RE-APPOINTED KUWAITI FINANCE MINISTER OPTIMISTIC

C O N F I D E N T I A L SECTION 01 OF 02 KUWAIT 000587

SIPDIS

SIPDIS

DEPARTMENT NEA/ARPI

E.O. 12958: DECL: 02/20/2016
TAGS: ECON EFIN PTER PGOV PREL IZ XF KU KTFN
SUBJECT: RE-APPOINTED KUWAITI FINANCE MINISTER OPTIMISTIC
ABOUT PROGRESS UNDER NEW AMIR

REF: 05 KUWAIT 4672

Classified By: Ambassador Richard LeBaron. Reasons 1.4 (b) and (d)


1. (C) Begin Summary: During a February 20 meeting with the
Ambassador, re-appointed Finance Minister Bader Al-Humaidhi
expressed confidence in the pace of reforms and governance
under the new Amir, Crown Prince and Prime Minister. He
predicted overall support from the National Assembly for GOK
initiatives, including the press and publication law and the
proposal to reduce the corporate foreign tax rate. He does
not anticipate similar progress in this legislative session
(ends in four months) on electoral reform or overall tax
reform. He pointed to ongoing efforts by the Central Bank to
revise the existing anti-money laundering (AML) law, welcomed
forthcoming USG information on Kuwait-based charity, Revival
of the Islamic Heritage Society, and reported no progress or
contact with Iraqi officials on Iraqi debt relief. End
Summary


2. (C) On February 20, Ambassador met with Finance Minister
Bader Al-Humaidhi to congratulate him on his re-appointment
to the cabinet following the formation of the Kuwaiti
government under Prime Minister Shaykh Nasser Mohammed
Al-Ahmed Al-Sabah.


Kuwait's Democracy At Work
--------------


3. (C) Praising the recent succession as testimony to
Kuwait's stable democracy, Al-Humaidhi commented that the
ruling family's internal political debates on succession and
governance although not fully resolved, were "now under
control" with the appointment of the new Amir, Crown Prince
and Prime Minister. Referring to the drawn-out succession
debates among ruling family members, Al-Humaidhi noted that
Amir Shaykh Sabah's decision to quickly nominate a Crown
Prince and Prime Minister was an important political lesson
aimed at preventing a future succession crisis.


4. (C) Al-Humaidhi, a self-declared optimist, expressed
confidence in the new Prime Minister (Amir's nephew),Shaykh
Nasser Mohammed Al-Sabah's commitment to the job, commenting
that the new PM is "very active, very open, and very
practical" when it comes to implementing GOK priorities.
Although Al-Humaidhi acknowledged the possibility of isolated
National Assembly (NA) opposition, he discounted the
possibility of widespread parliamentary contention with the
new government, commenting that most NA members "will seek
harmony" as the legislative season draws to a close (in four
months) and members begin gearing up for next year's
parliamentary elections.

Legal Reforms, Terror Finance, Iraq Debt
--------------


5. (C) The Minister, pointing to the remaining four months
of the current legislative session, expressed confidence in
the passage of the press and publication law, and pointed to
expected Council of Ministers (cabinet) approval of the
Public Private Partnership initiative impacting Build Operate
Transfer (BOT) and similar mechanisms. However, he was less
optimistic about electoral reforms. Government pressure will
be key to overcoming an anticipated split in the NA over
electoral reform, he added. (Note: He also predicts a
similar split within the GOK on the issue.)


6. (C) On taxation, Al-Humaidhi said the Ministry's proposal
to cut the foreign corporate tax rate had cleared the
National Assembly's Economic and Finance Committee and was
now pending the approval of the General Assembly. The
Ambassador reiterated USG concerns with the GOK's
discriminatory taxation, citing continued complaints from
U.S. companies. Al-Humaidhi, sounding more conciliatory,
noted that the GOK "was pushing hard" to address the issue,
recognizing that it is "hurting us" with investors. However,
he added that the GOK's separate comprehensive tax reform
bill was still under review by the Ministry and would be
presented to the Council of Ministers in April or May.


7. (C) On terrorist financing, Ambassador conveyed USG
concerns with the Kuwaiti-based charity, Revival of the
Islamic Heritage Society (RIHS),and informed Al-Humaidhi
that information available to the USG on RIHS support to
Islamic extremists as well as information on certain
individuals had been shared with the Kuwaiti Embassy in
Washington with plans for similar distribution to appropriate

KUWAIT 00000587 002 OF 002


GOK ministries. Al-Humaidhi welcomed the USG's willingness
to provide additional information on suspected charities. On
the pending GOK revision to the 2002 AML law, Al-Humaidhi
noted that the Central Bank was shepherding the process
through to conclusion.


8. (C) When asked about Iraq debt relief, Al-Humaidhi
reported that there had been no progress or contact with
Iraqi officials on the matter, noting again (see reftel) that
it was a sensitive political matter in Kuwait. He pointed to
similar inquiries from the French government, in their Paris
Club capacity.

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For more reporting from Embassy Kuwait, visit:
http://www.state.sgov.gov/p/nea/kuwait/?cable s

Visit Kuwait's Classified Website:
http://www.state.sgov.gov/p/nea/kuwait/
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LEBARON