LEBANON: PRESIDENTIAL DELEGATION FOR LEBANON MEETS

C O N F I D E N T I A L SECTION 01 OF 04 BEIRUT 003104

SIPDIS

SIPDIS

NSC FOR ABRAMS/DORAN/MARCHESE/SINGH
STATE FOR NEA/ELA, NEA/FO:ATACHCO

E.O. 12958: DECL: 09/25/2016
TAGS: EAID ECON LE PGOV PREL
SUBJECT: LEBANON: PRESIDENTIAL DELEGATION FOR LEBANON MEETS
PRIME MINISTER SINIORA

BEIRUT 00003104 001.2 OF 004


Classified By: Jeffrey D. Feltman, Ambassador. Reason: 1.4 (d)

SUMMARY
--------------


1. (SBU) The Presidential Delegation for Lebanon met with
Prime Minister Siniora on September 23 and affirmed its
commitment to achieving both immediate and long-term results
for Lebanon, as well as its commitment to a long-term
engagement with the country. The PM appealed to the
Delegation to support a comprehensive peace process in the
region. He dismissed Hizballah's message, articulated in a
massive rally the night before, as belonging to the past.
Cisco President Chambers announced a $10 million contribution
to Lebanon as a way to kick off the group's work. The
Delegation and the Prime Minister discussed Lebanon's
economic strengths and weaknesses and proposed some ideas to
consider, including internships for Lebanon's university
graduates. The PM agreed to make several cabinet members
available for followup and coordination to include quarterly
videoconferences. Finally, Assistant Secretary Powell
announced the creation of the US-Lebanon Partnership Fund and
pledged continuing USG support for Lebanon in the Core Group.
End Summary.


2. (SBU) The Presidential Delegation for Lebanon, headed by
Assistant Secretary Dina Powell and including Mr. John
Chambers, President and CEO, Cisco Systems, Mr. Yousif
Ghafari, Chairman, Ghafari Inc., Mr. Ray Irani, Chairman,
Occidental Petroleum Corporation, Ambassador Jeffrey Feltman,
and Mr. Craig Barrett, Chairman, Intel Corporation (who did
not travel to lebanon),met with Prime Minister Siniora on
September 23 at the Grand Serail to discuss its proposed role
and coordinate with the GOL.

NOT A VISIT, BUT A COMMITMENT
--------------


3. (SBU) Cisco's John Chambers, speaking for the
Presidential Delegation, thanked the Prime Minister for his
interest and assured him that the Presidential Delegation was
at the service of the people of Lebanon. Mr. Chambers
informed the Prime Minister that the people of America, long
known for their generosity, were genuinely interested in
helping Lebanon, not only to repair the considerable damage
of the war, but to catapult the country into becoming a
leading example in the region for stability, democracy and
prosperity. Mr. Chambers promised the Prime Minister that
the Delegation's presence in Lebanon was not simply another
"assessment visit," but rather a "firm commitment" that will
not only provide long-term assistance and advice, but will
work extremely hard to get "visible, concrete results" in the
next few months. Mr. Chambers assured the Prime Minister,
that as businesses who are deeply attuned to the global
market, his company and the other corporate members of the
Delegation, are able to act with speed, decisiveness, and to
great effect.

A REQUEST FROM SINIORA
--------------


4. (SBU) Prime Minister Siniora expressed his deep
appreciation for the generous and significant outpouring of
support and funds from the American people through the U.S.
Government. He particularly wished to thank President Bush
for his steady, firm support of democracy, sovereignty, and
the pro-reform movement in Lebanon. PM Siniora also stated
that he was very interested in the Delegation's plan to
establish a fund that will provide even greater resources to
help with the reconstruction of his beloved country.


5. (C) But the Prime Minister also made a specific request
that was outside the realm of reconstruction. He asked the
assembled executives, who he understood to be close
associates of the President, to urge President Bush to pursue
a just, comprehensive peace process in the region as soon as
possible. PM Siniora maintained that the just-concluded
conflict in Lebanon, despite its heavy costs, may indeed have
provided "an unexpected opening" that could be used to
finally change the decades-old dynamic of inertia and even,
on some issues, a hardening of positions. PM Siniora

BEIRUT 00003104 002.2 OF 004


insisted that the longer a comprehensive solution is delayed,
the greater the opportunity will be for reactionary, violent
forces in the region to succeed. He said the forces of
democracy and moderation were in a race against time and had
to move quickly. The Assistant Secretary and her colleagues
said they would relay this message.


