Telecommunication Minister Jebran Bassil outlined Thursday the achievements of his ministry over the past nine months, stressing that cellular-rate cuts would continue. Speaking to reporters at the Telecommunication Ministry, the outgoing minister said he had submitted a policy paper on telecoms in Lebanon which explains his future vision of the sector in the country.

"We have introduced new ideas and concepts in the privatization program which we hope will be adopted," Bassil added.
He said the sector was still generating high revenues to the treasury even after the ministry cut mobile rates for both postpaid and prepaid subscribers.

Bassil explicitly rejected the idea of selling the entire telecom sector to private firms.

"Even if we have privatization, the state and the public should retain a stake in the telecom sector," he said.
 

He also outlined other major achievements that were made under his administration.

"We have increased the capacity of the cellular networks and reduced rates for both the land lines and mobiles," Bassil said.

He added the cellular penetration in Lebanon rose from 30 percent to 55 percent and this means that we have an additional 1 million subscriber."

He indicated the revenues of the telecom sector were sustained although the ministry spent over $125 million to improve and expand the networks.

Land lines rose by 12 percent to around 780,000 subscribers.

But Bassil admitted the land-line networks still needed to be modernized, adding that the ministry would soon sign contracts to update these networks.

* Lebanese resilience encourages investors at Project Lebanon

 The exceptional resilience of the Lebanese economy to the global financial crisis and the political stability that has been prevailing following the June 7 Parliament elections encouraged a great number of investors to participate in Project Lebanon 2009. "I believe that there is a great potential of investing in Lebanon, and Arabs are going to be much more interested in our country after the stability that has followed the elections," said Mike Kamel, Middle East manager of Simonin.

Simonin is a French company specialized in wood structures and wood roofing systems, and Kamel added that Lebanon's climate is suitable for the kind of wood they are using especially in the mountain areas mostly visited by  tourists.

At a time when development projects are being cancelled or put on hold across the Middle East region, the exhibition brings together Lebanese, international business people, traders, project managers, engineers and professionals to forge partnerships and broker business deals aimed at contributing to the prosperity of the Lebanese construction sector.

Bouygues, one of the top construction companies in the world, came to Lebanon 10 years ago to develop the waterfront in the solidere area but then disappeared because of the lack in the demand for construction projects back then, said Bouygues Business Development Manager, David Labardin,

"Lebanon is getting more and more politically stabilized, so as we are now building the new Larnaca airport, we are traveling back and forth to keep an eye on Lebanon and grab any opportunities that may come up," said Labardin.

"We are exploring what we can do in Lebanon in terms of new projects. The peaceful end of the elections is a good sign and I believe investors will be more interested in the country now.  Actually, we already have a lot of contacts with Arab investors who are very much interested in doing large projects in Lebanon," he added.

According to the Lebanon economic report issued by Audi Bank, real estate and construction sectors have so far managed to appropriately face the impact of the global crisis. The report said that the construction permits totaled 2,265,006 square meters in the first quarter of 2009, up by 4.4 percent from 2,170,234 square meters in the same period of 2008.
 

It added that this increase looks modest when compared to the yearly rise witnessed in the first quarter of 2008, which was close to 35 percent.

Samer Sultan Ajami, chief financial officer at Sultan Steel, believes that there is a good potential for business in Lebanon and that there is a good demand for construction materials but not the same demand that was available two years ago.  "The boom that has happened in the Gulf a couple of years ago before the financial crisis had negative repercussions on our country to a certain extent, and people were seeking to expand from the Gulf to nearby countries," he said.

"Our industry is not booming but just moving. Today we are not seeing too many foreign investors in our field of business but Lebanese investors are working on a steady base," he added.

"We usually supply contractors with steel materials for their projects but what I can say is that there is no great demand nowadays because people were waiting for the end of the elections," he said. "The fact of elections and establishment of the government is taking a big chunk of their decision," he added.

Ajami said that Lebanon's construction sector was not affected by the global financial meltdown as much as the Gulf region, but added that companies that export to the Gulf and other regions such as Sultan Steel have been affected to a certain extent.

However, the Audi Bank report stated that building activity appeared to be maintaining a positive growth according to the statistics of cement deliveries, which increased by 9.1 percent over the first quarter of 2009 as compared to the same period of 2008, reflecting the launch of many construction projects.
 

* Lebanese banks receive international acclaim

Leading Lebanese banks continued to gross highly acclaimed awards for their great performance from international organizations. The prestigious Banker Middle East magazine has selected BLOM as the best bank in the Middle East in 2009. The announcement came during a lunch ceremony held by BLOM in the presence of the media.

Saad Azhari, the chairman and general manager of BLOM, said that this is the first and only time a Lebanese bank receives this title from the magazine. The publisher of Banker  Nigel Rodriguez said earlier in Bahrain that BLOM bank has been recognized by its peers in MENA region as the "Best Bank in the Middle East, showing impressive performance, booking net in 2008 up more than 23 percent and a return on average equity of almost 21 percent. This is not the first time BLOM receives recognition from leading magazines and international group.
 

In addition, Bank Audi sal - Audi Saradar Group was granted the "Best Bank in Lebanon" award at the 2009 Euromoney Awards for Excellence Middle East ceremony. The gala dinner, which took place on June 9 at the Four Seasons Hotel in Doha - Qatar, was hosted by Euromoney and attended by around 200 prominent guests comprising top executives of the regional banking sector and financial institutions. This prestigious recognition is one of a series of awards which reinforce Audi Saradar Group's leadership with regards to Euromoney awards, confirming its positioning as the most awarded Lebanese banking institution by Euromoney.

Simon Brady, Managing Director  of Euromoney presented
the award to Bank Audi's chairman Raymond Audi.

* Lebanon's GDP estimate for 2009 higher than expected

Regional investment bank EFG Hermes revised its estimate for real GDP growth in Lebanon from 3 percent to 4 percent in 2009, and kept its forecast at 3 percent for 2010, as reported by Lebanon This Week, the economic publication of the Byblos Bank Group. It said that further upgrades to its growth forecast will be contingent on a peaceful post-election period and a strong tourism season this summer.

It indicated that the March 14 coalition successfully retained its majority in the June 7 parliamentary elections, but did not expect it to govern outside the framework of a national unity Cabinet. But EFG Hermes considered that a national unity Cabinet would not be able to implement significant economic reforms, such as privatizing the mobile phone licenses or restructuring the money-losing ElectricitŽ du Liban.

It noted, however, that the election cycle should allow for greater fiscal discipline in 2010 and expected a fiscal deficit of 10.2 percent of GDP next year, down from an estimated 11.8 percent in 2009. It added that deposit growth for 2009 looks strong, as deposits rose by 14.7 percent annually in March, and should be sufficient to cover the 2009 fiscal deficit.
 

According to EFG Hermes, the picture on economic growth is still mixed, as the Central Bank's coincident indicator of economic activity shows growth slowing in February and March 2009 to an average of 8 percent year-on-year, down from 11.7 percent annually in the second half of 2008.

Also, capital inflows are slowing, with a balance of payments deficit of $367m in March, the first negative result since May 2008.

In parallel, lending to the private sector is picking up, as credit rose 2.4 percent month-to-month in March 2009, after averaging 0.1 percent on a monthly basis in the previous six months stretching from September 2008 to February 2009.