US embassy cable - 03KUWAIT1468

C O N F I D E N T I A L KUWAIT 001468 
 
SIPDIS 
 
STATE FOR NEA/FO 
STATE PASS USAID 
 
E.O. 12958: DECL: 04/16/2013 
TAGS: EAID, PREL, KU, IZ 
SUBJECT: ARAB FUND MEETING APRIL 22-23: REQUEST FOR URGENT 
DEMARCHE 
 
 
Classified By: Ambassador Richard H. Jones for reason 1.5 (D). 
 
1.(U) This is an action request -- see paragraph 5. 
 
2. (C) At an April 16 meeting with Ambassadors Raphel and 
Carney of the Office of Reconstruction and Humanitarian 
Assistance (ORHA), AbdulLatif Al-Hamad, Director General of 
the Arab Fund for Economic and Social Development (AFESD) 
pointed out that Iraq's membership in the Fund had been 
suspended since 1992, on the basis of some KD 15 million 
(approximately USD 50 million) of arrears Iraq owes to AFESD. 
 Each year, the Board of Governors meets to review AFESD 
operations, and each year since 1992 a resolution is adopted 
to continue its suspension  (under current rules the only 
other option is to remove Iraq from the Fund).  Al-Hamad 
explained that he, as Director General, cannot legally 
reengage Iraq to work out a plan to address its arrears 
problem and consider providing any lending or grants for any 
reconstruction in Iraq until the Board of Governors 
(comprising the Finance Ministers of Arab League states) 
approves such an approach. 
 
3.(C) Al-Hamad then noted that the next Board of Governors 
meeting was scheduled for April 22-23 in Abu Dhabi, and that 
the Board only meets once a year.  If the Governors do not 
approve AFESD involvement in Iraq next week, he said, it will 
be a full year before they can revisit the decision (as the 
AFESD charter apparently has no mechanisms for extraordinary 
Board of Governors meetings). 
 
4.(U) Other topics discussed during the meeting are reported 
septel. 
 
5.(C) Action Request:  Given the potential importance of 
AFESD involvement over the next 12 months in Iraq's 
reconstruction, Embassy Kuwait and ORHA suggest the following 
points be delivered ASAP in Arab League capitals: 
 
-- The Board of Governors of the Arab Fund for Economic and 
Social Development will meet April 22-23 in Abu Dhabi. 
 
-- We understand that one agenda item will be whether to 
renew Iraq's suspension from the organization for non-payment 
of arrears, or to dismiss it from the organization 
altogether. 
 
-- We believe the Arab Fund can and should play an important 
role in the reconstruction of Iraq. 
 
-- We strongly encourage you to introduce and/or approve a 
Board of Governors resolution to authorize the Directors of 
the Arab Fund to engage with Iraq on a plan to address its 
arrears to the Fund and to resume grant and lending 
operations with Iraq. 
JONES