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Viewing cable 09BEIRUT451, LEBANON: TELECOM MINISTRY COMMITTED TO LIBERALIZATION AND

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Reference ID Created Released Classification Origin
09BEIRUT451 2009-04-21 09:53 2011-08-24 16:30 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Beirut
VZCZCXRO4920
RR RUEHAG RUEHBC RUEHDE RUEHDF RUEHIK RUEHKUK RUEHLZ RUEHROV RUEHSR
DE RUEHLB #0451/01 1110953
ZNR UUUUU ZZH
R 210953Z APR 09
FM AMEMBASSY BEIRUT
TO RUEHC/SECSTATE WASHDC 4722
INFO RUEHEE/ARAB LEAGUE COLLECTIVE
RUCNMEM/EU MEMBER STATES COLLECTIVE
RHEHAAA/NSC WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC
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