Identifier
Created
Classification
Origin
08KUWAIT589
2008-05-22 12:50:00
UNCLASSIFIED
Embassy Kuwait
Cable title:  

KUWAIT HOSTS FOURTH WORLD ISLAMIC ECONOMIC FORUM

Tags:  ECIN PREL PGOV EAID ENRG KU 
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VZCZCXRO0884
PP RUEHBC RUEHDA RUEHDE RUEHGI RUEHJS RUEHKUK RUEHLH RUEHPW RUEHROV
DE RUEHKU #0589/01 1431250
ZNR UUUUU ZZH
P 221250Z MAY 08
FM AMEMBASSY KUWAIT
TO RUEHC/SECSTATE WASHDC PRIORITY 1516
INFO RUCNISL/ISLAMIC COLLECTIVE PRIORITY
RHEBAAA/DEPT OF ENERGY WASHDC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
UNCLAS SECTION 01 OF 04 KUWAIT 000589 

SIPDIS

DEPT FOR IO, NEA/ARP

E.O. 12958: N/A
TAGS: ECIN PREL PGOV EAID ENRG KU
SUBJECT: KUWAIT HOSTS FOURTH WORLD ISLAMIC ECONOMIC FORUM

UNCLAS SECTION 01 OF 04 KUWAIT 000589

SIPDIS

DEPT FOR IO, NEA/ARP

E.O. 12958: N/A
TAGS: ECIN PREL PGOV EAID ENRG KU
SUBJECT: KUWAIT HOSTS FOURTH WORLD ISLAMIC ECONOMIC FORUM


1. Summary: From April 29 to May 1, Kuwait hosted the Fourth
World Islamic Economic Forum (WIEF). The event was opened by
the Amir of Kuwait and was attended by representatives from
most of the member states of the Organization of the Islamic
Conference including the heads of state of Jordan,
Afghanistan, Senegal, and Bosnia. Senior representatives
from the Arab League, the GCC Secretariat, the Arab Fund, and
the Islamic Development Bank also participated. The
principal topics were economic reform, energy, economic
cooperation, poverty reduction, education, and the role of
the private sector in development. Breakout sessions also
covered Small-and-Medium Enterprises, Telecommunications,
Infrastructure, Education, Tourism, Logistics,
Entrepreneurship, and Women in Business. During question and
answer sessions, a number of participants lamented that these
fora generally produced lots of positive rhetoric but little
in the way of concrete action and follow-up. Several
participants suggested that a WIEF Secretariat be established
to track and report on the implementation of the proposals
and pledges made by participants. In his keynote address,
the Amir announced that Kuwait was donating USD 100 million
for the establishment of a "Fund for Good Living in Muslim
Countries" intended to provide basic food staples for the
Muslim consumers most affected by rising food prices. The
next WIEF will be held in Jakarta in February 2009. End
Summary.


Opening Remarks by Kuwaiti Amir, Foreign Leaders
-------------- ---


2. In his opening remarks, the Amir of Kuwait Shaykh Sabah
Al-Ahmad Al-Jaber Al Sabah highlighted the growing global
food crisis and proposed the establishment of a "Fund for
Good Living in Muslim Countries" intended to provide basic
food staples to countries in dire need and contribute to
development of the agricultural sector. He announced that
Kuwait would donate 100 million USD to this fund and called
on countries, and regional and international organizations to
support this effort. He also urged the Islamic countries to
work together towards raising cross-border investment,
removing customs barriers, improving infrastructure,

increasing efficiency of transportation and communications,
and building a private sector able to lead economic growth in
Muslim countries.


3. King Abdullah of Jordan spoke of the need for the
Organization of the Islamic Conference (OIC) to create an
economic community that can withstand global financial and
energy shocks and other global challenges. He bemoaned the
meager GDP figures posted by the OIC even in this time of
record-high energy prices. King Abdullah pointed out that
the combined OIC GDP is only one-fourth that of Europe and
less than the GDP of France. Development in the OIC remains
incomplete and uneven, he argued, and stressed the importance
of immediate action to improve education and training
standards in the OIC. Arab graduates are leaving the Arab
world in large numbers, and more than half of those that are
educated overseas do not return, King Abdullah added. This
is creating a shortage of skilled professionals with local
cultural and national expertise, he stressed, and the OIC
needs to address this gap in technical education.


4. Other speakers, including FM Wade of Senegal (the current
OIC President),President Silajdzic of Bosnia and Saudi
businessman Prince Waleed bin Talal, praised the Kuwaiti
initiative to alleviate poverty in the Islamic World and
vowed their support to the Fund proposed by the Amir.
President Hamid Karzai of Afghanistan highlighted recent
progress made in Afghanistan and encouraged greater GCC and
OIC involvement and investment in Afghanistan.


