NON-PAPER DELIVERED: RESPONDING TO ALLEGATIONS OF

UNCLAS KUWAIT 000401 SIPDIS E.O. 12958: N/A TAGS: EAID ECON EFIN PGOV KWBG IS KW SUBJECT: NON-PAPER DELIVERED: RESPONDING TO ALLEGATIONS OF CORRUPTION IN PALESTINIAN AUTHORITY REF: A. SECSTATE 38607 ¶B. KUWAIT 311 ¶C. KUWAIT 230 ¶D. KUWAIT 97 ¶E. KUWAIT 22 ¶1. On April 22, Econoff delivered reftel nonpaper on financial accountability and transparency measures by the Palestinian Authority (PA) to Ahmed Baqer of the Ministry of Foreign Affairs Arab World Department and stressed the PA's need for budget assistance. Baqer said that improvement on these issues by the PA was of interest to the GoK because it took great care to ensure that it could track how its financial assistance was disbursed. ¶2. Baqer outlined current GoK Palestinian aid commitments which included USD 220 million remaining from a USD 300 million Paris Donors Conference pledge in December 2007, USD 34 million UNRWA pledge from the January 2009 Arab Economic Summit in Kuwait and USD 200 million from the March 2009 Sharm Al-Sheikh donors conference. He explained that funds from the Sharm Al-Sheikh pledge or from the Paris pledge could theoretically be utilized for budget support. Baqer said that the Paris pledge had been divided into three elements: USD 80 million to be distributed by the Arab Fund for Economic and Social Development, USD 90 million to be administered by the Islamic Bank Development, and USD 50 million which the GoK is reserving for urgent requests. ¶3. Baqer said that the GoK had provided USD 196 million in budget support from 2002 until 2007 under 2002 Beirut Summit commitments. When asked by econoff to confirm that 2007 was the end of this commitment, Baqer declined to discuss why no payments had been made since 2007. Baqer said that the matter would be conveyed to the Council of Ministers for their consideration. (Note: Senior Kuwaiti officials have recently reiterated their preference for project-based assistance to the Palestinians rather than direct financial support. End note.) ********************************************* ********* For more reporting from Embassy Kuwait, visit: visit Kuwait's Classified Website at: http://www.intelink.sgov.gov/wiki/Portal:Kuwa it ********************************************* ********* JONES