ECONOMY MINISTER SAFADI OPTIMISTIC ON GROWTH

C O N F I D E N T I A L BEIRUT 000122

SIPDIS

E.O. 12958: DECL: 02/05/2020
TAGS: ETRD ECON PREL PGOV EAID MEPI KIPR LE
SUBJECT: ECONOMY MINISTER SAFADI OPTIMISTIC ON GROWTH
POTENTIAL

REF: BEIRUT 118

Classified By: Ambassador Michele J. Sison for reasons 1.4 (b) and (d).


1. (U) This message is an action request. Please see
paragraph 3.


2. (C) Summary: In a February 5 meeting with the Ambassador,
Minister of Economy and Trade Mohammed Safadi requested
assistance in setting up meetings during his private March
7-14 trip to Washington. The prime minister, president, and
speaker of parliament had reached an agreement, Safadi
reported, to move forward legislation that had been submitted
to parliament by the previous cabinet, including several
bills important to World Trade Organization (WTO) accession
and intellectual property rights (IPR). Safadi expressed
optimism about the country's economic growth potential and
sought U.S. support to revitalize the railway between
northern Lebanon and the south. Safadi reported reduced
tensions between the Alawite and Sunni communities in Tripoli
and discussed his plans improve relations with regional
Christian opposition leader Suleiman Franjieh. Safadi also
described his Safadi Foundation USA's expanding role in
lobbying on behalf of Lebanese non-governmental organizations
who seek support and funding from the United States. End
summary.

REQUEST FOR MEETINGS
--------------


3. (C) Minister of Economy and Trade Mohammed Safadi, during
a February 5 meeting with the Ambassador, requested Embassy
assistance in setting up meetings during his private March
7-12 trip to Washington. (Note: He will also be meeting
with his philanthropic Safadi Foundation USA office while
there. See para. 8. End Note.) Safadi said he would speak
at the Wilson Center and at the U.S. Institute for Peace to
raise awareness about his Safadi Foundation USA, but he
requested meetings from March 9-11 at USTR, TDA, State
Department, USAID, and other government agencies. Safadi's
list of requests included Special Envoy for Middle East Peace
George Mitchell, Undersecretary for Economic, Energy, and
Agricultural Affairs Robert Hormats, Assistant Secretary for
Near Eastern Affairs Jeffrey Feltman, Middle East Partnership
Initiative (MEPI) Director Timothy Andrews, USAID
Administrator Rajiv Shah, USAID Special Assistant George
Laudato, Commerce Secretary Gary Locke, the Ex-Im Bank, the
Overseas Private Investment Corporation, the U.S. Trade
Development Agency (USTDA),the U.S. Trade Representative
(USTR),and various Congressional members. We suggest that
the Department prioritize meetings at USTR and the Department
of Commerce, as well as a stop at USTDA, in order to discuss
Lebanon's WTO accession and a possible TDA transportation
sector feasibility study.

WTO LEGISLATION UNJAMMED?
--------------


4. (C) Safadi divulged that Prime Minister Saad Hariri,
President Michel Sleiman, and Parliament Speaker Nabih Berri
recently agreed on a "new way out" for pending bills that had
been approved by the old government, including significant
legislation for WTO accession and on IPR issues, that would
be revealed in a "week or two." (Note: IPR draft laws
pending parliamentary approval include the geographic
indications law, trademark law, and the industrial designs
law. For WTO, the international trade and licensing law is
awaiting approval, as well as the general food law and the
law on animal quarantine. End note.) He had initiated a
"big drive" in the Ministry of Economy and Trade (MOET) on
IPR issues, Safadi noted, in order to enforce IPR protection
"all over" the country. Safadi told the Ambassador he had
sent a letter to "Dahiyeh" (Hizballah) threatening to cease
IPR enforcement activities in the entire country if the party
prevented the MOET from working in Hizballah-controlled
areas. If Hizballah refused his demand, Safadi threatened to
cancel all MOET enforcement efforts and point his finger
publicly at Hizballah's intransigence. Separately, Safadi
discussed with the USAID Director pending memorandums of
understanding (MOU) for the newest phase of the
USAID-supported WTO accession project and the Quality Control
and Certification Program (QCC). Both MOUs are still under
negotiation.

PLANS TO GENERATE ECONOMIC GROWTH
--------------


5. (C) Safadi expressed optimism that the new government,

unlike its hamstrung predecessors, "would be able to do
things" and reported positive signs of growth throughout the
country. Citizens, "fed up" with politics, demanded progress
on "real life" issues, such as jobs, infrastructure, and
economic growth, he said. The minister asked if U.S.
provisions of wheat under the U.S. Department of Agriculture
program started in Lebanon in 2006 would continue.


6. (C) PM Hariri had blessed his proposal to restore the
railway between northern and southern Lebanon, Safadi said.
If the cabinet approved an economic feasibility study, he
explained, it should also approve a cost study. The economic
feasibility study, Safadi proposed, might be done in
conjunction with USTDA. He stated that he had raised the
topic, as well, with the French Development Agency during
Hariri's January visit to Paris. The proposed railway,
Safadi underscored, would link the country from north to
south into one economic unit to open economic possibilities
throughout the country.

RECONCILIATION IN THE NORTH
--------------


7. (C) Tensions had eased in his Tripoli hometown, Safadi
noted, after he initiated talks with the small Alawite
population in the Jebl Mohsen area that regularly clashed
with Tripoli's Sunni majority. Safadi also described a
recent lunch with Christian opposition leader Suleiman
Franjieh -- from the northern city of Zgharta -- and detailed
his plan to organize a "big to-do" for Franjieh in Tripoli
sometime after the February 14 commemoration of former Prime
Minister Rafiq Hariri's assassination. Safadi claimed that
he had been out of town during the January 31 meeting of the
March 14 coalition (reftel),and he confirmed that he would
attend the February 14 commemoration event, which he hoped
would be a "unifying" event to which all political parties
were invited.

SAFADI USA EXPANDING
--------------


8. (C) Describing the Safadi Foundation USA, of which he is
honorary president, the Minister explained that the
foundation represented all of Lebanon, not just a certain
political grouping or geographic region. The goal of the
Safadi Foundation USA, founded only eleven months before, was
to lobby on behalf of all Lebanese NGOs seeking U.S. funding,
Safadi alleged, in return for those NGOs supporting Safadi
Foundation work in Lebanon. The Safadi Foundation USA would
host cultural events to raise its profile in the United
States, he said. (Note: The Tunis regional MEPI office
approved a $50,000 grant in July 2009 for the Safadi
Foundation to provide entrepreneurship training to 50 women
from the old city of Tripoli. The project started in October
2009 and will run until September 2010, indirectly affecting
more than 400 families. End note.)
SISON