US embassy cable - 05KUWAIT3850

UNCLAS SECTION 01 OF 03 KUWAIT 003850 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR EB/ESC/TFS IKRUM, S/CT TKUSHNER, NEA/ARPI 
SWALKER, NEA/ELA SSONTY, NEA/IPA GLOGERFO, EB/JBLOOM, SA/A 
MQUINN, NSC FOR JZARATE, TREASURY FOR DGLASER, OFAC 
DIRECTOR RWERNER, JUSTICE FOR JSILVERWOOD, STATE PLEASE 
PASS TO USAID 
 
E.O. 12958: N/A 
TAGS: EFIN, ETTC, KTFN, KVPR, PINR, PTER, KU, AF, IZ, GZ, CH, WB, TERROR FINANCE 
SUBJECT: KUWAIT FUND DIRECTOR GENERAL DISCUSSES AID TO 
IRAQ, PALESTINIANS, AND AFGHANISTAN AND ENGINEERING 
EXCHANGE PROGRAM WITH THE UNITED STATES 
 
REF: A. KUWAIT 1883 
 
     B. KUWAIT 3775 
     C. KUWAIT 3585 
 
1.  (U) Action request at para 13. 
 
2. (SBU) Summary and Comment:  In an August 24 meeting with 
the Ambassador, the Director General of the Kuwait Fund for 
Arab Economic Development (KFAED), Abdulwahab Al-Bader, made 
the following key points: (1) GOK has donated 25 million USD 
in grants to the Palestinian Authority during the 1990s and 
is collecting data on other funding provided to-date; (2) 
KFAED is ready to allocate 60 million USD in grants to Iraq 
for health and education but needs additional information on 
site locations and programs from Iraq; (3) KFAED would like 
to come to settlement with Afghanistan on its outstanding 
arrears in order to renew GOK loan assistance; (4) KFAED has 
launched a new educational exchange program for Kuwaiti 
engineering graduates to strengthen the Kuwaiti private 
sector work force.  Al-Bader requested Ambassador's 
assistance in hearing from KFAED counterparts in the 
governments of Iraq and Afghanistan regarding KFAED 
assistance to both countries (see paras 5-8).  Embassies 
Baghdad and Kabul might consider making inquiries as 
appropriate regarding Al-Bader's concerns.  End Summary and 
Comment 
 
 
Kuwaiti Assistance to the Palestinian Authority 
--------------------------------------------- -- 
 
3. (SBU) On August 24, Ambassador met with Abdulwahab 
Al-Bader, the Director General of the Kuwait Fund for Arab 
Economic Development (KFAED), the country's leading 
development organization providing loans and grants to 
approximately 100 countries.  This was the Ambassador's 
second meeting with Al-Bader following his appointment as 
KFAED Director in May 2005 (reftel A).  The Ambassador asked 
for Al-Bader's assistance in ascertaining the total amount of 
GOK assistance to the Palestinian Authority (PA), noting how 
difficult it has been to get an authoritative assistance 
figure. 
 
4.  (SBU) Al-Bader echoed the Ambassador's frustration and 
lamented the GOK's failure to adequately track and receive 
credit for the millions of USD in assistance it has provided 
to the PA and others.  He shared with the Ambassador a 
spreadsheet that outlined 25 million USD in GOK grants 
administered by the World Bank and the Arab Fund for PA 
health and education projects (reftels B and C).  Al-Bader 
added that Foreign Minister Al-Sabah, in his capacity as 
Chairman of the KFAED, had requested all ministries to 
provide to the KFAED all relevant information on GOK funding 
to the PA.  Al-Bader said he would share the information when 
available.  (Note: Grants through the Kuwait Fund have not 
been the main source of Kuwaiti support for the Palestinians; 
funds provided in connection with Arab League commitments are 
much larger.  We are attempting to get a fuller picture of 
the mechanisms and amounts.) 
 
 
Assistance for Iraq and Afghanistan 
----------------------------------- 
 
5. (SBU) The Ambassador also inquired about the status of 120 
million USD in promised GOK grants for Iraq (Note: On June 19 
the Kuwaiti Council of Ministers doubled the original 60 
million USD figure).  Al-Bader explained that KFAED was ready 
to allocate the initial 60 million USD but that the Cabinet 
was still deciding on the source of the remaining 60 million 
USD.  Al-Bader speculated that KFAED would probably be asked 
to fund the remainder as well. 
 
6. (SBU) In agreement with the Iraqis, the initial 60 million 
dollar grant would be divided equally between Iraq's health 
and education sectors.  Al-Bader explained that the 30 
million USD for education would help fund approximately 31 
schools.  The other 30 million USD would go toward 
constructing rural hospitals.  Al-Bader noted that he 
rejected Iraqi proposals to construct mobile hospitals, 
recommending instead that the funds be used to build 10 rural 
hospitals (approx. 40-90 bed units) each equipped with mobile 
operating facilities. 
7.  (SBU) Al-Bader complained that neither funding program 
had been implemented because his ministerial counterparts at 
the Iraqi health and education ministries did not answer his 
requests for site locations and construction requirements for 
the schools and hospitals.  Al-Bader noted that without the 
requested information he could not solicit bids from 
contractors, explaining that contractors could not bid 
without specifics on location and building requirements.  He 
confirmed that the first 60 million USD was ready for 
dispersal and that even some basic project information would 
help him get started. He commented that his Iraqi government 
interlocutors (minister and under-secretary level) seemed to 
lack decision-making authority. 
 
