LEBANON: UNEMPLOYMENT EXCEEDED 9% IN 2007 AND MAY RISE IN

UNCLAS SECTION 01 OF 02 BEIRUT 000473 SIPDIS SENSITIVE STATE FOR NEA/ELA AND EEB/IFD/ODF STATE PASS USTR FRANCESCKI STATE PASS USAID LAUDATO/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: UNEMPLOYMENT EXCEEDED 9% IN 2007 AND MAY RISE IN 2009 (ECONOMIC WEEK IN REVIEW, APRIL 20 - 26, 2009) CONTENTS -------------- -- NEW STUDY: UNEMPLOYMENT MORE THAN 9% IN 2007 -- LEBANON AND SYRIA DISCUSS DIALING CODE AND INTERFERENCE ON MOBILE NETWORK -- LEBANESE BROADBAND STAKEHOLDERS GROUP RAISES PUBLIC AWARENESS -- SENIOR BANKER: SUGGESTIONS FOR WEATHERING THE GLOBAL CRISIS -- SECURITY MIDDLE EAST SHOW OPENS IN BEIRUT, CUSTOMS WOULD LIKE EQUIPMENT FROM U.S. -- AMERICAN LEBANESE CHAMBER OF COMMERCE INTRODUCES BUSINESS CODE OF CONDUCT UNEMPLOYMENT MORE THAN 9% IN 2007 -------------- ¶1. (U) During the week of April 20, the Central Administration of Statistics (CAS) published its latest survey on household living conditions showing that unemployment increased from 8% in 2004 to 9.2% in 2007. The increase was mostly attributed to the July 2006 war against Israel, when over 45,000 Lebanese lost their jobs. The survey showed that university graduates suffered most from unemployment with a rate of 30.1% in 2007 compared to 21.6% in 2004. The study was prepared in collaboration with the Ministry of Social Affairs, UNDP, and the ILO. Some economists expect unemployment to rise further in 2009 with the return of Lebanese expatriates, mainly from the Gulf region, who may have lost their jobs as a result of the global financial crisis. LEBANON AND SYRIA DISCUSS DIALING CODE AND INTERFERENCE ON MOBILE NETWORK -------------- ¶2. (SBU) On the margins of the Arab Telecom and Internet Forum in Beirut on April 16, Lebanese Telecom Minister Gebran Bassil and his Syrian counterpart Imad Sabouni agreed to abolish the internal "02" area code for calls between the two countries and instead use standard international dialing, according to Antoine Boustani, Senior Advisor to Bassil. Lebanese across the political spectrum have been asking for this measure to reassert Lebanon's sovereignty. The ministers' discussions also covered the issue of frequency interference on the mobile network, and a joint committee was reactivated to follow-up on this problem, Boustani said. Sabouni's visit to Lebanon was the first by a Syrian Minister since the visit of Syrian Foreign Minister Mouallem in July 2008. LEBANESE BROADBAND STAKEHOLDERS GROUP RAISES PUBLIC AWARENESS -------------- ¶3. (U) On April 24, the Lebanese Broadband Stakeholders Group (LBSG),a coalition of professional associations, companies, and individuals lobbying for broadband availability, held a brainstorming session with two European experts on ways to push the GOL to take action on this issue. The experts stressed the importance of broadband for attracting investment and stimulating economic growth. They recommended immediate implementation of the Telecom Privatization Law and liberalization of the sector. They noted that competition and a level playing field are essential, and called on the LBSG to act as a platform to create a favorable environment for investors. SENIOR BANKER: LEBANON SHOULD MAINTAIN MACROECONOMIC IMPROVEMENTS AND INCREASE LENDING TO WEATHER THE GLOBAL CRISIS -------------- ¶4. (U) During a workshop on Lebanese banks and future prospects for the financial sector, Bank Audi Strategic Advisor Freddie Baz noted that although Lebanon has so far avoided the repercussions of the global economic crisis, certain precautionary measures should be taken to protect the economy and achieve the IMF's projected 4% growth for 2009. Baz suggested that Lebanon must maintain the improvement witnessed in recent years in its macroeconomic indicators, such as debt to GDP ratio, economic growth rate, and tax collection, and move forward with privatization. With the decline in the dollarization rate of deposits, Baz said that the Central BEIRUT 00000473 002 OF 002 Bank of Lebanon (CBL) and commercial banks should work towards increasing lending in Lebanese Pounds. More lending in the local currency, with GOL interest rate subsidies, would stimulate growth and decrease bank exposure to foreign currency vulnerabilities. SECURITY MIDDLE EAST SHOW OPENS IN BEIRUT CUSTOMS WOULD LIKE EQUIPMENT FROM U.S. -------------- ¶5. (SBU) On April 20-22, the Institute for Near East and Gulf Analysis (INEGMA) organized the Security Middle East Show in Beirut, featuring exhibitors dealing with internal and border security, critical infrastructure security, counter-terrorism, and military equipment. Senior Customs Officer Colonel Walid Habr and head of the Customs Control and Commercial Fraud Division at the Beirut Port told us that most of the equipment his office has was acquired through a 15 million euro grant from Germany to Customs, including night vision equipment and hand held detectors. Germany and Canada have also assisted in the restoration of speed boats to patrol Lebanese waters. Although Habr noted that some of the equipment they have received is U.S.-manufactured, he hoped that his division, which also deals in enforcing intellectual property, would receive equipment from the U.S. directly to enhance its ability to control ports of entry. AMERICAN LEBANESE CHAMBER OF COMMERCE INTRODUCES BUSINESS CODE OF CONDUCT -------------- ¶6. (U) On April 22, the American Lebanese Chamber of Commerce (AmCham) launched its Better Business Values (BBV),part of the Better Business Group (BBG),an initiative promoting a corporate culture of integrity for a business-friendly environment in Lebanon. The BBV includes ethical standards, equal employment opportunity, leadership skills, corporate social responsibility, corporate governance, accountability and transparency, anti-trust adherence, quality standards and consumer protection, and intellectual property rights. The Amcham has also called on non-members, such as Lebanese syndicates and business associations, to endorse the BBV. SISON