KUWAIT FUND DIRECTOR GENERAL DISCUSSES AID TO

1. (U) Action request at para 13.



2. (SBU) Summary and Comment: In an August 24 meeting with
the Ambassador, the Director General of the Kuwait Fund for
Arab Economic Development (KFAED), Abdulwahab Al-Bader, made
the following key points: (1) GOK has donated 25 million USD
in grants to the Palestinian Authority during the 1990s and
is collecting data on other funding provided to-date; (2)
KFAED is ready to allocate 60 million USD in grants to Iraq
for health and education but needs additional information on
site locations and programs from Iraq; (3) KFAED would like
to come to settlement with Afghanistan on its outstanding
arrears in order to renew GOK loan assistance; (4) KFAED has
launched a new educational exchange program for Kuwaiti
engineering graduates to strengthen the Kuwaiti private
sector work force. Al-Bader requested Ambassador's
assistance in hearing from KFAED counterparts in the
governments of Iraq and Afghanistan regarding KFAED
assistance to both countries (see paras 5-8). Embassies
Baghdad and Kabul might consider making inquiries as
appropriate regarding Al-Bader's concerns. End Summary and
Comment


Kuwaiti Assistance to the Palestinian Authority


--------------------------

--



3. (SBU) On August 24, Ambassador met with Abdulwahab
Al-Bader, the Director General of the Kuwait Fund for Arab
Economic Development (KFAED), the country's leading
development organization providing loans and grants to
approximately 100 countries. This was the Ambassador's
second meeting with Al-Bader following his appointment as
KFAED Director in May 2005 (reftel A). The Ambassador asked
for Al-Bader's assistance in ascertaining the total amount of
GOK assistance to the Palestinian Authority (PA), noting how
difficult it has been to get an authoritative assistance
figure.



4. (SBU) Al-Bader echoed the Ambassador's frustration and
lamented the GOK's failure to adequately track and receive
credit for the millions of USD in assistance it has provided
to the PA and others. He shared with the Ambassador a
spreadsheet that outlined 25 million USD in GOK grants
administered by the World Bank and the Arab Fund for PA
health and education projects (reftels B and C). Al-Bader
added that Foreign Minister Al-Sabah, in his capacity as
Chairman of the KFAED, had requested all ministries to
provide to the KFAED all relevant information on GOK funding
to the PA. Al-Bader said he would share the information when
available. (Note: Grants through the Kuwait Fund have not
been the main source of Kuwaiti support for the Palestinians;
funds provided in connection with Arab League commitments are
much larger. We are attempting to get a fuller picture of
the mechanisms and amounts.)


Assistance for Iraq and Afghanistan


--------------------------





5. (SBU) The Ambassador also inquired about the status of 120
million USD in promised GOK grants for Iraq (Note: On June 19
the Kuwaiti Council of Ministers doubled the original 60
million USD figure). Al-Bader explained that KFAED was ready
to allocate the initial 60 million USD but that the Cabinet
was still deciding on the source of the remaining 60 million
USD. Al-Bader speculated that KFAED would probably be asked
to fund the remainder as well.



6. (SBU) In agreement with the Iraqis, the initial 60 million
dollar grant would be divided equally between Iraq's health
and education sectors. Al-Bader explained that the 30
million USD for education would help fund approximately 31
schools. The other 30 million USD would go toward
constructing rural hospitals. Al-Bader noted that he
rejected Iraqi proposals to construct mobile hospitals,
recommending instead that the funds be used to build 10 rural
hospitals (approx. 40-90 bed units) each equipped with mobile
operating facilities.


7. (SBU) Al-Bader complained that neither funding program
had been implemented because his ministerial counterparts at
the Iraqi health and education ministries did not answer his
requests for site locations and construction requirements for
the schools and hospitals. Al-Bader noted that without the
requested information he could not solicit bids from
contractors, explaining that contractors could not bid
without specifics on location and building requirements. He
confirmed that the first 60 million USD was ready for
dispersal and that even some basic project information would
help him get started. He commented that his Iraqi government
interlocutors (minister and under-secretary level) seemed to
lack decision-making authority.



