CABINET RESHUFFLE EXPECTED VERY SOON; PM'S MEN MAY

C O N F I D E N T I A L SECTION 01 OF 03 MANAMA 000050

SIPDIS

STATE PASS USTR FOR J BUNTIN
COMMERCE FOR ITA/MAC/ONE LOUSTAUNAU AND HOFFMAN

E.O. 12958: DECL: 01/10/2015
TAGS: PGOV PREL ECON ETRD BA
SUBJECT: CABINET RESHUFFLE EXPECTED VERY SOON; PM'S MEN MAY
BE MOVING OUT


Classified by Ambassador William T. Monroe for reasons 1.4
(b) and (d).

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Summary
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1. (C) The Bahraini press January 10 reported rumors of a
cabinet shuffle to be announced within days or hours. While
the press reports varied somewhat, it appear, if accurate,
that five ministers would leave, two new ministers would be
appointed, four ministers moved to new positions, two
ministries closed, and ten ministries impacted by mergers or
splits. Those reportedly departing would be Minister of
Finance and National Economy (MOFNE) Saif, Minister of
Cabinet Affairs Mutawwa, Minister of Information Hamar,
Minister of Oil Shaikh Isa, and Minister of State Shoala.
(Shaikh Isa told the Ambassador today he is not stepping
down.) Joining the cabinet would be Bahrain Monetary Agency
(BMA) Governor Shaikh Ahmed as MOFNE and University of
Bahrain professor Fatima Al Belooshi as Minister of Social
Affairs. Al Belooshi would be the second woman in the
cabinet. The net result of the shuffle, if it plays out as
described in the press, would be a diminution of PM Shaikh
Khalifa's influence and increase in King Hamad and Crown
Prince Salman's power within the cabinet. The PM may have
agreed to the changes on the condition that his son, Minister
of Transportation Shaikh Ali, be given the additional title
of deputy Prime Minister. End Summary.

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Many Changes in "Limited" Shuffle
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2. (SBU) Newspapers January 10 were abuzz with reports of a
planned cabinet reshuffle to be announced "within days or
hours." The Cabinet discussed the issue during its regular
January 9 session, chaired by Prime Minister Shaikh Khalifa
bin Salman Al Khalifa. While the press reports were not
identical, they agreed on many of the major items.


3. (SBU) While reports characterize the reshuffle as
limited, the end result would be five (of 24) ministers
sacked, two new ministers, four ministers moved to new
positions in the cabinet, two ministries dissolved, and ten
ministries impacted by either mergers or splits. In
addition, the number of deputy prime ministers would increase
from two to four. One of the new ministers is said to be
University of Bahrain professor Fatima Al Belooshi as
Minister of Social Affairs. She would join Minister of
Health Nada Haffadh as the only women ministers. The other
new minister is Shaikh Ahmed bin Mohammed Al Khalifa as
Minister of Finance and National Economy. He is currently
the Governor of the BMA, Bahrain's central bank.

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Five Ministers Are Out
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4. (SBU) The sackings have attracted the most attention.
According to press reports, those leaving the cabinet are:

-- Minister of Finance and National Economy Abdulla Saif (who
negotiated and signed the bilateral free trade agreement);
-- Minister of Cabinet Affairs Mohammed Mutawwa;
-- Minister of Information Nabeel Hamar;
-- Minister of Oil Shaikh Isa bin Ali Al Khalifa; and
-- Minister of State Abdul Nabi Al Shoala.

Saif will be named Secretary General of the Economic
Development Board (with minister rank),Mutawwa is rumored to
be appointed Bahrain's Ambassador to France, Hamar could be
an advisor to King Hamad or head of a government
organization, and Shaikh Isa and Shoala are supposed to
depart government service altogether.


5. (C) However, in a January 10 phone call, Minister of Oil
Shaikh Isa told the Ambassador that contrary to the press
reports, he would remain in the cabinet as Minister of Oil.
"I tried to retire," he said. He stated that the new cabinet
would be sworn in on Tuesday, January 11, and he scheduled a
previously requested meeting with the Ambassador on the same
day.

