US embassy cable - 05MANAMA68

C O N F I D E N T I A L SECTION 01 OF 03 MANAMA 000068 
 
SIPDIS 
 
E.O. 12958: DECL: 01/15/2015 
TAGS: PGOV, PREL, PINR, BA 
SUBJECT: NEW CABINET REFLECTS CONTINUED REFORM; PM'S BASE 
OF SUPPORT ERODES FURTHER 
 
REF: MANAMA 0050 
 
Classified by Ambassador William T. Monroe for reasons 1.4 
(b) and (d). 
 
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Summary 
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1.  (C) The new cabinet announced January 14 by King Hamad 
has two new ministers and six ministers from the former 
cabinet covering new portfolios.  Five ministers in the 
previous cabinet, formed in November 2002, were dropped, four 
of whom have new positions as advisors to the Prime Minister 
or King.  Members of the Al Khalifa family now hold nine of 
20 ministerial slots, up from eight of 23 in the former 
cabinet.  The tone of the new cabinet is younger, more 
reformist and technocratic than the previous group.  Foreign 
Minister Shaikh Mohammed bin Mubarak Al Khalifa told the 
Ambassador that the new cabinet was a "move toward the 
future" and a transition away from a system where ministers 
would "remain in place for twenty years."  Within the cabinet 
are fewer ministers beholden to the Prime Minister, who has 
been in office since 1971, and the shake up could result in 
an erosion of support for the PM and augur restricted freedom 
to maneuver on policy issues.  End Summary. 
 
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New Cabinet Sworn in January 15 
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2.  (SBU) After four days of speculation in Bahrain's press 
and majleses, and intensive consultations within the royal 
family and cabinet, King Hamad bin Isa Al Khalifa announced a 
new cabinet the evening of January 14.  The cabinet was sworn 
in at noon on January 15 and held its first session on 
January 16.  Two new ministers joined the cabinet, five 
former ministers were moved out, six ministers are now 
responsible for new, additional, or smaller portfolios, and 
two ministries were merged, one split, and another renamed. 
A second woman joined the cabinet and the number of Al 
Khalifa family members in the cabinet, including Prime 
Minister Shaikh Khalifa bin Salman Al Khalifa, increased from 
eight (of 23, 35 percent) to nine (of 20, 45 percent).  The 
shuffle represents the biggest change since the cabinet was 
appointed in November 2002 following the first parliamentary 
elections since the early 1970s. 
 
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New Cabinet A "Move Toward the Future" 
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3.  (C) In a January 11 conversation, Deputy Prime Minister 
and Foreign Minister Shaikh Mohammed bin Mubarak Al Khalifa 
told the Ambassador that the cabinet was a "move toward the 
future" and a reaffirmation that "the process of reform 
continues."  He suggested that the focus should not be on 
specific personalities but rather on the formation of a new 
government structure.  The cabinet was being downsized to 
improve efficiency and to respond better to the demands of 
the parliament.  He said that King Hamad wants to bring "new, 
young faces" into the cabinet.  The King recognizes that 
Bahrain needs to change, and prefers to implement incremental 
change in the cabinet rather than do it all at once. 
Ministers should no longer remain in place for twenty years - 
"like me," he joked. 
 
4.  (SBU) The cabinet newcomers are Minister of Social 
Affairs Dr. Fatima Al Belooshi, the former dean of the school 
of education at the University of Bahrain, and Minister of 
Finance Shaikh Ahmed bin Mohammed Al Khalifa, the former 
Governor of the Bahrain Monetary Agency (BMA - central bank). 
 (See bios paras 13-14.)  Dr. Al Belooshi joins Health 
Minister Dr. Nada Haffadh as the second woman in the cabinet. 
 Shaikh Ahmed has a strong reputation as a technocrat from 
his four years as BMA governor, 2001-05, and four years as 
director of the Bahrain Stock Exchange, 1997-2001. 
 
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Five Move Out, Six Have New Duties 
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5.  (SBU) Moved out of the cabinet are Minister of Cabinet 
Affairs Mohammed Mutawa, Minister of Finance and National 
Economy Abdulla Saif, Minister of Information Nabeel Al 
Hamer, Minister of Justice Jawad Al Arayyed, and Minister of 
State Abdul Nabi Al Shoala.  All but Al Shoala were named 
advisors to the Prime Minister or King with rank of minister; 
Al Shoala is rumored to be named ambassador to Thailand. 
Mutawa is Advisor to the Prime Minister for Cultural Affairs; 
Saif is Advisor to the PM for Economic Affairs; Al Hamer is 
Advisor to the King for Information; and Al Arayyed is 
Advisor to the PM for Legal Affairs. 
6.  (SBU) Six ministers from the former group remain in the 
cabinet but with altered responsibilities.  Minister of 
Industry Hassan Fakhro is now Minister of Industry and 
Commerce.  Minister of State for Foreign Affairs Mohammed 
Abdul Ghaffar retains his current position and adds Minister 
of Information.  Former Minister of Commerce Ali Saleh is now 
Minister of Municipalities and Agricultural Affairs.  Former 
Minister of Municipalities and Agricultural Affairs Mohammed 
Al Sitry is now Minister of Justice.  Former Minister of 
State Abdul Hussein Mirza was named Minister of Cabinet 
Affairs.  Minister of Labor and Social Affairs Majid Al Alawi 
was named Minister of Labor (with Dr. Al Belooshi picking up 
the Social Affairs portfolio). 
 
