LEBANON: TELECOM MINISTRY COMMITTED TO LIBERALIZATION AND

UNCLAS SECTION 01 OF 02 BEIRUT 000451 SIPDIS SENSITIVE STATE FOR NEA/ELA AND EEB/IFD/ODF STATE PASS USTR FRANCESCKI STATE PASS USAID NANDY/SCOTT TREASURY FOR PARODI/BLEIWEISS/AHERN USDOC FOR 4520/ITA/MAC/ONE NSC FOR SHAPIRO/MCDERMOTT E.O. 12958: N/A TAGS: ECON EFIN ECPS PGOV KIPR KCORR LE SUBJECT: LEBANON: TELECOM MINISTRY COMMITTED TO LIBERALIZATION AND PRIVATIZATION (ECONOMIC WEEK IN REVIEW, APRIL 13 - 19, 2009) CONTENTS -------------- -- TELECOM MINISTER: LIBERALIZATION AND PRIVATIZATION IS OUR POLICY FOR THE SECTOR -- DRAFT LAW ON ACCESS TO INFORMATION RELEASED -- POLICE INAUGURATES ENHANCED CYBERCRIME AND INTELLECTUAL PROPERTY UNIT -- EIU EXPECTS 2.4% GROWTH IN 2009, 3.3% IN 2010 TELECOM MINISTER: LIBERALIZATION AND PRIVATIZATION IS OUR POLICY FOR THE SECTOR -------------- ¶1. (U) On April 15, Minister of Telecommunications Gebran Bassil inaugurated the two-day 9th Arab Telecom & Internet Forum in Beirut with the participation of Telecom Ministers from Syria, Jordan, Kuwait, and Saudi Arabia. Bassil said Lebanon has a clear policy for the telecom sector, consisting of liberalization and privatization. He added that Lebanon wants to give local companies priority in developing the sector, as other Arab countries have done. According to Bassil, the Ministry of Telecommunications (MOT) plans to set up publically-controlled Liban Telecom (which will control fixed lines and a third cellular license) as a first step, and will allow equity participation for cooperatives and pension funds, in addition to selling some shares on the local market. He also pointed out the need to develop the fixed line network, to cover all of Lebanon with fiber optic cable. Bassil noted that the MOT hopes to launch a media city in Lebanon in coordination with Arabsat, with incentives for investors. ¶2. (SBU) Although MOT has made progress in addressing issues such as low cellular penetration, a lack of services, and high prices, Bassil acknowledged there is still more to be done. He blamed the government for not issuing broadband licenses and for delays in the administrative and legislative framework. The MOT is currently adding 800,000 new cellular lines, to increase the cellular penetration rate from 33% in mid-summer 2008 to 57% by mid-May 2009, and plans to add another 1.2 million lines at a later stage. Although the ministry has lowered calling costs, they remain high compared to neighboring countries such as Jordan, said Bassil, adding that he hopes to be able to reduce costs further in the second half of 2009. (Comment: Bassil, who is running for a parliamentary seat on the list of opposition leader Michel Aoun, intimated throughout his remarks that he would like to stay on as Telecom Minster upon the formation of a new government after the elections. His criticisms of government inaction on broadband and other matters should be seen in the context of the election campaign. End comment.) DRAFT LAW ON ACCESS TO INFORMATION IS RELEASED -------------- ¶3. (SBU) On April 14, the National Network for the Right of Access to Information announced the release of a draft law on public access to information. Members of the network (including MPs, ministries, and NGOs, in collaboration with the American Bar Association's Rule of Law Initiative in Lebanon) hope the law will help increase government transparency and decrease corruption. Interior Minister Ziad Baroud estimated that the GOL would have saved approximately $1.5 billion annually in losses from corruption, had the law been proposed and adopted before. However, MP Yassine Jaber (close to Parliament speaker Berri) told us that chances of the law being passed anytime soon are minimal, and blamed the parliamentary majority for not attending sessions and thus preventing a quorum. The network is currently working on drafting another law on whistleblower protection. POLICE INAUGURATES ENHANCED CYBERCRIME AND INTELLECTUAL PROPERTY UNIT -------------- ¶4. (U) On April 15, the Internal Security Forces (ISF - police) inaugurated the ISF's enhanced cybercrime and intellectual property unit, in the presence of DCM Grant. The Department of State's Bureau of International Narcotics and Law Enforcement (INL) funded BEIRUT 00000451 002 OF 002 the unit through a $143,000 grant to local NGO Lebanese Intellectual Property Association (LIPA). LIPA provided technical assistance, equipment, software and training, in addition to creating an interactive website and drafting new legislation relating to cybercrime. Part of the project focused on raising public awareness about the ISF's important work through promotional materials, and setting up a hotline allowing citizens to contact the ISF directly about intellectual property and cybercrimes. EIU EXPECTS 2.4% GROWTH IN 2009, 3.3% IN 2010 -------------- ¶5. (U) According to the latest Economist Intelligence Unit (EIU) report, contraction in regional demand for Lebanese goods and services, as well as political uncertainty due to the upcoming parliamentary elections, will cause real GDP growth in Lebanon to fall to 2.4% in 2009. The global economic crisis will also affect growth in Lebanon's key tourism, real estate, construction, and financial sectors. However, the EIU expected growth to rise to 3.3% in 2010, with a slow revival in regional growth boosting investment and tourism. Meanwhile, consumer price inflation is expected to decline to 4% in 2009, and 3.5% in 2010. Last month, Central Bank Governor Riad Salameh projected economic growth of around 4% in 2009 and inflation under 4%. SISON