The Muslim World as a Burgeoning Market
--------------


5. This session focused on the changing role of the OIC in
the global economy and the importance of economic cooperation
among OIC members. Former British Prime Minister Tony Blair
encouraged the Islamic countries to open up their economies
and invest in human capital. He highlighted the need for
reform in the public sector and called on the Arab states to
invest their vast wealth strategically for the future. He
also stressed the need for rejecting extremism and
intolerance that serve as obstacles to economic development
and open economies.


6. Former Kuwaiti Finance Minister Bader Al-Humaidhi said

KUWAIT 00000589 002 OF 004


that most Muslim economies still focused on commodities
rather than value-added production and services. The only
exception to this is the growth of the financial services
sector, especially in the Gulf, and especially in Islamic
banking and finance, he argued. The problem is not lack of
resources but lack of conviction, leadership, and
coordination, he stressed.


7. Toyoo Gyoten, President of Japan's Institute for
International Monetary Affairs, pointed out that the two
economic pillars of the Islamic world are the Gulf and East
Asia. He highlighted the natural symbiotic relationship that
can be cultivated between the Gulf states and East Asian
Islamic economies. Gulf countries can provide the capital
and East Asian economies can provide the labor and technology
for a coordinated and mutually beneficial economic
development framework.


The Future of Energy in a Changing World
--------------


8. This panel discussion focused on the changing landscape
of the energy sector. Speakers emphasized environmental
challenges and need for further investment in new energy
technologies, including both alternative energy and new
technology for the development of traditional fossil fuel
resources. Nader Al-Sultan, former CEO of Kuwait Petroleum
Corporation, argued that environmental concerns have become a
critical concern that must be factored into all major
decisions on energy investment and energy policy. He added
that although energy consumption is at an all-time high,
further poverty reduction and growth in developing countries
will lead to a further rise in energy consumption in the
coming years. Surging energy demand and concerns over supply
insecurity, combined with the rising cost of investment, is
driving up energy prices globally. He suggested that the
notion of energy independence espoused by some consuming
nations is just as troublesome and short-sighted as the
growing phenomenon of resource nationalism among producing
nations. Energy independence is a fallacy. In fact,
continued interdependence is both desirable and inevitable,
Sultan argued.


9. Mohammed Al-Olaim, Kuwait's Acting Minister of Oil
reiterated Kuwait's commitment, made at the November 2007
OPEC summit, to invest 150 million USD for research in clean
and environmentally friendly sources of energy. He added
that Kuwait is committed to increased investment in research
and development, especially in new energy technologies.
Kuwait Petroleum Corporation (KPC) Managing Director for
Planning Jamal Al-Nouri stated that KPC plans to invest 55
billion USD over the next five years to further develop
Kuwait's oil sector with the goal of increasing oil
production to four million barrels per day by 2020. He added
that KPC and Kuwait were acutely aware of the need for
security in energy supply. KPC is undertaking ambitious
plans to contribute to the development of secure energy
supplies worldwide.


Economic Cooperation between the GCC and the Muslim World
-------------- --------------


10. Experts in this session discussed the need for greater
cooperation within the OIC, especially between the GCC and
the rest of the Islamic world. Abdullah Bishara, former
Secretary General of the GCC, gave a general overview of the
GCC's role in fostering development in other Islamic
countries. He explained that between 2005 and 2008, the
Kuwait Fund, Saudi Arabia Fund and Abu Dhabi Fund have given
significant sums in grants, soft loans and technical
assistance to 47 Islamic countries around the world. He
continued that as a result of swelling liquidity provided by
high oil revenues, GCC private sectors are also diversifying
their investments into real estate, tourism, banking and
financial services, particularly in Asia and Africa.


11. Jassim Al-Mannai, the Director General of the Arab
Monetary Fund highlighted the challenges faced by foreign
workers, mostly from Islamic countries, in GCC countries.
One of the most significant challenges is the difficulty
faced by many of these workers in sending remittances to
their home countries. Remittances, he argued, provide a
influx of between 27 and 30 billion USD to countries in Asia
and Africa. Due to the high cost of transferring these
remittances, many workers are resorting to dangerous and
illegal means transferring funds, he added. He encouraged

KUWAIT 00000589 003 OF 004


governments in the Islamic world to cooperate to make
remittances easier and cheaper.