7.  (SBU) From the institutional perspective, the Ministries 
of Industry and Commerce were merged and the Ministry of 
Labor and Social Affairs was split into two.  The Ministry of 
Finance and National Economy was renamed Ministry of Finance. 
 (Note:  It is yet unclear whether lead responsibility for 
implementation of the U.S.-Bahrain free trade agreement (FTA) 
will remain with the Ministry of Finance or will move to the 
Ministry of Industry and Commerce.  End Note.) 
 
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Erosion in PM's Base of Support 
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8.  (C) The greatest impact of the cabinet shuffle is that 
the PM's power and influence within the cabinet is further 
constricted.  Mutawa, Saif and Shoala were long-time members 
of the cabinet loyal to the PM.  Mutawa was known as the PM's 
strong-armed (but urbane) enforcer.  Shoala had no defined 
set of responsibilities, but was the PM's utility infielder 
for special projects.  Both Mutawa and Shoala had reputations 
for ensuring that the PM was included in business deals of 
any meaningful size on the island.  Saif is best known to us 
as the technocrat negotiator of FTA, but in the Bahraini 
domestic context, is infamous for presiding over the General 
Organization for Social Insurance during a time of 
significant financial irregularities.  Saif was called before 
the parliament in early 2004 for questioning about his 
potential role in the scandal. 
 
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Technocrats and Reformers 
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9.  (C) As a group, the ministers in new positions have 
reputations for being honest reformers who are friendly to 
the United States and the west.  Minister of Industry and 
Commerce Fakhro is very close to the King and presides over 
ministries with significant control over major sectors of the 
economy.  Minister of Cabinet Affairs Mirza was brought into 
the cabinet in 2002 to conduct public tenders in a 
rules-based, transparent manner.  Though some problems remain 
in public tendering, he is generally considered to have been 
very successful.  It is not yet clear whether he will retain 
these responsibilities in his new position.  Former Cabinet 
Affairs Minister Mutawa was the PM's "whip" to ensure the 
ministers lined up behind the PM's policies; Mirza will 
likely take a more technocratic approach to cabinet affairs. 
 
10.  (C) Minister of Justice Al Sitry received his Masters 
and Ph.D. in administration from the University of Southern 
California.  He is a traditional Shia leader from an 
important family who was not associated with political 
activism during the turbulent 1990s.  Minister of State for 
Foreign Affairs/Minister of Information Abdul Ghaffar is a 
former ambassador to the United States, in Washington from 
1994 to 2001, and a frequent interlocutor of the 
Ambassador's.  While he is a steadfast Bahraini patriot, 
Abdul Ghaffar is a good friend of the United States and 
understands and promotes United States policies within the 
cabinet.  He has been our point person on sensitive issues 
such as Bahraini detainees at Guantanamo and Article 98. 
 
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What Did Not Happen 
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11.  (C) During the four days between the first leaks of a 
cabinet change (January 10) and the formal announcement 
(January 14), rumors were flying about who would take what 
job.  Of the changes that were floated but not acted upon, 
most important was speculation that Minister of 
Transportation (and PM son) Shaikh Ali bin Khalifa Al Khalifa 
would add deputy PM to his responsibilities.  It did not 
happen.  Also, there were reports that Ministry of Labor and 
Social Affairs Assistant Under Secretary Shaikha Hind bint 
Salman Al Khalifa would resign in protest at the appointment 
of Dr. Al Belooshi as Minister of Social Affairs.  Shaikha 
Hind denied the reports the following day, saying that the 
new cabinet was already at the limit of the "quota" of Al 
Khalifa family members in ministerial positions.  (Comment: 
This is the first we have heard of such a quota.  She may 
have said this as a face-saving way to explain why she was 
not made minister.  End Comment.)  The Ministries of Justice 
and Islamic Affairs were not reunited under one minister (Al 
Sitry); one press report suggested that this was because of 
objections to placing Islamic Affairs under a Shia. 
 
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Comment 
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12.  (C) The tone of the new cabinet, particularly in 
contrast with the previous one, is younger, more western 
educated, and reform oriented.  The increased presence of 
honest technocrats in key positions, particularly related to 
the economy, demonstrates the King's focus on further 
modernizing the economy and taking advantage of the potential 
benefits from the U.S.-Bahrain FTA.  If this cabinet truly is 
a first step in the transition from an old to a new political 
paradigm, we would expect the next step to come after the 
October 2006 parliamentary elections.  The King may not 
choose to take on his uncle the Prime Minister in a direct 
showdown at that time, but he clearly is implementing a long 
term plan designed to erode the PM's support within the 
cabinet and constrict his freedom of maneuver on policy 
matters.  We do not, however, count the PM out.  Since 1971, 
he has been the ultimate survivor, and will look for friends 
and allies in the new cabinet to help promote and extend his 
influence.  End Comment. 
 
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Bio Notes 
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13.  (U) Minister of Social Affairs Dr. Fatima Al Belooshi: 
Dr. Al Belooshi was dean of the school of education at the 
University of Bahrain, where she worked from 1996 to the 
present.  She received her Ph.D. in instructional technology 
and media from Columbia University in New York in 1992.  She 
was an Eisenhower Fellow in 1996.  She is married and has 
four children, ages seven to 18. 
 
14.  (U) Minister of Finance Shaikh Ahmed bin Mohammed Al 
Khalifa:  Shaikh Ahmed was Governor of the Bahrain Monetary 
Agency from 2001 to the present.  He was director of the 
Bahrain Stock Exchange from 1997-2001.  He also worked at the 
Ministry of Finance and National Economy and the Ministry of 
Commerce.  He received both his MBA (1986) and BA (1984) in 
accounting and finance from St. Edwards University in Austin, 
Texas.  He was born in 1961, is married and has three 
children. 
 
MONROE