6. (C) After leaving the room to take a call from Tunisian
President Ben Ali (who, to his amusement, Siniora's staff had
mistaken for Algerian President Bouteflika) Siniora rejoined
the meeting. Upon his return, Irani conveyed the best wishes
and support of the American people and their admiration for
what Siniora had accomplished, in particular in
reconstruction, and the personal esteem of FLOTUS for Mrs.
Siniora. "Without you," Irani said to the PM, "all the
alternatives are bad."

COUNTERPOINT TO HIZBALLAH'S VISION
-------------- --------------


7. (C) With the previous evening's Hizballah rally fresh in
mind, Siniora responded "we need stability; other parties
want to take the country elsewhere. This is important for
the whole region, as all forces of moderation feel like they
are being foresaken." The Ambassador noted that foreign
investors are not encouraged by scenes like the rally, which
had drawn hundreds of thousands. Siniora responded that
Lebanon is a democracy, and that the events of the previous
evening were instigated by people wedded to the past. We
need to "sell the dream" he said. The Ambassador added that
Hizballah SYG Nasrallah had questioned whether Lebanon should
be linked to the West at all, and that the executives on the
Delegation provided the counterargument.


8. (C) Siniora amplified this: "Nasrallah tried to say that
development has accomplished nothing." He added that "in two
months this government has stopped the war, obtained the
withdrawal of the IDF, and ensured national unity. This
government has been very successful and we shouldn't be
shaken; we should stand fast and carry on the process. We
should focus on what we can do in achieving results, not
waste time in silly arguments. We should encourage those who
have real interests in developing and strengthening the
country." He then cited UN reconstruction official David
Shearer's estimation that Lebanon had moved from crisis to
recovery faster than any other he had seen. (Note: Siniora
was obviously moved by this praise and has trotted it out for
a number of audiences as a counter to his critics' assertions
that the GOL was slow to help its people during and after the
crisis. End Note.)

CISCO'S CONTRIBUTION
--------------


9. (SBU) Chambers steered the discussion away from politics.
"I'm not a politician, I'm a businessman who listens."
Chambers stressed the urgency of getting on with
reconstruction and economic recovery and promised to convey
that urgency, and the need for moderation in Lebanon, to
President Bush. Chambers said that Lebanon, with its
superior health care and education sectors, can be a model
for the region and for other regions as well.


10. (SBU) At this point Chambers announced Cisco's initial
contribution to Lebanon within the framework of the
Delegation's reconstruction effort. Chambers said that Cisco
will invest $10 million in a Capital Investment Fund through
local banks to support Small and Medium Enterprises (SMEs),
and that Cisco will also create and provide salary support to
Cisco Network Academies in Lebanon, expanding these Academies
from 21 to 42. In addition, Cisco in cooperation with the
other US firms will offer graduates from Lebanese
universities internships overseas and in the US, with the
focus on ensuring that these graduates return from their
internships to contribute to the skilled workforce and
economic development of Lebanon.

PLAYING TO LEBANON'S STRENGTHS
--------------


11. (SBU) Chambers then asked Siniora whether it might be

BEIRUT 00003104 003 OF 004


realistic that the team, working with GOL economic
policymakers, could add 3-4 percent to Lebanon's GDP. Is
that too big a stretch, he asked? Siniora responded that if
Lebanon continues to look backward its bound to stay where it
is and continue to make mistakes. We need to understand what
are the comparative advantages of Lebanon; for example, the
country is not rich in energy, but there may be a chance for
offshore exploration. Lebanon doesn't have cheap labor and
must import labor. Neither does Lebanon have vast stretches
of agricultural land like Syria, for example, and must
therefore design its agricultural sector in a smarter way.
Lebanon's real strength is its people, all of whom are
potential entrepreneurs. "Most Lebanese are daring and
aggressive, and the economy creates energy and competition."


12. (SBU) The most important focus is on education, the PM
continued. The Lebanese are prepared to forego food itself
to ensure an education for their children. Lebanese
everywhere are successful, the PM said. The main asset in
the Lebanese people is ambition. How to take advantage of
this? Your company is the best at this, Siniora continued.
Create university departments, scholarships, raise standards
of education. We have had a "democracy of education,"
Siniora added, "but access to education has sometimes come at
the expense of quality."


13. (SBU) Chambers agreed that the first priority should be
education and noted Irani's generosity in this field. He
said that Cisco would help university level students by
doubling or tripling their Network Academies in Lebanon and
then hiring 1000 of those graduates to place them in NGO's.
The problem with graduates, Chambers said, is that they feel
the need to leave Lebanon.

