KFAED DEPUTY DIRECTOR GENERAL: BUREAUCRATIC

C O N F I D E N T I A L SECTION 01 OF 02 KUWAIT 000841

SIPDIS

E.O. 12958: DECL: 07/24/2018
TAGS: EAGR EAID ECON IZ KPAL KU PREL EINV LE
SUBJECT: KFAED DEPUTY DIRECTOR GENERAL: BUREAUCRATIC
ISSUES SLOWING IRAQI ASSISTANCE

REF: KUWAIT 734

Classified By: Ambassador Deborah K. Jones for reasons 1.4 b and d

Summary
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1. (U) Senior Advisor for Southern Iraq Affairs Gordon Gray
met with Kuwait Fund for Arab Economic Development (KFAED)
Deputy Director General Ghanim Al-Ghunaiman on July 22.
Al-Ghunaiman discussed current and future assistance programs
in Iraq and asked for assistance in identifying an
appropriate point of contact in the Iraqi Foreign Ministry.
He also highlighted ongoing difficulties with the Iraqis in
the disbursement of funds due to "bureaucratic issues." Gray
highlighted the continued importance of GCC engagement in
Iraq to counterbalance Iranian influence and to expand
Iraq-GCC trade. The two also discussed Kuwaiti assistance to
the Palestinian Authority and to Lebanon. End summary.

Iraq: Bureaucratic Issues Slowing Down Assistance
-------------- --------------


2. (U) Senior Advisor for Southern Iraq Affairs Gordon Gray
met with KFAED Deputy Director General Ghanim Al-Ghunaiman on
July 22 to highlight the continued importance of GCC
engagement in Iraq to counterbalance Iranian influence and
expand Iraq-GCC trade. Currently, KFAED is overseeing the
identification and distribution of USD 120 million in grants
to Iraq. (Note: An additional USD 450 million in
concessional loans for infrastructure projects in Iraq has
been pledged, but according to KFAED none has been disbursed
due to "consistently changing Iraqi priorities." End note.)
The grants are divided into two tranches of USD 60 million
each. The first tranche allocates USD 30 million for schools
in southern Iraq and USD 30 million for a medical center in
Basra. The second tranche allocates USD 36 million to water
projects in Sadr City and USD 24 million for schools in the
central and northern areas of Iraq. According to
Al-Ghunaiman, the projects are in various stages of
implementation - the school grants are being implemented and
the hospital wing project remains in the development phase
with a consulting firm. All projects are open to both Iraqi
and Kuwaiti firms and KFAED encourages joint ventures between
the two.


3. (C) Al-Ghunaiman highlighted ongoing difficulties with
the Iraqis in the disbursement of these and additional funds.
Specifically, he mentioned the absence of a regular and
reliable point of contact in Iraqi ministries outside of the
Ministry of Planning. Al-Ghunaiman mentioned examples of
sending requests to one Iraqi ministry and getting a response
from another or making repeated calls to the Foreign
Ministry, but not receiving a response. To add to these
difficulties, he noted the differences in Iraqi and Kuwaiti
bureaucratic procedures concerning loans and grants. At
times, grants will be cleared by Iraqi ministries, but will
lack signatures or additional paperwork necessary for
processing in Kuwaiti ministries.


4. (U) Al-Ghunaiman turned to the issue of Iraqi farmers
living and working in the Iraqi port city of Um Qasr. The
Iraqi Foreign Ministry submitted a USD 18 million plan to
KFAED to relocate these farmers and build a new community 5km
into Iraq from Um Qasr. KFAED and the Kuwaiti Foreign
Ministry have been attempting to contact the appropriate
Undersecretary at the Iraqi Foreign Ministry to host an Iraqi
delegation in Kuwait and discuss the plan, but have been
unable to make contact. Gray offered to look into the issue
upon his return to Iraq and help identify the appropriate
Iraqi Foreign Ministry point of contact. (Note: KFAED has no
representation in Iraq, but believes that the recently named
Kuwaiti Ambassador to Iraq Lt. Gen Ali al-Momen will help
facilitate grants and work to clear up outstanding
bureaucratic issues. End note.)

Aid to Lebanon and the Palestinian Territories
-------------- -


5. (U) In response to Gray's inquiry into the status of
assistance to the Palestinian Territories and Lebanon,
Al-Ghunaiman pointed to Lebanon as a success story. In the
aftermath of the 2006 war, KFAED is overseeing the
distribution of USD 300 million in Lebanon. KFAED has an
office in Beirut and has signed 35 projects to date (reftel).
On the Palestinian Territories, things are more confusing.
The Government of Kuwait pledged USD 300 million to the
Palestinians at the December 2006 Paris Donor's Conference,

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but has yet to determine how to distribute the money to the
various international agencies including the World Bank, Arab
Fund for Economic and Social Development, and the Islamic
Development Bank. According to Al-Ghunaiman, the Deputy Prime
Minister and the Foreign Minister is handling this issue and
there is a possibility that the funds may be transferred to
KFAED for them to administer. (Note: Kuwaiti Ministry of
Foreign Affairs U/S Jarallah informed Ambassador on July 15
that the funds has been released and should be available
"within ten days" i.e. by July 25. End note.)


6. (U) Embassy Baghdad Senior Advisor Gordon Gray has cleared
this cable.

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For more reporting from Embassy Kuwait, visit:
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Visit Kuwait's Classified Website:
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JONES