Identifier
Created
Classification
Origin
05MANAMA1257
2005-08-29 13:37:00
CONFIDENTIAL
Embassy Manama
Cable title:  

AMBASSADOR'S MEETING WITH MINISTER OF FINANCE

Tags:  PREL EFIN EPET ECON KMPI ELAB BA 
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291337Z Aug 05
C O N F I D E N T I A L SECTION 01 OF 02 MANAMA 001257 

SIPDIS

STATE FOR NEA/ARPI, NEA/PI
STATE PASS USTR JBUNTIN
USDOC FOR ITA/MAC/ONE

E.O. 12958: DECL: 08/24/2015
TAGS: PREL EFIN EPET ECON KMPI ELAB BA
SUBJECT: AMBASSADOR'S MEETING WITH MINISTER OF FINANCE
SHAIKH AHMED

REF: MANAMA 1185

Classified By: Ambassador William T. Monroe, reasons 1.4 (b) and (d).

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SUMMARY
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C O N F I D E N T I A L SECTION 01 OF 02 MANAMA 001257

SIPDIS

STATE FOR NEA/ARPI, NEA/PI
STATE PASS USTR JBUNTIN
USDOC FOR ITA/MAC/ONE

E.O. 12958: DECL: 08/24/2015
TAGS: PREL EFIN EPET ECON KMPI ELAB BA
SUBJECT: AMBASSADOR'S MEETING WITH MINISTER OF FINANCE
SHAIKH AHMED

REF: MANAMA 1185

Classified By: Ambassador William T. Monroe, reasons 1.4 (b) and (d).

--------------
SUMMARY
--------------


1. (C) In an August 24 meeting with the Ambassador, Finance
Minister Shaikh Ahmed bin Mohammed Al Khalifa reaffirmed
Bahrain's commitment to move ahead quickly on implementation
issues of the U.S. - Bahrain Free Trade Agreement (FTA). On
the development of the G8 - BMENA Entrepreneurship Center,
Shaikh Ahmed pledged his support for getting the Center up
and running. He outlined an ambitious agenda for the coming
year, including increased capitalization for the Bahrain
Development Bank (BDB),reevaluation of the fuel subsidy,
enhancing customs efficiency, port privatization and
healthcare reform. End Summary.

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FTA IMPLEMENTATION
--------------


2. (C) The Ambassador briefed Shaikh Ahmed on the status of
FTA ratification in Washington, noting our interest that
Bahrain's labor laws comply with ILO core labor standards.
The Minister welcomed a planned USTR - Department of Labor
mission to Bahrain in early September. The Ambassador said
it was important that Bahrain move ahead quickly on any
outstanding implementation issues, such as IPR, to ensure
that the agreement comes into force as soon as possible. The
Minister agreed, saying the GOB would devote the necessary
resources on implementation issues to conclude any work on a
timely basis. The Ambassador also urged Shaikh Ahmed to
ensure that GOB contracts impose no Israeli boycott
restrictions. Shaikh Ahmed responded that Ambassador
Designate to the U.S. Nasser Belooshi had recently raised the
issue and promised that a statement on Bahrain's position
would be forthcoming. He also said he would review the GOB's
contract language and follow-up with the Ambassador on his
findings.


3. (C) The Ambassador raised the same subjects August 27

with Foreign Minister Shaikh Mohammed bin Mubarak Al Khalifa.
Shaikh Mohammed said he was aware of the sensitivity of the
boycott issue and pledged to work with Shaikh Ahmed and
Ambassador Belooshi on it to ensure there are no concerns.
He promised to talk to the Labor Minister to facilitate the
visit of the USTR/Labor team. (Note: Minister of Labor Al
Alawi told the Ambassador August 28 that he had received a
call from the Foreign Minister and looked forward to meeting
with the delegation. End Note.) He urged expeditious
congressional ratification of the FTA.

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ENTREPRENEURSHIP CENTER
--------------


4. (C) The Ambassador noted our concern about moving ahead
with the Entrepreneurship Center. Ministry of Finance
Director of Economic Planning Yousif Humood and MFA Bilateral
Relations Director Dhafer Al Umran had told Emboffs
previously that the GOB was hesitant to proceed before having
a plan to raise funds for a building (reftel). The
Ambassador said that funding for a building, or even a
business plan for a building, fell outside the MEPI agenda
and would not be forthcoming. The GOB should approve the
arrival of the Beyster Institute expert to begin work on the
Center as soon as possible.


5. (C) Shaikh Ahmed explained that the MFA is wary about
starting a project without a clear vision of how it would be
maintained beyond the initial two-to-three-year period.
However, his own position is that even without participation
from the G-8, the benefits of Beyster's activity in Bahrain
stood on their own merits. He said he would be in touch with
the MFA to push the project forward (Note: Subsequently the
Foreign Minister gave the green light for the Beyster
Institute expert to come as soon as possible. End Note.)

--------------
FINANCE AGENDA
--------------


6. (C) Turning to financial affairs, Shaikh Ahmed said he
hoped to improve the value of BDB holdings and increase
income from government-held properties. He said a more
robust BDB would provide a boost to the middle class by
increasing the availability of business loans.

7. (C) He acknowledged that Bahrain is currently enjoying the
benefits of high oil prices, but said the GOB would not
depend on prices to remain high in the long term. The
government would need to reevaluate its current fuel subsidy,
noting that it will spend BD 44 million (USD 117 million) to
subsidize fuel this year. He compared this to the BD 45
million it will spend on healthcare over the same period.
"Do people want cheap gas or better healthcare and
education?" he asked. "I don't think anyone has posed that
type of question to the public." His additional goals
include pension reform, the 2007 inauguration of a privatized
port, review of governmental fiscal policy, the next budget,
and revamping customs regulations. With regard to
healthcare, he said the goal was to improve the quality of
free healthcare over time and give patients the option to pay
privately for special services and accommodations.

MONROE