Identifier
Created
Classification
Origin
08KUWAIT1190
2008-12-10 05:57:00
UNCLASSIFIED
Embassy Kuwait
Cable title:
ARAB FUND AND KUWAIT FUND RECIPROCATE USAID
how-toVZCZCXRO2471 PP RUEHBC RUEHDE RUEHKUK RUEHROV DE RUEHKU #1190/01 3450557 ZNR UUUUU ZZH P 100557Z DEC 08 FM AMEMBASSY KUWAIT TO RUEHC/SECSTATE WASHDC PRIORITY 2456 INFO RUEHEE/ARAB LEAGUE COLLECTIVE PRIORITY
UNCLAS SECTION 01 OF 02 KUWAIT 001190
SIPDIS
NEA/ARP SAWYER
E.O. 12958: N/A
TAGS: EAID PREL KU
SUBJECT: ARAB FUND AND KUWAIT FUND RECIPROCATE USAID
INTEREST IN COLLABORATION
UNCLAS SECTION 01 OF 02 KUWAIT 001190
SIPDIS
NEA/ARP SAWYER
E.O. 12958: N/A
TAGS: EAID PREL KU
SUBJECT: ARAB FUND AND KUWAIT FUND RECIPROCATE USAID
INTEREST IN COLLABORATION
1. (SBU) Summary. the Directors General of two of the major
development funds in the Middle East, the Kuwait Fund for
Arab Economic Development(KFAED) and the Arab Fund for
Economic and Social Development(AFESD),met separately with
U.S. Agency for International Development Administrator and
U.S. Department of State Director of Foreign Assistance
Henrietta Fore on December 2 and expressed interest in
coordination and cooperation on future development projects
both inside and outside the Middle East. The two directors
also discussed ongoing projects in a number of countries in
the context of identifying the character that such
cooperation might take.
End summary.
Kuwait Fund
--------------
2. (SBU) Director General of the Kuwait Fund Abdul Wahab
Al-Bader opened the December 2 meeting with Administrator
Fore by noting that U.S. AID and the Kuwait Fund had mutual
interests in many countries and expressing a wish to discuss
common interests and the possibility of cooperation. In
response to Ms. Fore's inquiry as to how AID might best
cooperate on projects with the Kuwait Fund, Bader said the
Kuwait Fund prefers funding infrastructure projects but also
supports social, health and education projects in some
countries. Ms. Fore said that following the Monterey
Consensus, AID tries to work with recipient countries'
priorities and focuses its efforts on people-oriented
programs such as skills building through training and
exchange programs. Ms. Fore noted that the Kuwait Fund focus
on infrastructure and AID's focus on skills building might
provide opportunities for cooperation. Bader discussed Fund
activities in several countries of mutual interest and three
items were identified for follow-up.
3. (SBU) Bader said the Kuwait Fund was interested in funding
projects in Afghanistan but was barred by its charter from
doing so because Afghanistan was in arrears on a project from
many years earlier. He said Kuwait Fund efforts to fund a
project four years ago failed because the GOA refused to sign
an agreement stating that some of the funding would be used
to repay part of the arrearages. Bader said the GOA refused
despite assurances from the Fund that it would not insist on
actual payment; that it simply needed the signed commitment
to satisfy internal institutional demands. He said he had
sought, unsuccessfully, to finalize the agreement with PM
Karzai, as well as with the Afghan Minister of Finance. Ms.
Fore recommended Bader try to work with Afghan Foreign
Minister Rangin Dadfar Spanta who she characterized as an
Afghan official who "made decisions."
4. (SBU) Bader said the Kuwait Fund had been very involved in
education projects in Yemen from the 60's to the 80's but had
stopped activities since 1990. He said currently the highest
priority for Yemen was social projects. He said the Fund was
taking a long view of Yemen's employment problems and had
approved a project for the construction of a college. Ms.
Fore said that technical assistance was available for
capacity building in universities and ASKED that Bader inform
AID if he "saw and openings for us."
5. (SBU) Bader said the Kuwait Fund had administered 50
projects worth $185 million in Lebanon including a partially
completed highway project in Lebanon and a project for
replacing destroyed houses which had funded replacement of
10,000 houses. Bader and Fore agreed to put their respective
Mission Directors in Lebanon in contact with each other to
discuss possible areas of coordination and cooperation.
6. (SBU) Bader said the Kuwait Fund could do 1-2 projects per
year in Pakistan but its activities had been severely
hampered by the many changes in government and further
compromised by heightened concerns arising out of the attacks
in Mumbai, which caused the Fund to delay a planned agreement
in December. He said health, education and social projects
in Pakistan were of interest to the Fund but that the GOP had
set a hydro-electric project as its priority. Ms. Fore said
that AID had many health and education projects in Pakistan
and that it worked with the Aga Khan Foundation.
Arab Fund
--------------
7. (SBU) Arab Fund Chairman and Director General Abdul Latif
Yousef Al-Hamad noted in opening comments to Ms. Fore during
their December 2 meeting that the Arab Fund had current
funding of 683 million Kuwaiti Dinars(KD) ($2.5 billion) and
KUWAIT 00001190 002 OF 002
had administered a total of KD6.5 billion ($24 billion) worth
of projects during its history. He said that the Arab Fund
used concessionary loans as its primary method of funding
projects and highlighted its commitment to strict adherence
to repayment obligations by recipients. In response to Ms.