NEW SECTORS
--------------


14. (SBU) Chambers added that the group, with its business
ties in the US, can bring venture capital and financing for
such sectors as health care, which will be the highest-growth
sector in the future. He noted that Lebanese doctors are at
an advantage because they are of high quality and
multilingual. Lebanon can be a regional hub for health care.


15. (SBU) Chambers said that venture capital can also be used
in Lebanon to grow companies, and not merely with financial
infusions. He noted that he had not used the venture capital
he had available to grow Cisco, but that he had taken more
advantage of the expertise available from venture
capitalists. Some of this kind of help can be used in a
variety of business sectors in Lebanon -- for example, he
noted, Lebanon in the near future might not import US
television programming for its local market, but might
instead buy scripts from US companies and produce the shows
locally. In this vein, Chambers said that he would like to
kick off a long-term relationship with the US business
community "with tangibles built-in" that would produce both
immediate and long-term results.


16. (SBU) Siniora suggested setting up an action plan, and
Chambers seized on the idea and asked with whom the
Delegation should interface with. Siniora said that he would
put his Finance, Economy, Social Affairs, Education and
Communications Ministers at their disposal.

NEXT STEPS
--------------


17. (SBU) Chambers said that "while everyone talks of
rebuilding infrastructure, the infrastructure of the future
is broadband internet." Siniora noted that the GOL is making
great progress on broadband internet. (Note: Approval for
DSL internet access, a now-mature technology that would be
Lebanon's first true broadband access, has been stalled for
unknown reasons in the Council of Ministers for over four
months. End Note.) Chambers said that new technologies
including wireless broadband are available for Lebanon to
take advantage of.


18. (SBU) Siniora Advisor and previous Washington Ambassador
Mohamed Chattah asked the group how it would implement its

BEIRUT 00003104 004.2 OF 004


tangible assistance with the GOL. Chambers said that the
group would put together its ideas in Washington and ask the
GOL to prioritize them. It would also ask the GOL to be
frank about which proposals it would prefer the group not
pursue, whether for political or any other reasons. Once a
quarter, Chambers proposed, the group and its GOL
counterparts can get together for a videoconference session,
for which Chambers offered to supply and set up the
equipment. Siniora welcomed this idea and noted that the
Delegation's presence and work send a strong signal the
Lebanon is not being left alone, and could attract other
investors. He noted his own business background and that he
understands how businesspeople think.


19. (SBU) Chambers asked about financing for housing.
Siniora responded that the GOL has provided important help
already. Over 100,000 housing units have been damaged,
15,000 of which were totally destroyed, and the GOL will need
$2 billion for housing compensation. Chambers asked Siniora
to give his priorities and offered to work with NGO's.
Siniora asked the Delegation to adopt a village, as he had
been seeking from each donor, and Chattah and Siniora
promised to send the Delegation a list of villages that need
reconstruction help. Chattah added that Lebanon had to raise
the growth rate by several percent, "leapfrogging" the
crisis. Siniora appealed to the group not to let its
initiatives get bogged down in politics.


20. (SBU) Siniora welcomed the group's idea for internships
in the US, and said that "by providing internships for the
students who really excel, we can introduce competition for
students also, and they will receive an award for their
performance." At this point Ghafari interjected that he had
talked to Lebanese students who had had negative impressions
of the US before their internships there and that following
their time in the US their impressions were completely
changed to the positive. Siniora agreed: "people don't like
what they don't know."

OFFICIAL AND NONOFFICIAL SUPPORT
--------------


21. (SBU) Assistant Secretary Powell addressed Siniora
specifically to let him know that the President and the
Secretary made the Delegation a special priority as a

SIPDIS
reflection of their confidence in Siniora. They stand by the
PM and want the group's initiatives to be under his
leadership. She added that the group would announce on
Monday the creation of a US-Lebanese Partnership Fund and the
launch of its website, which will permit any visitor to
contribute to Lebanon's reconstruction. She expected that
Arab-Americans in particular would contribute generously.
The Fund and its contribution mechanism would follow the same
model used following the Pakistan earthquake. USAID Senior
Deputy Assistant Administrator Mark Ward added that the Fund
to be announced will be able to move quickly because it will
not be bound by the same restrictions and conditionalities
that govern other initiatives such as USAID funding. Siniora
praised the Fund proposal and said, "don't let it lose
momentum."


22. (SBU) A/S Powell added that the USG would continue to
work with the Lebanon Core Group on the reconstruction
effort, and that NSC, State and Treasury would provide
leadership.


23. (SBU) The Delegation did not have the opportunity to
clear on this cable.
FELTMAN