRI ON HIZBALLAH, THE REGION AND THE ECONOMY REF: A. BEIRUT 3002 ¶B. BEIRUT 2965 CLASSIFIED BY: DCM CAROL R. KALIN. REASONS 1.5 (B) AND (D). ¶1. (C) SUMMARY: IN DISCUSSING HIZBALLAH'S SIGNIFICANCE WITH THE AMBASSADOR DECEMBER 7, SPEAKER BERRI SAID THAT AMAL WAS RESPONSIBLE FOR ALL "ACTIONS" PRIOR TO ISRAEL'S 1984 WITHDRAWAL FROM BEIRUT. HE PREDICTED THAT HIZBALLAH WOULD CONTINUE TO LAUNCH CROSS-BORDER ATTACKS UNTIL A COMPREHENSIVE PEACE WAS REACHED. BERRI ARGUED THAT ARAFAT WAS TOO WEAK TO COMBAT TERRORISM, AND WARNED OF CIVIL WAR AMONG THE PALESTINIANS. ON THE ECONOMY, BERRI CLAIMED THAT HE DID NOT OPPOSE PRIVATIZATION, BUT WOULD USE HIS ROLE AS SPEAKER TO INFLUENCE THE PRIORITIZATION OF ECONOMIC REFORM MEASURES. BERRI THANKED THE AMBASSADOR FOR HIS DECEMBER 3 TOUR OF SOUTH LEBANON FOCUSED ON DEMINING ISSUES. END SUMMARY. ¶2. (C) HIZBALLAH'S ROLE: DURING A DECEMBER 7 MEETING WITH SPEAKER NABIH BERRI, AMBASSADOR, ACCOMPANIED BY LEBANON DESK OFFICER TIM POUNDS AND POLOFF, SOLICITED BERRI'S VIEW ON WIDESPREAD SPECULATION THAT HIZBALLAH MAY BE REASSESSING ITS TACTICS. BERRI SAID THAT THE PATH HIZBALLAH CHOOSES WOULD DEPEND ON THE COURSE OF U.S.-IRANIAN RELATIONS. RECALLING HIZBALLAH SYG'S DECEMBER 1 REMARKS THAT SHEBA' FARMS WERE NOT THE ONLY OCCUPIED LEBANESE TERRITORY (REF A),BERRI PREDICTED THAT THERE WOULD BE NO END TO CROSS-BORDER ATTACKS UNTIL THERE WAS A COMPREHENSIVE PEACE AGREEMENT. HE ASSERTED THAT "THE ISSUE IS WITH THE SYRIANS," AND GIVEN SYRIA'S INFLUENCE IN LEBANON, THEIR "BROTHERLY RELATIONS" AND THE TWO COUNTRIES' REJECTION OF SEPARATE PEACE AGREEMENTS, A CESSATION OF ATTACKS WAS UNLIKELY. BERRI SAID THAT ISRAEL HAS INFLATED HIZBALLAH'S STANDING BY CREDITING IT WITH ACTS COMMITTED BY AMAL OR OTHER GROUPS. BERRI VOLUNTEERED THAT AMAL WAS RESPONSIBLE FOR ALL "ACTIONS" PRIOR TO THE 1984 ISRAELI WITHDRAWAL FROM BEIRUT. ¶3. (C) BERRI NOTED THAT THE TRADITIONAL RIVALRY BETWEEN HIZBALLAH AND AMAL HAS STRENGTHENED THE GOL'S ROLE IN THE SOUTH. FOLLOWING ISRAEL'S WITHDRAWAL FROM THE SOUTH, HE SAID, THE TWO GROUPS AGREED THAT THEY WOULD LEAVE SECURITY ISSUES TO GOL AUTHORITIES, IN ORDER TO AVOID OPEN CONFLICT BETWEEN THEM. AS AN EXAMPLE OF THIS ARRANGEMENT, HE NOTED THAT THE ISF HAD BEEN THE ORGANIZATION TO RESPOND TO A RECENT INCIDENT IN MARJAYOUN IN WHICH A FORMER SLA MEMBER WAS ATTACKED. HE ALSO CITED THE ISF'S ROLE IN ENSURING SMOOTH MUNICIPAL ELECTIONS IN SEPTEMBER. ¶4. (C) REGIONAL VIOLENCE: THE AMBASSADOR UPDATED BERRI ON SPECIAL ENVOY ZINNI'S WORK IN THE REGION, AND A/S BURNS' PLANS TO VISIT BEIRUT ON DECEMBER 14. BERRI SAID THAT HE DOES NOT BELIEVE SHARON WANTS PEACE. THE AMBASSADOR ARGUED THAT IN RESPONSE TO A SERIES OF SIGNIFICANT U.S. MOVES ON THE PEACE PROCESS AND THE DISPATCH OF ZINNI AND BURNS TO THE REGION, PALESTINIANS HAD LAUNCHED A SERIES OF TERRORIST ATTACKS. BERRI ACCEPTED THE AMBASSADOR'S POINT, BUT WARNED THAT ARAFAT WAS CAUGHT BETWEEN FACING A CIVIL WAR OR A WAR WITH ISRAEL. ARAFAT IS WEAK, HE