The Role of Investment in Poverty Reduction
--------------


12. Discussion in this session focused mainly on the ongoing
global food crisis and the impact of the US housing crisis on
the global economy. Shaykh Dr. Mohammed Al-Sabah, Kuwaiti
Minister of Foreign Affairs highlighted the need to alleviate
poverty and starvation, especially in Africa and Asia. He
referred to UN Secretary General Ban Ki Moon's call for
donations from rich countries towards UN poverty alleviation
funds. Dr. Amado Cisse, Vice President of the Islamic
Development Bank, highlighted the progress made in relatively
small economies like Thailand, Malaysia and Vietnam. He
argued that the success of these economies shows that
sustained private sector-led growth supported by an
attractive investment climate is "a tried and true way out of
poverty."


13. Meanwhile, Director General of the Arab Fund for
Economic and Social Development Abdulatif Al-Hamad referred
to the rising cost of living in Islamic countries due to the
global food crisis. He stated, however, that the Arab World
was far better off, in terms of poverty, than much of the
rest of the world. In his closing remarks he urged Islamic
countries, especially the GCC countries, to find effective
ways to ensure that development strategies and investment
policies contribute to human development, social progress,
and poverty eradication.


Education and Development in the Islamic World
-------------- -


14. This panel focused mainly on the need for reform in Arab
education systems. Kuwaiti Education Minister Dr. Nouriya
Al-Sabih mentioned that Kuwait is investing 1.5 billion
Kuwaiti Dinars (KD) or 5.8 billion USD in facilities,
technology development and teacher training. Kuwait has
hired a British company to develop new math and English
curricula for Kuwaiti schools, she added. Dr. Hasan
Al-Ebraheem of the Kuwaiti Society for the Advancement of
Arab Children spoke about three general areas of focus:
sustainable development; promotion of peace, human rights,
and democracy; and educational standards and teacher
qualifications. Combating computer illiteracy should also be
a priority in Arab countries, he suggested.


15. Dr. Farhan Nizami of the Oxford Center for Islamic
Studies commented on the need for a collaborative effort in
the Islamic World to develop a coordinated mechanism to fund
educational research in these countries. The Islamic world
is falling behind in educational and scientific research, she
stressed. Dr. Abdel Osman of UNESCO pointed to the vast
disparities in income, average age and education standards in
Islamic countries. He added that the only commonality
between these countries was the tremendous need for more
investment in education and literacy programs.


The Private Sector Role in Development
--------------


16. This session focused on the predominance of the public
sector in most Islamic countries, especially in Arab
countries. In most Arab countries, Tarek Sultan of Agility
Logistics claimed, the public sector is the primary
facilitator of economic development. The private sector is
relegated to specific, narrow segments of the economy mainly
because Arabs trust their governments more than the private
sector. Tunisian Finance Minister Mohammed Kashesh explained
the critical role that the private sector is starting to play
in the Tunisian economy. He said the main area where the
private sector can play a key role is in training and
development. The Tunisian economy is growing due to private
sector entrepreneurship and innovation, but the government
needs to facilitate such enterprises through progressive laws
and regulations, he added.


17. Olive Kigongo of the Uganda Chamber of Commerce
highlighted the important role of the private sector in
Uganda. Public-private partnerships in economic development
are crucial to development in Uganda and in other Islamic
countries, she stressed. Ian Buchanan of Booz Allen Hamilton
used development in Singapore as a case study for private

KUWAIT 00000589 004 OF 004


sector development. He noted that Singapore,s rapid
development had resulted from the proactive vision of the
government to develop Singapore's economy through reforms and
incentives for private sector innovation. Singapore reacted
to the world economy and to its own comparative advantages by
inviting private sector investment not just in large projects
and services, but also in the development of human capital.
The government provided tax credits and incentives to foreign
corporations to invest in adult continuing education,
especially in technical and professional areas. Indonesia,
Malaysia and other Islamic countries are starting to follow a
similar pattern, he added.


Concluding Remarks by Indonesian President Yudhoyono
-------------- --------------


18. President Yudhoyono emphasized the need for solidarity
within the Islamic world and for more economic cooperation
between the GCC and the East Asian Islamic States. He spoke
of the important role of Indonesia as the largest Islamic
country. He stressed that development in Indonesia is a sign
that Islamic countries all over the world can develop and
advance, not just in the Middle East. He urged the Arab
countries to look to East Asian Islamic states to pursue
opportunities for investment and trade. Countries like
Malaysia and Indonesia have a lot to offer to the Arab World,
he said, in investment opportunities, food and agricultural
products, and human resources. He added that the rise in
popularity of Halal food products would contribute greatly to
the growth of the Indonesian economy over the next few years.


19. The President also encouraged the Arab countries to
visit Indonesia to enjoy its hospitality and natural beauty.
He announced that Indonesia will host the fifth World Islamic
Economic Forum in Jakarta in February 2009. He stressed that
Indonesia is eager to host the WIEF to showcase Indonesia,s
growing economy, its resources - both natural and human - and
its beauty that has attracted large-scale tourism in recent
years.

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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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JONES