8. (SBU) With regard to Afghanistan, Al-Bader noted that the
KFAED was prepared to offer some new loan assistance, in the
form of concessionary loans, but needed GOA assistance in
addressing outstanding Afghan loan arrears dating back to the
1980s. He said that KFAED had sent a proposal to the GOA and
was flexible on how best to come to terms on the arrears to
allow for renewed GOK assistance, but has heard nothing
substantive from the GOA. (Note: The Kuwait Fund is looking
for legal cover. There is no expectation of full recovery.)


New Kuwaiti Engineering Exchange Program


--------------------------





9. (U) Al-Bader mentioned that KFAED had launched in
September 2004 a new External Training Program for Kuwaiti
engineering graduates to receive private sector work
experience and training with international engineering firms
abroad, including Europe and the United States. According to
Al-Bader, the program continues to be a success with 19
students having participated at last count, with 11 already
hired by international companies. Al-Bader plans to expand
the program in 2005/2006 to include two groups of 30
engineering graduates each (total 60 students per year) for
training and instruction abroad.




10. (U) Al-Bader explained that the main objective of the
program was to develop Kuwaiti engineering talent for the
private sector and expressed an interest in pursuing
opportunities with firms in the U.S. The Ambassador
applauded KFAED's efforts in pursuing broader bilateral
exchange opportunities with the U.S. and offered the
Embassy's assistance to further develop the program in the
U.S.


Shift to Social Sector Assistance


--------------------------





11. (U) Al-Bader noted that KFAED was making good progress in
implementing its "Five Year Plan" to shift more resources
from industry to service sector programs including health and
education. (According to its 2003/2004 Annual Report, KFAED
has funded projects in the following sectors: transportation
(33.6 percent), energy (22.6 percent), agriculture (15.5
percent), water and sewage (11.4 percent), industry (10.1
percent), communication (3.1 percent), development banks (2.5
percent), social (0.8 percent), and other (0.4 percent).)
Al-Bader mentioned that KFAED had received funding requests
for hospital construction in China in addition to existing
KFAED projects there.


Renewed Contacts with USAID


--------------------------






12. (U) Al-Bader renewed his call for increased cooperation
between KFAED and USAID and accepted the Ambassador's
suggestion that he seek to meet with USAID officials during
his upcoming visit to Washington for the World Bank/IMF
meetings in late September. Ambassador encouraged
KFAED-USAID dialogue on development initiatives and offered
Post's assistance in setting up an introductory meeting for
Al-Bader.



13. (SBU) Action Request: Kuwait Desk assistance is requested
to contact USAID Director and Millennium Challenge
Corporation for a possible meeting with Al-Bader during his
visit to Washington for the World Bank/IMF conference.
Al-Bader will be at the meetings only on the two weekend days
and would like to meet at the WB/Fund meeting site. Contact
information for Al-Bader to be supplied by e-mail.


Bio Data


--------------------------





14. (U) Abdulwahab Ahmed Al-Bader was born in 1955. He holds
a BA in Economics and was appointed Director General of the
Kuwait Fund on April 30, 2005 after having served as Deputy
Director of the Fund from 1986. He has also served as
Alternate Governor of Kuwait to the OPEC Fund of
International Development (1981-1986); Governor of Kuwait to
OPEC Fund (1986-Present); Member of the Board of the Arabic
Bank of Economic Development in Africa (1982-1994) and has
also served on the boards of Kuwait Consulting and Investment
Company, International Financial Advisors Company, and Bubyan
Fisheries Company. Al-Bader is married and speaks excellent
English.


Background on Kuwait Fund for Arab Economic Development


--------------------------



--------------------------





15. (U) KFAED is the GOK's primary vehicle for providing
assistance and aid to other countries. It was founded the
same year that Kuwait gained its independence, 1961, and was
originally intended to assist Kuwait's Arab neighbors. In
1974 its mandate was expanded to include all developing
countries. To date, KFAED has committed over 11.5 billion
USD in low interest loans to 100 countries through 650
separate projects, has provided over 323 million USD in
grants and technical assistance, and has contributed 1.15
billion USD to other development institutions.
LEBARON