SAID, AND DOES NOT HAVE THE ABILITY TO DO MORE. "IF WE END UP WITH HAMAS AND SHARON, IT WILL BE A DISASTER," HE SAID. THE AMBASSADOR RESPONDED THAT ARAB LEADERS HAVE A RESPONSIBILITY TO SUPPORT ARAFAT AND ENCOURAGE HIS COUNTER-TERRORISM EFFORTS. ¶5. (C) THE ECONOMY: TURNING TO THE ECONOMY, BERRI CLAIMED THAT ALTHOUGH HE FAVORS PRIVATIZATION, AS A TACTICAL MOVE, HE WAS HOLDING UP PRIVATIZATION OF TELECOMMS UNTIL THE GOVERNMENT MOVED AHEAD ON THE MOST COSTLY SECTORS, SUCH AS THE ELECTRICAL UTILITY, EDL. HOWEVER, BEFORE PRIVATIZATION OF EDL BEGAN, BERRI ADDED, THE GOVERNMENT SHOULD FIRST COLLECT THE THOUSANDS OF UNPAID ELECTRICAL BILLS. THE GOVERNMENT REALIZED AN ANNUAL INTAKE OF $400 MILLION FROM TELEPHONE LANDLINES, SO ITS PRIVATIZATION WAS NOT AN URGENT MATTER, AND BERRI SAID THAT HE HAD ALREADY AGREED TO THE PRIVATIZATION OF THE CELL-PHONE NETWORK. ¶6. (C) BERRI V. HARIRI: BERRI SAID THAT HE WOULD WORK WITH HARIRI ON ECONOMIC ITEMS WHEN IT WAS IN THE INTEREST OF THE BUDGET, BUT NOT WHEN HARIRI WAS "BEING LAZY." FOR EXAMPLE, BERRI SAID, HE HAD RAILROADED THE VAT LAW THROUGH PARLIAMENT AS A PACKAGE, CONTRARY TO HIS USUAL PRACTICE OF VOTING ON EACH ARTICLE SEPARATELY, BECAUSE HE BELIEVED IT WAS AN IMPORTANT STEP. HOWEVER, HE WOULD FIGHT HARIRI ON THE REDUCTION OF THE COUNCIL FOR THE SOUTH'S BUDGET. BERRI SAID THAT HE HAD ACCEPTED A 25 PERCENT REDUCTION, BUT HARIRI HAD TRIED TO SLASH THE BUDGET BY 40 PERCENT. BECAUSE PARLIAMENT DOES NOT HAVE THE POWER TO INCREASE ALLOCATIONS, ONLY TO CUT THEM, BERRI SAID THAT HE HAD THREATENED TO RETALIATE AGAINST HARIRI BY CUTTING IN AREAS DEAR TO HARIRI. BERRI SAID THAT THE FORMER ISRAELI-CONTROLLED AREA NEEDED SIGNIFICANT INFRASTRUCTURE IMPROVEMENTS, INCLUDING THE RECONSTRUCTION OF 10,000 HOMES. ¶7. (C) DEMINING: THE AMBASSADOR BRIEFED BERRI ON HIS TRIP THROUGH SOUTH LEBANON DECEMBER 3 FOCUSED ON DEMINING ISSUES (REF B). SUCH OPERATIONS, HE NOTED, IN ADDITION TO BEING A HUMANITARIAN IMPERATIVE, WERE CRUCIAL TO THE ECONOMIC REVITALIZATION OF SOUTHERN LEBANON. BERRI THANKED THE AMBASSADOR FOR MAKING THE TRIP, SAYING HE HAD FOLLOWED THE EVENTS CLOSELY. ¶8. (C) COMMENT: BERRI'S CLAIM TO ALL "ACTIONS" UNTIL 1984, LIKELY INTENDED AS A THROW-AWAY TO MINIMIZE THE SIGNIFICANCE OF AMAL'S RIVAL HIZBALLAH ON THE LEBANESE SCENE, IS STARTLING, AND IT IS UNLIKELY IF ASKED AGAIN THAT HE WOULD CONFIRM AMAL'S RESPONSIBILITY FOR TERRORIST ATTACKS AGAINST U.S. FACILITIES. BERRI'S INFLUENCE HAS ALWAYS DEPENDED ON HIS ABILITY TO OFFER PATRONAGE TO HIS SUPPORTERS. HIS ATTEMPTS TO IMPOSE AN ECONOMIC RATIONALE ON BLATANT ATTEMPTS TO KEEP AS MANY JOBS FOR HIS RETAINERS FOR AS LONG AS POSSIBLE ARE UNCONVINCING AND THE INSISTENCE ON EDL BILL COLLECTIONS RUN CONTARY TO HIS OWN POLITICAL INTERESTS, SINCE MOST OF THE UNCOLLECTED FEES ARE AMONG HIS CONSTITUENTS. HIS SUPPORT IS CRUCIAL, HOWEVER, TO THE ADOPTION OF LEGISLATION, AS HE MAINTAINS SIGNIFICANT INFLUENCE OVER THE PARLIAMENTARY PROCESS. END COMMENT. BATTLE