KUWAITI PARTICIPATION IN PARIS DONORS CONFERENCE

C O N F I D E N T I A L SECTION 01 OF 02 KUWAIT 001718 SIPDIS SIPDIS STATE FOR NEA/IPA (BELGRADE) AND EEB/IFD/ODF (DEMARCELLUS) E.O. 12958: DECL: 12/11/2017 TAGS: EAID KPAL KWBG PGOV PREL IS KU SUBJECT: KUWAITI PARTICIPATION IN PARIS DONORS CONFERENCE REF: STATE 163955 Classified By: CDA Alan Misenheimer for reasons 1.4 (b) and (d) ¶1. (C) Summary: CDA and emboffs delivered reftel points to the Arab Fund and various GOK interlocutors in the Amiri Diwan, Ministry of Foreign Affairs (MFA),and the Kuwait Fund. MFA confirmed that Foreign Minister Shaykh Dr. Mohammed Al Sabah will lead the Kuwaiti delegation to Paris but said the amount of Kuwait,s contribution has not yet been decided. The Arab Fund will send "a senior official" and also has not yet determined the size of its pledge but estimates that it might be about USD 40-50 million per year. Officials at the Arab Fund, Kuwait Fund, and MFA all expressed surprise at the size of the USG pledge. Based on the British Ambassador's readout of Tony Blair's December 10 meeting with the Amir and Prime Minister, Blair's demarche was general and did not ask the Kuwaitis to pledge a specific amount. End Summary. GOK supportive but undecided on amount -------------- ¶2. (C) On December 11, CDA met with the Minister of Amiri Diwan Affairs and son of the Amir, Shaykh Nasser Sabah Al-Ahmed Al Sabah. CDA expressed disappointment that Kuwait did not participate in the November 27 Annapolis conference and asked that Kuwait pledge a substantial amount of support at the conference, in the neighborhood of USD 500 million and in any case above the USD 400 million level. Shaykh Nasser said that Kuwait supported the Annapolis conference and appeared receptive to the size of donation requested. (NOTE: In a separate conversation on December 11, the French Ambassador told CDA that he would have two high-level meetings with Kuwaiti interlocutors and would pass along a parallel message. END NOTE) ¶3. (C) MFA's Arab World Department Counselor Faisal Al-Modhahka told poloff on December 10 that Kuwaiti Foreign Minister Shaykh Dr. Mohammed Al Sabah will attend the conference but the amount Kuwait will pledge is still unknown. Al-Mudhahka did point out that between 2000 - 2007 Kuwait has allocated USD 385 million to the Palestinians. ¶4. (C) On December 12, Director of the Kuwait Fund,s Arab Countries Office Marwan Al-Ghanem told econoff that he had been instructed by the MFA to decline the invitation that the Fund had received from the French Government to attend the Paris Conference. He said he did not know why the MFA had given this instruction but explained that legally the Fund is only able to provide loans and not grants to the PA because Palestine is not a state. Al-Ghanem said a grant from the Fund to the PA would require a decision from the Kuwaiti Cabinet Council. He added that the Fund does not normally assign its staff to "conflict areas" including Iraq, Afghanistan, and the Palestinian territories. He did not rule out that the GOK might provide funding directly to the PA without going through the Kuwait fund. Al-Ghanem expressed surprise at the size of the USG pledge. ¶5. (C) Later on December 12, MFA,s Economic Department Director Shaykh Ali Khaled Al Sabah confirmed to econoff that the Foreign Minister would attend and that the GOK would make a pledge. He said that the GCC governments were currently engaged in conversations to determine what each country,s pledge would be. Arab Fund will attend; Undecided on Amount -------------- ¶6. (C) On December 11, Arab Fund Director General Abdullatif Al-Hamad told econoff that the Fund would send a "senior official" to Paris, but the amount to be pledged has not yet been decided by the Fund,s Board, which is comprised of officials from each of the member countries. Al-Hamad, did say, however, that he expected the amount to be in line with the Fund,s trend over the last four years to support the Palestinians with 10 per cent of the Fund,s revenue. This amounts to USD 40-50 million per year. Al-Hamad complained that it was counterproductive to organize the conference on such short notice without giving potential donors enough time to prepare. He also criticized PM Fayyad,s USD 5.6 billion Palestinian Reform and Development Plan as "unrealistic," saying, "Fayyad is very competent but Abbas inflated his figures." He reminded econoff that the Arab Fund has cumulatively donated $330 million to the Palestinians since ¶1977. He expressed surprise that the USG was pledging such a large amount. Read-out from Blair,s meeting with Amir, PM KUWAIT 00001718 002 OF 002 -------------- ¶7. (C) In a separate meeting with EU ambassadors, British Ambassador Stuart Laing gave a briefing on Tony Blair's December 10 meetings with Amir Shaykh Sabah Al-Ahmad Al-Jaber Al Sabah and Prime Minister Shaykh Nasser Mohammed Al-Ahmed Al Sabah. Blair also met separately with the Crown Prince, which is unusual. According to Laing, Blair presented the three-year development plan approved by both the World Bank and the International Monetary Fund. The plan calls for a total of USD 5.6 billion. Blair told the Kuwaitis that the USG was pledging USD 500 million, the EU USD 600 million, the UK USD 500 million, and Canada USD 300 million. He said he was seeking USD 800 million from the Arab region, but apparently left it to the Arabs to work out their specific pledges. (Comment: We share the French Ambassador's surprise and dismay that Blair did not come with a specific request for the GOK. End Comment.) ¶8. (C) According to the UK Ambassador's report, the Amir stressed the difficulty of the situation due to the split between Hamas and Fatah. The Amir was evasive with regard to the amount that Kuwait would pledge at the Paris Conference and said that Kuwait would make its donation through the Arab Fund. He also stated that Kuwait was already generously supporting the Palestinian Authority, adding that Kuwait's last payment was USD 30 million. Laing opined that the Amir did not appear to understand that the funds received at the Paris Conference would be separate from funds already going to the Palestinian Authority for operating expenses. ¶9. (C) During his meeting with Blair, the Prime Minister also said Palestinian factionalism is a difficult obstacle to overcome. He agreed that Palestinian Prime Minister Salam Fayyad is not corrupt and the GOK would like to support him, but added that they consider him weak and perceive that the mood of the Palestinians is overwhelmingly pessimistic. The Prime Minister commented that the Paris Conference should not become another Oslo, "a pledging process that disappears into the sand." ********************************************* * 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