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Four Ministers Moving About
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6. (SBU) Four ministers will move to new positions in the
cabinet. Minister of Commerce Ali Saleh will become Minister
of Municipalities and Agriculture, replacing Mohammed Al
Sitry. Al Sitry will become minister of a newly merged
Ministry of Justice and Islamic Affairs. Current Minister of
Justice Jawad Al Arrayed will become a deputy Prime Minister,
and Minister of Islamic Affairs and Deputy PM Shaikh Abdulla
bin Khalid Al Khalifa will remain as deputy PM but lose the
Islamic Affairs portfolio.


7. (SBU) The Ministries of Information and Cabinet Affairs
will be dissolved. There has been discussion for some time
about breaking the Ministry of Information into its component
parts and establishing them as government agencies or
government-owned companies. The Ministry will operate for
the time being under the General Organization for Youth and
Sport (GOYS),though there is no indication GOYS will be a
permanent home. There has been no comment on the fate of
current employees of the Ministry of Cabinet Affairs, but its
functions could be folded into the Prime Ministry.

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Mergers, Acquisitions, and Splits
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8. (SBU) A number of ministries would merge or split. The
Ministries of Industry and Commerce will be consolidated
under current Minister of Industry Hassan Fakhro. The
Ministries of Justice and Religious Affairs will be merged
into one, and so returned to the status quo ante of two years
ago when there was just one ministry. The Ministry of
Electricity and Water will acquire the Ministry of Oil, and
current Minister of Electricity and Water Shaikh Abdulla bin
Salman Al Khalifa will be head of the larger ministry. The
Public Works portfolio will be split off from the Ministry of
Housing and Public Works and folded into a new Ministry of
Public Works and Tenders under current Minister of State for
Tenders Abdul Hussein Mirza. The Ministry of Labor and
Social Affairs will be split, with current Minister Majid Al
Alawi staying on as Minister of Labor and Fatima Al Belooshi
becoming Minister of Social Affairs.


9. (SBU) The two current deputy prime ministers, Shaikh
Abdulla bin Khalid and Deputy PM and Foreign Minister Shaikh
Mohammed bin Mubarak Al Khalifa, will retain their positions.
They will be joined by current Minister of Justice Jawad Al
Arrayed, who will lose the Justice portfolio, and current
Minister of Transportation Shaikh Ali bin Khalifa Al Khalifa,
who will be both deputy PM and Transport minister. (Note:
Shaikh Ali is PM Khalifa's son. End Note.)

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Comment
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10. (C) Keeping in mind that at this moment all the
ministerial moves are press speculation, it appears that the
PM comes out the loser. Of the five rumored to be leaving
the cabinet, three are Shaikh Khalifa's men: Mutawwa, Saif,
and Shoala. Cabinet newcomer BMA Governor Shaikh Ahmed is
known to be very close to Crown Prince Salman (and,
therefore, King Hamad). Of those who have bolstered their
portfolios, Fakhro and Mirza also are in the King and Crown
Prince's camp. Sitry, a Shia, has ties with the Shia bloc
inside the lower house of parliament, the Council of
Representatives, a group the King is seeking to encourage for
having defied Shia calls for boycotting the 2002
parliamentary elections. Kicking Minister of Justice Jawad
Al Arrayed upstairs to be deputy PM would be a loss for us:
he is a reformer who led the GOB delegation on the
USG-supported Southern Methodist University "Rule of Law"
program in the U.S. in September 2004. Knowing he was being
squeezed, the PM may have agreed to the changes on one
condition: that his son, Shaikh Ali, be made deputy PM in
addition to being Minister of Transportation. The PM had
worked for years to appoint Shaikh Ali Minister of Interior,
but these hopes were dashed when the King engineered the
appointment of Shaikh Rashed last spring. If the cabinet
shuffle plays out as described in the press, PM Khalifa will
find himself with fewer friends and bases of support at the
cabinet table.

MONROE