GOK TO FULFILL PALESTINE AID PLEDGES BUT HESITANT

					  UNCLAS KUWAIT 000860 
 
SENSITIVE 
SIPDIS 
 
NEA/ARP; JEDDAH PLEASE PASS TO AMB HALE 
 
E.O. 12958: N/A 
TAGS: PGOV KPAL EAID ECIN ECON EFIN EG IS KU
SUBJECT: GOK TO FULFILL PALESTINE AID PLEDGES BUT HESITANT 
TO GIVE BUDGET SUPPORT 
 
REF: A. STATE 88787 
     
B. KUWAIT 401 
 
					

1. (SBU) On August 27 Embassy forwarded to FM Mohammad
Al-Sabah the Secretary's letter requesting PA aid (ref A). On
August 31, DCM brought a copy of the letter to Arab World
Department Director Ambassador Jassem Al-Mubaraki, who said
the GOK will fulfill its Palestinian aid funding pledges but
noted that the FM is still reluctant to provide budgetary
support to the Palestinian Authority. Mubaraki indicated he
would be traveling with the FM to Cairo next week and hoped
to use the trip to try to persuade the FM in favor of the
budget support option. He observed that since the GOK had
received a similar overture from the Quartet's Tony Blair and
Egypt's President Mubarak, it appeared clear that the
Palestinians wanted support more for budget than for project
assistance and if that were the case, perhaps Kuwait should
reconsider its position. The MFA official added that Kuwait
would deliver $80 million in aid this year -- out of $300
million committed to Palestine at the 2006 Paris Donors
Conference -- with $90 million next year, which would leave
$50 million of that pledge in balance (Kuwait previously
fulfilled part of its Paris pledge by providing $80 million
to the World Bank Trust Fund). No final determination had yet
been made with regard to the division of the funds, which
would likely be split between the Arab Fund, the Islamic
Development Fund, and possibly the World Bank. Mubaraki noted
the foregoing assistance was in addition to Kuwait's $200
million pledge for Gaza reconstruction.



2. (SBU) Comment: Mubaraki's positive approach
notwithstanding, the GOK typically has deemed budgetary
support undesirable on policy grounds (in general, not only
vis-a-vis the Palestinians) or determined it would be
difficult if not impossible to wrest such funds from an
obstructionist parliament both far more inclined to project
assistance and unsympathetic to the Palestinian Authority.
End comment.

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JONES