ON A FALCON'S WING: THE EMIR OF KUWAIT VISITS MONGOLIA

UNCLAS SECTION 01 OF 02 ULAANBAATAR 000454

SIPDIS

SENSITIVE
SIPDIS

STATE PASS TO EAP/CM, NEA/ARP, AND CA/OCS
STATE PASS USAID FOR ANE FOR D. WINSTON
DOC FOR ITA AND ZHEN GONG CROSS
TREASURY FOR TT YANG
BANGKOK AND MANILA FOR AID
LONDON AND MANILA FOR USEDS TO EBRD, ADB

E.O. 12958: N/A
TAGS: EAID PREL EINV ECON PGOV MG KU
SUBJECT: ON A FALCON'S WING: THE EMIR OF KUWAIT VISITS MONGOLIA

SENSITIVE BUT UNCLASSIFIED - NOT FOR INTERNET DISTRIBUTION


1. (SBU) SUMMARY. The Emir of Kuwait met with senior Mongolian
officials regarding trade, cultural, and security affairs, before
taking a vacation in the Mongolian countryside. Although the
Mongolian-Kuwait bilateral trade relationship remains minuscule,
mostly trade in falcons, Kuwait has provided or committed to provide
nearly US$30 million in aid to Mongolia in the form of grants and
soft loans for infrastructure and construction projects. END
SUMMARY.

Emir's Official and Ceremonial Meetings
--------------


2. (SBU) The Emir of Kuwait, Sheikh Al-Ahmad Al-Jabar Al-Sabah, paid
a state visit to Mongolia on July 30, 2007, before taking off for
short holiday in the Mongolian country-side from July 31 thru August

3. The Emir held a day's worth of meetings with the Ministers of
Trade and Industry, Foreign Affairs, and Finance, as well as
Mongolian President N. Enkhbayar. After these meetings, the Emir
laid a wreath at the base of Mongolia's revolutionary hero,
Sukhbaatar, and paid his respects at the recently completed monument
to Chinggis Khaan and his family. (Note: In 1258, Chinggis Khaan's
grandson, Khulagu Khan, obliterated the Abbasid Caliphate and
leveled Baghdad, ending the Islamic Golden Age.)


3. (SBU) Mongolian news reports and our official contacts did not
report on the Emir's countryside progress. However, an Israeli
distributor of Speed-Queen washers and dryers reported to Commoff
that her firm had been contracted to provide industrial size laundry
equipment for the washing needs of the Emir and his entourage, who
had commissioned a series of palatial gers (felt tents or yurts, in
Russian) for the Emir's visit.

Mongolia With Kuwait Against Iraq; Bond of Falcons
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4. (SBU) Mongolia and Kuwait established diplomatic relations in
1975 but relations remained inert until 1990. Two factors caused an
up-tick. First, Mongolia lent "moral" support to Kuwait during the
Iraqi invasion, raising Mongolia's profile before the Kuwaitis.
Second, by the early 1990's Mongolia had become (and remains) a
prime source of hunting falcons for Kuwait and other Gulf States.
(Note: The current export price for a Mongolian falcon, a GOM-run
monopoly, hovers around US$7,000, with some 40-50 birds being
exported each year.)

Agreements Signed But Details Thin
--------------


5. (SBU) During the July 30 sessions, Kuwait and Mongolia signed
agreements to facilitate intergovernmental relations, agriculture,
trade, culture, education, and technology. However, details on what
sort of trade, cultural, and technology would be included in these
agreements are thin on the ground. (Comment: The actual level of
trade between Mongolia and Kuwait remains extremely small - perhaps
no more than US$350,000 for the falcons; and so, for all the talk of
trade, neither the Kuwaitis nor the Mongolians could nor would
provide much detail on what sort of items, beyond falcons, would
become mainstays of a robust trade relationship. Mongolia has
sought to export halal meats processed by its western Muslim Kazakh
minority but has yet to overcome transportation and
refrigeration/sanitation requirements.)

Of Trade and Aid
--------------


6. (SBU) Although trade volumes remain low, Kuwait has provided both

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soft loans and grants to the GOM. Loans of approximately US$20
million have covered the cost of a hydroelectric plant in western
Mongolia and for new paved roads in central Mongolia. To our
knowledge, the Kuwaitis funded these projects without conducting
much due diligence into the actual need for them; rather they simply
responded to GOM requests. In addition to the loans, Kuwait has
granted the GOM US$12 million to for a new building to house
Mongolia's Parliament. (Note: Before the Emir's visit, Mongolian
officials, according to several press reports, had begun to opine
that the US$12 million was insufficient to build a new parliament;
and so, reportedly seem to have struck some deal with the Government
of Turkey to fund the rest of the construction.)


7. (SBU) In addition, Kuwait and Mongolia agreed to deepen
cooperation between the two nations within United Nations frameworks
and those of other international organizations, especially those
committed to enhancing security in the Asia Pacific region. Kuwait
also offered to provide support for a falcon breeding program and
for assisting Mongolia to combat such natural disasters as severe
winters and drought. (Note: One wag wondered if Mongolia would be in
a better position to advise Kuwait on severe winters, but agreed
that Kuwait certainly cornered the market on droughts.)

Minton