Fore's question about the Fund's comparative advantages,
Hamad said its strengths were its speed of action, knowledge
of the region and its ability to speak bluntly to recipients
when necessary. He noted that the Fund's project priorities
focused on infrastructure with its portfolio allocated as
follows: 40% on energy, 30% on roads, 20% on water projects
and 10% on health, rural development and social projects.
8. (SBU) In discussing how AID and the Arab Fund might work
together on development projects, he observed that the Fund
had collaborated with the World Bank, the African Development
Bank, the Islamic Development Bank and the European
Development Bank. He added that they had worked with AID in
the 70's and that it was a relationship worth renewing. With
regard to how coordination could be fostered and what form
the cooperation might take, Hamad said that contacts between
the two agencies should be maintained and that he would love
to collaborate "in the gaps" between what the Fund did and
what AID did.
9. (SBU) Hamad said the Arab Fund always voted 10% of its
annual net income to go to NGOs in Gaza and the West Bank.
He said that the Fund had avoided dealings with the
governments of Yassir Arafat but that now it had to deal with
the Palestinian government. He said it was particularly
difficult to work in Gaza and that great care had to be taken
with the distribution of funding. He said the Fund was now
working effectively in the West Bank and described a project
that had paid the tuition of 100,000 college students in the
West Bank during a period of extreme economic hardship.
Hamad said the problem with Palestine was that the Fund
couldn't give more loans and must do grants. He stressed
that they did not do budget support. Ms. Fore said that AID
was focusing on starting public-private partnerships in the
West Bank aimed at increasing funding and development of
businesses.
10. (SBU) Hamad gave a brief review of the Arab Fund's
current projects by responding to Ms. Fore's question about
Fund activities in Darfur. He said that two years ago $10
million had been committed toward the construction of wells.
Re: Lebanon, Ms. Fore asked about Fund interest in
U.S.-Kuwait collaboration. Hamad responded "absolutely,"
citing current water and electricity generation projects.
Ms. Fore said that, in Yemen, the U.S. would like to focus on
education projects. Mr. Hamad recommended that AID work with
the Yemen Social Fund, which he described as the best run in
the region, and the Fund for Social Works. He said a main
constraint for the Fund's activities in Yemen was it did only
a limited amount of grant funding. He said that the
electricity grid in Yemen covers only 30% of the population
and that if the U.S. could provide grants, the Fund might be
able to co-finance a project to expand the electricity grid.
11. (SBU) Concerning project assistance to Iraq, Hamad said
that Iraq is technically a non-functioning member because it
has been in default since 1990 over approximately USD 50
million owed to the fund, and that it does not participate in
meetings or activities. He said though the amount owed is
relatively small, the principle of all members adhering to
the Arab Fund's standards is important.
12. (U) This cable was cleared by U.S. AID Administrator
Henrietta Fore.
********************************************* *
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
NEA/ARP SAWYER
E.O. 12958: N/A
TAGS: EAID PREL KU
SUBJECT: ARAB FUND AND KUWAIT FUND RECIPROCATE USAID
INTEREST IN COLLABORATION
1. (SBU) Summary. the Directors General of two of the major
development funds in the Middle East, the Kuwait Fund for
Arab Economic Development(KFAED) and the Arab Fund for
Economic and Social Development(AFESD),met separately with
U.S. Agency for International Development Administrator and
U.S. Department of State Director of Foreign Assistance
Henrietta Fore on December 2 and expressed interest in
coordination and cooperation on future development projects
both inside and outside the Middle East. The two directors
also discussed ongoing projects in a number of countries in
the context of identifying the character that such
cooperation might take.
End summary.
Kuwait Fund
--------------
2. (SBU) Director General of the Kuwait Fund Abdul Wahab
Al-Bader opened the December 2 meeting with Administrator
Fore by noting that U.S. AID and the Kuwait Fund had mutual
interests in many countries and expressing a wish to discuss
common interests and the possibility of cooperation. In
response to Ms. Fore's inquiry as to how AID might best
cooperate on projects with the Kuwait Fund, Bader said the
Kuwait Fund prefers funding infrastructure projects but also
supports social, health and education projects in some
countries. Ms. Fore said that following the Monterey
Consensus, AID tries to work with recipient countries'
priorities and focuses its efforts on people-oriented
programs such as skills building through training and
exchange programs. Ms. Fore noted that the Kuwait Fund focus
on infrastructure and AID's focus on skills building might
provide opportunities for cooperation. Bader discussed Fund
activities in several countries of mutual interest and three
items were identified for follow-up.
3. (SBU) Bader said the Kuwait Fund was interested in funding
projects in Afghanistan but was barred by its charter from
doing so because Afghanistan was in arrears on a project from
many years earlier. He said Kuwait Fund efforts to fund a
project four years ago failed because the GOA refused to sign
an agreement stating that some of the funding would be used
to repay part of the arrearages. Bader said the GOA refused
despite assurances from the Fund that it would not insist on
actual payment; that it simply needed the signed commitment
to satisfy internal institutional demands. He said he had
sought, unsuccessfully, to finalize the agreement with PM
Karzai, as well as with the Afghan Minister of Finance. Ms.