8.  (SBU) With regard to Afghanistan, Al-Bader noted that the 
KFAED was prepared to offer some new loan assistance, in the 
form of concessionary loans, but needed GOA assistance in 
addressing outstanding Afghan loan arrears dating back to the 
1980s.  He said that KFAED had sent a proposal to the GOA and 
was flexible on how best to come to terms on the arrears to 
allow for renewed GOK assistance, but has heard nothing 
substantive from the GOA.  (Note: The Kuwait Fund is looking 
for legal cover.  There is no expectation of full recovery.) 
 
 
New Kuwaiti Engineering Exchange Program 
---------------------------------------- 
 
9. (U) Al-Bader mentioned that KFAED had launched in 
September 2004 a new External Training Program for Kuwaiti 
engineering graduates to receive private sector work 
experience and training with international engineering firms 
abroad, including Europe and the United States.  According to 
Al-Bader, the program continues to be a success with 19 
students having participated at last count, with 11 already 
hired by international companies.  Al-Bader plans to expand 
the program in 2005/2006 to include two groups of 30 
engineering graduates each (total 60 students per year) for 
training and instruction abroad. 
 
 
10. (U) Al-Bader explained that the main objective of the 
program was to develop Kuwaiti engineering talent for the 
private sector and expressed an interest in pursuing 
opportunities with firms in the U.S.  The Ambassador 
applauded KFAED's efforts in pursuing broader bilateral 
exchange opportunities with the U.S. and offered the 
Embassy's assistance to further develop the program in the 
U.S. 
 
 
Shift to Social Sector Assistance 
--------------------------------- 
 
11. (U) Al-Bader noted that KFAED was making good progress in 
implementing its "Five Year Plan" to shift more resources 
from industry to service sector programs including health and 
education.  (According to its 2003/2004 Annual Report, KFAED 
has funded projects in the following sectors: transportation 
(33.6 percent), energy (22.6 percent), agriculture (15.5 
percent), water and sewage (11.4 percent), industry (10.1 
percent), communication (3.1 percent), development banks (2.5 
percent), social (0.8 percent), and other (0.4 percent).) 
Al-Bader mentioned that KFAED had received funding requests 
for hospital construction in China in addition to existing 
KFAED projects there. 
 
 
Renewed Contacts with USAID 
--------------------------- 
 
 
12.  (U)  Al-Bader renewed his call for increased cooperation 
between KFAED and USAID and accepted the Ambassador's 
suggestion that he seek to meet with USAID officials during 
his upcoming visit to Washington for the World Bank/IMF 
meetings in late September.  Ambassador encouraged 
KFAED-USAID dialogue on development initiatives and offered 
Post's assistance in setting up an introductory meeting for 
Al-Bader. 
 
13. (SBU) Action Request: Kuwait Desk assistance is requested 
to contact USAID Director and Millennium Challenge 
Corporation for a possible meeting with Al-Bader during his 
visit to Washington for the World Bank/IMF conference. 
Al-Bader will be at the meetings only on the two weekend days 
and would like to meet at the WB/Fund meeting site.  Contact 
information for Al-Bader to be supplied by e-mail. 
 
 
Bio Data 
-------- 
 
14. (U) Abdulwahab Ahmed Al-Bader was born in 1955.  He holds 
a BA in Economics and was appointed Director General of the 
Kuwait Fund on April 30, 2005 after having served as Deputy 
Director of the Fund from 1986.  He has also served as 
Alternate Governor of Kuwait to the OPEC Fund of 
International Development (1981-1986); Governor of Kuwait to 
OPEC Fund (1986-Present); Member of the Board of the Arabic 
Bank of Economic Development in Africa (1982-1994) and has 
also served on the boards of Kuwait Consulting and Investment 
Company, International Financial Advisors Company, and Bubyan 
Fisheries Company.  Al-Bader is married and speaks excellent 
English. 
 
 
Background on Kuwait Fund for Arab Economic Development 
--------------------------------------------- ---------- 
 
15. (U) KFAED is the GOK's primary vehicle for providing 
assistance and aid to other countries.  It was founded the 
same year that Kuwait gained its independence, 1961, and was 
originally intended to assist Kuwait's Arab neighbors.  In 
1974 its mandate was expanded to include all developing 
countries.  To date, KFAED has committed over 11.5 billion 
USD in low interest loans to 100 countries through 650 
separate projects, has provided over 323 million USD in 
grants and technical assistance, and has contributed 1.15 
billion USD to other development institutions. 
LEBARON