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Viewing cable 08BEIRUT1523, LEBANON: CHATAH SAYS GOVERNMENT UNITED ON ECONOMIC

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Reference ID Created Released Classification Origin
08BEIRUT1523 2008-10-24 15:18 2011-08-24 16:30 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Beirut
VZCZCXRO3569
RR RUEHBC RUEHDE RUEHKUK RUEHROV
DE RUEHLB #1523/01 2981518
ZNR UUUUU ZZH
R 241518Z OCT 08
FM AMEMBASSY BEIRUT
TO RUEHC/SECSTATE WASHDC 3360
INFO RUEHEE/ARAB LEAGUE COLLECTIVE
RHEHAAA/NSC WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC
UNCLAS SECTION 01 OF 02 BEIRUT 001523 
 
SENSITIVE 
 
SIPDIS 
 
DEPT FOR EU MEMBER STATES COLLECTIVE 
STATE FOR NEA/ELA 
STATE PASS USTR 
TREASURY FOR MNUGENT AND SBLEIWEISS 
USDOC FOR 4520/ITA/MAC/ONE 
NSC FOR ABRAMS/RAMCHAND/YERGER/MCDERMOTT 
STATE PASS USAID FOR BEVER/LAUDATO/SCOTT 
 
E.O. 12958: N/A 
TAGS: ECON EFIN EAID PGOV LE
SUBJECT:  LEBANON:  CHATAH SAYS GOVERNMENT UNITED ON ECONOMIC 
 
REFORM 
 
SUMMARY AND COMMENT 
---------- 
 
1. (SBU) During a Paris III donor briefing on October 23, Finance 
Minister Mohammad Chatah stressed the current government's 
commitment to improving the standard of living of the Lebanese 
people by fostering an economic climate that encourages investment, 
creates jobs, and supports its people through strong social 
services.  He insisted that the government does not view itself as a 
transition government, and that it is cooperating across party lines 
to accomplish significant reforms during its short mandate.  To 
start, he said, the cabinet would take up the 2009 budget law and a 
new IMF Emergency Post Conflict Assistance (EPCA) program in its 
next meeting October 30.  Chatah's presentation provided a coherent 
vision of how the Lebanese state should work on behalf of its 
people, and could serve as a model for March 14's campaign platform 
for the 2009 parliamentary elections.  End summary. 
 
WIDE POLITICAL SUPPORT FOR ECONOMIC REFORM 
---------- 
 
2. (SBU) Ambassador and Embassy officials attended Lebanon's Fifth 
Donor Meeting on the Implementation of the Economic and Social 
Reform Program on October 23 at the Grand Serail.  Finance Minister 
Mohammad Chatah said political stability following the Doha 
agreement opened the door for the resumption of a national dialogue 
to address certain high-profile political issues, but stressed that 
the government was still focused on economic reform, noting it had 
reaffirmed the "principles of Paris III" in its ministerial 
statement.  While he said the current international economic climate 
might affect the speed of reform in certain areas, he emphasized the 
commitment of the government to sectoral reform, liberalization of 
the telecom sector, and fiscal improvement as outlined in the 
ministerial statement. 
 
3. (SBU) Chatah repeatedly stressed that the current government does 
not consider itself a transition or interim government, and that 
ministers from all political parties -- even those who disagree 
strongly on other national policy issues -- were coordinating 
efforts to accomplish reforms in the electricity, telecom, and 
social sectors, as well as in the fiscal realm.  Speaking in Arabic 
for the press microphones, Chatah spoke passionately of the 
government commitment to improving the lives of the Lebanese people 
by creating an economic climate that promotes job creation and 
higher salaries, and by building government institutions that 
provide the social and economic services the people need. 
 
ECONOMIC BRIEFING: 
ON TRACK WITH THE IMF, ECONOMY STABLE 
---------- 
 
4. (U) Chatah briefed participants on his discussions at the World 
Bank/IMF meetings earlier this month in Washington.  He said the IMF 
Board will approve a new EPCA Agreement with Lebanon in November 
2008, giving the GOL a good framework for policy implementation, and 
calming investors.  He also held an investors' forum where he met 
with investment bankers and private sector actors interested in 
investing in Lebanon. 
 
5. (SBU) Chatah said the Lebanese economy continues to show 
resilience, and estimated growth to reach six percent in 2008 and 
five percent in 2009, which, along with fiscal responsibility, he 
noted, would help lower Lebanon's debt-to-GDP ratio.  In addition, 
Chatah reiterated his previous pleas that donor countries convert 
assistance pledges for development projects into budgetary support 
for the GOL. 
 
6. (SBU) While Chatah said that Lebanon would be indirectly affected 
by the slowdown in the Gulf region and its impact on Lebanese 
working or investing there, he believed the negative impact of the 
slowdown would be relatively small.  He asserted that the banking 
sector remains solid, with significant growth in deposits during the 
international financial crisis.  Despite the crisis, he noted, there 
has been no major turmoil in Lebanese sovereign bonds. 
 
COMMENT 
---------- 
 
7. (SBU) Chatah's briefing on the economy was comprehensive, but the 
 
BEIRUT 00001523  002 OF 002 
 
 
most striking part of his presentation was the coherent strategy it 
offered for economic reform and strengthening of Lebanese government 
institutions, along with a passionate commitment to the people whose 
state has so long underserved them.  His comments should serve as a 
template for a March 14 policy platform for the upcoming 
parliamentary elections. 
 
SISON