Fore recommended Bader try to work with Afghan Foreign
Minister Rangin Dadfar Spanta who she characterized as an
Afghan official who "made decisions."
4. (SBU) Bader said the Kuwait Fund had been very involved in
education projects in Yemen from the 60's to the 80's but had
stopped activities since 1990. He said currently the highest
priority for Yemen was social projects. He said the Fund was
taking a long view of Yemen's employment problems and had
approved a project for the construction of a college. Ms.
Fore said that technical assistance was available for
capacity building in universities and ASKED that Bader inform
AID if he "saw and openings for us."
5. (SBU) Bader said the Kuwait Fund had administered 50
projects worth $185 million in Lebanon including a partially
completed highway project in Lebanon and a project for
replacing destroyed houses which had funded replacement of
10,000 houses. Bader and Fore agreed to put their respective
Mission Directors in Lebanon in contact with each other to
discuss possible areas of coordination and cooperation.
6. (SBU) Bader said the Kuwait Fund could do 1-2 projects per
year in Pakistan but its activities had been severely
hampered by the many changes in government and further
compromised by heightened concerns arising out of the attacks
in Mumbai, which caused the Fund to delay a planned agreement
in December. He said health, education and social projects
in Pakistan were of interest to the Fund but that the GOP had
set a hydro-electric project as its priority. Ms. Fore said
that AID had many health and education projects in Pakistan
and that it worked with the Aga Khan Foundation.
Arab Fund
--------------
7. (SBU) Arab Fund Chairman and Director General Abdul Latif
Yousef Al-Hamad noted in opening comments to Ms. Fore during
their December 2 meeting that the Arab Fund had current
funding of 683 million Kuwaiti Dinars(KD) ($2.5 billion) and
KUWAIT 00001190 002 OF 002
had administered a total of KD6.5 billion ($24 billion) worth
of projects during its history. He said that the Arab Fund
used concessionary loans as its primary method of funding
projects and highlighted its commitment to strict adherence
to repayment obligations by recipients. In response to Ms.
Fore's question about the Fund's comparative advantages,
Hamad said its strengths were its speed of action, knowledge
of the region and its ability to speak bluntly to recipients
when necessary. He noted that the Fund's project priorities
focused on infrastructure with its portfolio allocated as
follows: 40% on energy, 30% on roads, 20% on water projects
and 10% on health, rural development and social projects.
8. (SBU) In discussing how AID and the Arab Fund might work
together on development projects, he observed that the Fund
had collaborated with the World Bank, the African Development
Bank, the Islamic Development Bank and the European
Development Bank. He added that they had worked with AID in
the 70's and that it was a relationship worth renewing. With
regard to how coordination could be fostered and what form
the cooperation might take, Hamad said that contacts between
the two agencies should be maintained and that he would love
to collaborate "in the gaps" between what the Fund did and
what AID did.
9. (SBU) Hamad said the Arab Fund always voted 10% of its
annual net income to go to NGOs in Gaza and the West Bank.
He said that the Fund had avoided dealings with the
governments of Yassir Arafat but that now it had to deal with
the Palestinian government. He said it was particularly
difficult to work in Gaza and that great care had to be taken
with the distribution of funding. He said the Fund was now
working effectively in the West Bank and described a project
that had paid the tuition of 100,000 college students in the
West Bank during a period of extreme economic hardship.
Hamad said the problem with Palestine was that the Fund
couldn't give more loans and must do grants. He stressed
that they did not do budget support. Ms. Fore said that AID
was focusing on starting public-private partnerships in the
West Bank aimed at increasing funding and development of
businesses.
10. (SBU) Hamad gave a brief review of the Arab Fund's
current projects by responding to Ms. Fore's question about
Fund activities in Darfur. He said that two years ago $10
million had been committed toward the construction of wells.
Re: Lebanon, Ms. Fore asked about Fund interest in
U.S.-Kuwait collaboration. Hamad responded "absolutely,"
citing current water and electricity generation projects.
Ms. Fore said that, in Yemen, the U.S. would like to focus on
education projects. Mr. Hamad recommended that AID work with
the Yemen Social Fund, which he described as the best run in
the region, and the Fund for Social Works. He said a main
constraint for the Fund's activities in Yemen was it did only
a limited amount of grant funding. He said that the
electricity grid in Yemen covers only 30% of the population
and that if the U.S. could provide grants, the Fund might be
able to co-finance a project to expand the electricity grid.
11. (SBU) Concerning project assistance to Iraq, Hamad said
that Iraq is technically a non-functioning member because it
has been in default since 1990 over approximately USD 50
million owed to the fund, and that it does not participate in
meetings or activities. He said though the amount owed is
relatively small, the principle of all members adhering to
the Arab Fund's standards is important.
12. (U) This cable was cleared by U.S. AID Administrator
Henrietta Fore.
********************************************* *
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