KUWAIT: DEMARCHE ON FINANCIAL ASSISTANCE TO THE PA

C O N F I D E N T I A L KUWAIT 000702 SIPDIS E.O. 12958: DECL: 01/14/2010 TAGS: EAID KPAL KWBG ECON EFIN SUBJECT: KUWAIT: DEMARCHE ON FINANCIAL ASSISTANCE TO THE PA REF: (A) SECSTATE 26150 (B) KUWAIT 669 (C) KUWAIT 539 Classified By: Ambassador Richard LeBaron for reason 1.5 (b) and (d) ¶1. (C) On February 15 DCM delivered ref demarche to MFA Director for Western Affairs Ambassador Khalid Babtain, stressing USG confidence in Salam Fayed's commitment to ensuring accountability and transparancy, Babtain affirmed GOK desire to assist the Palestinian Authority but repeated cautious statements made in earlier discussions the Ambassador had with the Foreign Minister and Finance Minister i.e. the GOK wishes to see a Palestinian government in place and solid controls before committing assistance funds. Babtain said he was not privy to discussions Fayyad had held with Cabinet members thus far in his visit, but took on board our appeal for generous Kuwaiti assistance and said he would convey our demarche to his superiors. ¶2. (C) Ambassador brought demarche points to the attention of the Prime Minister,s Adviser Youssef al-Ebraheem on February 15, urging support to maintain the political momentum, and requesting that the points be transmitted to the Prime Minister. Al-Ebraheem said that Kuwaiti aid for the Palestinians had never stopped, but that more recent aid had gone through the Islamic Development Bank. He said that other commitments of bilateral aid (through the Arab League) had been held up for the same reasons that other donors had been cautious--the money was not going to the right people. He noted that it might not be good tactics to have the U.S. out front on this issue, noting the counter-productive criticism of Kuwait and other Gulf states on the Hill last week, and suggested that upcoming Arab League meetings will address it. ¶3. (C) Previous to receipt of demarche request, Undersecretary of Treasury Taylor raised the need for support for the Palestinians with the Kuwaiti Finance Minister on February 9, (see reftel b). Ambassador also made the pitch to the Foreign Minister during a meeting on February 7 (see reftel c). LEBARON