PM HARIRI PLEDGES ECONOMIC AND SOCIAL PROSPERITY

UNCLAS BEIRUT 001251 SIPDIS 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