Identifier
Created
Classification
Origin
09BEIRUT63
2009-01-15 12:03:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Beirut
Cable title:
LEBANON: ASSESSING THE IMPLICATIONS OF THE GLOBAL FINANCIAL
how-toVZCZCXRO7583 RR RUEHBC RUEHDE RUEHKUK RUEHROV DE RUEHLB #0063 0151203 ZNR UUUUU ZZH R 151203Z JAN 09 FM AMEMBASSY BEIRUT TO RUEHC/SECSTATE WASHDC 3998 INFO RUEHEE/ARAB LEAGUE COLLECTIVE RUEATRS/DEPT OF TREASURY WASHDC RUCPDOC/USDOC WASHDC
UNCLAS BEIRUT 000063
SENSITIVE
SIPDIS
STATE FOR F
STATE FOR NEA/ELA
STATE PASS USTR FRANCESCKI
STATE PASS USAID BEVER/LAUDATO/SCOTT
TREASURY FOR PARODI/BLEIWEISS/AHERN
USDOC FOR 4520/ITA/MAC/ONE
E.O. 12958: N/A
TAGS: ECON EFIN PREL PGOV LE
SUBJECT: LEBANON: ASSESSING THE IMPLICATIONS OF THE GLOBAL FINANCIAL
CRISIS ON U.S. ASSISTANCE PROGRAMS
REF: A. 08 STATE 134905
B. 08 BEIRUT 1534
UNCLAS BEIRUT 000063
SENSITIVE
SIPDIS
STATE FOR F
STATE FOR NEA/ELA
STATE PASS USTR FRANCESCKI
STATE PASS USAID BEVER/LAUDATO/SCOTT
TREASURY FOR PARODI/BLEIWEISS/AHERN
USDOC FOR 4520/ITA/MAC/ONE
E.O. 12958: N/A
TAGS: ECON EFIN PREL PGOV LE
SUBJECT: LEBANON: ASSESSING THE IMPLICATIONS OF THE GLOBAL FINANCIAL
CRISIS ON U.S. ASSISTANCE PROGRAMS
REF: A. 08 STATE 134905
B. 08 BEIRUT 1534
1. (SBU) The international financial crisis is not expected to
affect the results of ongoing bilateral assistance programs in
Lebanon. As highlighted in detail in Ref B, Lebanon has sofar
managed to avoid most of the impact of the global financial crisis.
Lebanese banks have minimal lQks to foreign counterparties affected
by the crisis, and the regulatory framework prevented Lebanese
banks' exposure to structured financial products. Because of the
strength of the banking sector, bank deposits have actually
increased in Lebanon since the crisis began, with funds coming in
from the Lebanese diaspora.
2. (SBU) Nonetheless, the slowdown in the Gulf may yet have an
impact on the Lebanon in the short and medium term. The Lebanese
economy has long been boosted by a regular stream of remittances
from Lebanese in the Gulf and elsewhere; around 350,000 Lebanese, or
one third of the workforce, are employed in the Gulf at salaries
more than four times those of workers in Lebanon. If the Gulf
economy declines, the impact on Lebanon's economy will clearly be
negative. Already some laid-off Lebanese workers have returned from
the Gulf, and if the trend continues, the result will be higher
unemployment and less disposable income for families used to
receiving remittances. Addressing the Association of Banks in
Lebanon in December 2008, Governor Riad Salameh of the Central Bank
of Lebanon urged local banks to offer more loans to the private
sector in 2009, in an attempt to create jobs and boost GDP growth.
3. (SBU) To address the potential negative impact in Lebanon, USAID
assistance programs in Lebanon in 2009-2011 will continue to focus
on economic growth through increasing job opportunities, new
business creation, income generation, access to finance, and
exports.
GRANT
SENSITIVE
SIPDIS
STATE FOR F
STATE FOR NEA/ELA
STATE PASS USTR FRANCESCKI
STATE PASS USAID BEVER/LAUDATO/SCOTT
TREASURY FOR PARODI/BLEIWEISS/AHERN
USDOC FOR 4520/ITA/MAC/ONE
E.O. 12958: N/A
TAGS: ECON EFIN PREL PGOV LE
SUBJECT: LEBANON: ASSESSING THE IMPLICATIONS OF THE GLOBAL FINANCIAL
CRISIS ON U.S. ASSISTANCE PROGRAMS
REF: A. 08 STATE 134905
B. 08 BEIRUT 1534
1. (SBU) The international financial crisis is not expected to
affect the results of ongoing bilateral assistance programs in
Lebanon. As highlighted in detail in Ref B, Lebanon has sofar
managed to avoid most of the impact of the global financial crisis.
Lebanese banks have minimal lQks to foreign counterparties affected
by the crisis, and the regulatory framework prevented Lebanese
banks' exposure to structured financial products. Because of the
strength of the banking sector, bank deposits have actually
increased in Lebanon since the crisis began, with funds coming in
from the Lebanese diaspora.
2. (SBU) Nonetheless, the slowdown in the Gulf may yet have an
impact on the Lebanon in the short and medium term. The Lebanese
economy has long been boosted by a regular stream of remittances
from Lebanese in the Gulf and elsewhere; around 350,000 Lebanese, or
one third of the workforce, are employed in the Gulf at salaries
more than four times those of workers in Lebanon. If the Gulf
economy declines, the impact on Lebanon's economy will clearly be
negative. Already some laid-off Lebanese workers have returned from
the Gulf, and if the trend continues, the result will be higher
unemployment and less disposable income for families used to
receiving remittances. Addressing the Association of Banks in
Lebanon in December 2008, Governor Riad Salameh of the Central Bank
of Lebanon urged local banks to offer more loans to the private
sector in 2009, in an attempt to create jobs and boost GDP growth.
3. (SBU) To address the potential negative impact in Lebanon, USAID
assistance programs in Lebanon in 2009-2011 will continue to focus
on economic growth through increasing job opportunities, new
business creation, income generation, access to finance, and
exports.
GRANT