Identifier
Created
Classification
Origin
07KUWAIT1412
2007-09-19 11:54:00
CONFIDENTIAL
Embassy Kuwait
Cable title:
NATIONAL BANK NOT OPTIMISTIC ABOUT PROSPECTS OF
how-toVZCZCXRO1894 PP RUEHDE RUEHDIR DE RUEHKU #1412 2621154 ZNY CCCCC ZZH P 191154Z SEP 07 FM AMEMBASSY KUWAIT TO RUEHC/SECSTATE WASHDC PRIORITY 9966 INFO RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE PRIORITY RUEHLO/AMEMBASSY LONDON PRIORITY 1428 RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
C O N F I D E N T I A L KUWAIT 001412
SIPDIS
SIPDIS
STATE FOR NEA/ARP
LONDON FOR TSOU
USTR FOR JBUNTIN
E.O. 12958: DECL: 09/17/2017
TAGS: ECON KU
SUBJECT: NATIONAL BANK NOT OPTIMISTIC ABOUT PROSPECTS OF
GCC MONETARY UNION
Classified By: Charge d'Affaires Alan G. Misenheimer for reasons 1.4(b)
and (d)
C O N F I D E N T I A L KUWAIT 001412
SIPDIS
SIPDIS
STATE FOR NEA/ARP
LONDON FOR TSOU
USTR FOR JBUNTIN
E.O. 12958: DECL: 09/17/2017
TAGS: ECON KU
SUBJECT: NATIONAL BANK NOT OPTIMISTIC ABOUT PROSPECTS OF
GCC MONETARY UNION
Classified By: Charge d'Affaires Alan G. Misenheimer for reasons 1.4(b)
and (d)
1. (SBU) In a September 16 courtesy call with the National
Bank of Kuwait (NBK),CDA met with Bank CEO Ibrahim Dabdoub
and Chief Economist Randa Azar-Khoury. (NBK is the largest
bank in Kuwait and the fifth largest Arab Bank with 2006 net
profits of USD 875.8 million and USD 27.32 billion in assets.
Dabdoub has been CEO of NBK since 1983 and has been with the
Bank since 1961. Dabdoub and Azar-Khoury are highly
respected economists and leaders in the Kuwaiti financial
sector).
2. (SBU) Azar-Khoury said that she does not believe a GCC
monetary union is possible by 2010. She clarified that even
if a single currency is introduced in the GCC, an integrated
monetary system is not realistic anytime soon. She told CDA
that none of the GCC countries is prepared for a large-scale
change. In Kuwait there are no plans to implement new
systems to accommodate a currency change let alone an overall
integration of Kuwait's monetary system with the rest of the
GCC. She added that there are currently no plans in place to
harmonize or coordinate monetary policy within the GCC. She
also pointed out that significant barriers to doing business
within the GCC still exist in all countries. She cited
problems faced by NBK in trying to open branches in Saudi
Arabia and Dubai as examples of barriers to intra-GCC
business. She suggested that the approach to regulating
capital markets also varies significantly between the
countries. She was not optimistic about meaningful
integration on monetary policy in the near future even if a
single currency becomes a reality.
3. (C) Azar-Khoury and Dabdoub expressed concerns over the
lack of commercial and financial reforms in Kuwait. Dabdoub
pointed out that the Kuwait National Assembly has not passed
any commercial or financial legislation in the past two
years. He pointed to growing Islamist influence in the
National Assembly as the primary reason for lack of
meaningful reforms in relevant sectors. Echoing comments we
often hear from candid GOK contacts, Dabdoub lamented the
drift and indecisiveness of the senior GOK leadership as a
major spur to irresponsible criticism by opposition elements.
********************************************* *
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/
********************************************* *
MISENHEIMER
SIPDIS
SIPDIS
STATE FOR NEA/ARP
LONDON FOR TSOU
USTR FOR JBUNTIN
E.O. 12958: DECL: 09/17/2017
TAGS: ECON KU
SUBJECT: NATIONAL BANK NOT OPTIMISTIC ABOUT PROSPECTS OF
GCC MONETARY UNION
Classified By: Charge d'Affaires Alan G. Misenheimer for reasons 1.4(b)
and (d)
1. (SBU) In a September 16 courtesy call with the National
Bank of Kuwait (NBK),CDA met with Bank CEO Ibrahim Dabdoub
and Chief Economist Randa Azar-Khoury. (NBK is the largest
bank in Kuwait and the fifth largest Arab Bank with 2006 net
profits of USD 875.8 million and USD 27.32 billion in assets.
Dabdoub has been CEO of NBK since 1983 and has been with the
Bank since 1961. Dabdoub and Azar-Khoury are highly
respected economists and leaders in the Kuwaiti financial
sector).
2. (SBU) Azar-Khoury said that she does not believe a GCC
monetary union is possible by 2010. She clarified that even
if a single currency is introduced in the GCC, an integrated
monetary system is not realistic anytime soon. She told CDA
that none of the GCC countries is prepared for a large-scale
change. In Kuwait there are no plans to implement new
systems to accommodate a currency change let alone an overall
integration of Kuwait's monetary system with the rest of the
GCC. She added that there are currently no plans in place to
harmonize or coordinate monetary policy within the GCC. She
also pointed out that significant barriers to doing business
within the GCC still exist in all countries. She cited
problems faced by NBK in trying to open branches in Saudi
Arabia and Dubai as examples of barriers to intra-GCC
business. She suggested that the approach to regulating
capital markets also varies significantly between the
countries. She was not optimistic about meaningful
integration on monetary policy in the near future even if a
single currency becomes a reality.
3. (C) Azar-Khoury and Dabdoub expressed concerns over the
lack of commercial and financial reforms in Kuwait. Dabdoub
pointed out that the Kuwait National Assembly has not passed
any commercial or financial legislation in the past two
years. He pointed to growing Islamist influence in the
National Assembly as the primary reason for lack of
meaningful reforms in relevant sectors. Echoing comments we
often hear from candid GOK contacts, Dabdoub lamented the
drift and indecisiveness of the senior GOK leadership as a
major spur to irresponsible criticism by opposition elements.
********************************************* *
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/
********************************************* *
MISENHEIMER