This record is a partial extract of the original cable. The full text of the original cable is not available.

C O N F I D E N T I A L SECTION 01 OF 03 DOHA 000048 
 
SIPDIS 
 
E.O. 12958: DECL: 01/08/2016 
TAGS: PREL ECON EAID EINV EFIN KPAL IZ AF LE QA
SUBJECT: A/S WAYNE BRIEFS QATARI OFFICIALS ON STRATEGIC 
INVESTMENT INITIATIVE 
 
REF: STATE 231703 
 
Classified By: Ambassador Chase Untermeyer for reasons 1.4 (b) and (d). 
 
¶1. (C) Summary. The Qatari Minister of State for Foreign 
Affairs and Finance Minister welcomed in principle the USG 
proposal presented by EB A/S Wayne for strategic investments 
in stability in the region. They were well-prepared and 
provided updates on their current assistance to the four 
priority need in the region -- Iraq, Afghanistan, Lebanon, 
and the Palestinian Authority. The Qataris did not commit to 
greater assistance but expressed willingness to engage in a 
deeper dialogue and consider new vehicles for assistance. 
COMMENT: The door appears open with the Qataris on the 
initiative, but it will require further follow-up. End 
Comment and Summary. 
 
¶2. (C) A/S Wayne and delegation met with Minister of State 
for Foreign Affairs Ahmed bin Abdulla al-Mahmoud, in the 
absence from Qatar of Foreign Minister Hamad bin Jassim Al 
Thani, on January 5; al-Mahmoud was accompanied by staff from 
the Office of American and European Affairs. A/S Wayne 
outlined the Strategic Investment Initiative, noting that 
Washington works closely on reconstruction and assistance 
issues with European countries and Japan and would like to 
start such an action-oriented dialogue with our friends in 
the Gulf. The dialogue would ensure that the necessary 
political decisions regarding investment and reconstruction 
would be well-informed. Coordination is needed. He noted the 
donor conferences planned or expected for the first months of 
2006 for Afghanistan, Iraq, Lebanon, and the Palestinians. 
The dialogue would also help deliver a "consistent message" 
to the countries that receive funding. 
 
¶3. (C) A/S Wayne and Treasury DAS Ahmed Saeed described the 
initiative as a "strategic investment in regional stability" 
with a multi-year time horizon and focused on Iraq, 
Afghanistan, Palestinian territories, and Lebanon. They 
invited the Qataris to discuss the initiative further with 
U.S. officials, perhaps by tele- or video-conference. A 
follow-up visit of senior U.S. officials will come at the end 
of January. 
 
¶4. (C) A-Mahmoud replied positively, welcoming the initiative 
as a way to strengthen the relationship with the United 
States. "Your approach is a good one," he said. He called the 
bilateral relationship "strategic" for Qatar. But he said 
that Qatari leaders have been "embarrassed" when, in their 
view, Washington has not followed through after promising 
some action. He said this happened in October 2005 when the 
Foreign Minister arranged for a dialogue in Doha with Iraqi 
Sunni leaders and the U.S. did not respond. (Note. The son of 
the head of the Muslim Ulema in Iraq, Harith al-Dari, was in 
Qatar in October.) "If we agree on something, let's continue 
with it," he urged. He said Qatar was open to considering 
specific U.S. proposals. 
 
¶5. (C) Al-Mahmoud said Qatar was trying to find opportunities 
for sustainable investment. In the Palestinian Territories, 
he said Qatar is thinking of investing in a bank to do small, 
community business loans and in a possible road to link Gaza 
and the West Bank. He said the Foreign Minister is planning a 
visit to the territories early in 2006. Al-Mahmoud said $265 
million has been donated to the Palestinians "so far" and 
that Qatar has paid in its full pledge to the Arab League. He 
said an investment company, International Salaam Company, was 
announced at the recent Amman conference; it will be 
capitalized at $250 million from private Qatari and 
Palestinian sources and will focus on reconstruction and 
investment projects in the territories. As an aside, he urged 
the U.S. to maintain the pressure on Israel to allow 
elections in East Jerusalem. Given that democracy is the 
centerpiece of U.S. policy in the Middle East, he argued, 
prohibiting the Palestinians from exercising their democratic 
rights would undermine the U.S. in the region. A/S Wayne said 
we was aware President Abbas had called for additional budget 
support during his recent visit to Doha and stressed that the 
short-term need is real. 
 
¶6. (C) On Lebanon, al-Mahmoud said that Qatar has donated 
$134 million, including $60 million to support the currency, 
since 1974. This total includes 23 cars provided by Qatar for 
an Arab League meeting in Beirut in 2002. 
 
¶7. (C) On assistance to Afghanistan, al-Mahmoud said the Amir 
pledged $10 million "to assist the people" at the December 
2005 Organization of Islamic Conference meeting. At the 2005 
Tokyo donors' conference, Qatar had pledged to do more. By 
May 2005, $20 million financial and in-kind assistance had 
been provided by Qatari charities. Also in May, a conference 
in Doha for Afghan police raised $360 million for 
Afghanistan. Qatar has also recently announced it will host a 
conference to support the police infrastructure in the 
country. A/S Wayne described the Afghanistan Compact as "a 
very good document on Afghanistan's needs" which was arrived 
at in an interactive process instructive to the Strategic 
Investment Initiative. He urged Qatari officials to 
familiarize themselves with the Compact and be ready to 
support it at the London conference as well as announce 
further support. 
 
¶8. (C) Al-Mahmoud also discussed Qatar's assistance to Iraq. 
Prefacing his remarks with "Your success in Iraq is our 
success," he provided the following breakdown of 
disbursements of the $100 million pledge at the Madrid 
donors' conference: 
 
-- $15 million to UNESCO for higher education 
-- $15 million for vehicles for the Iraqi government 
-- $10 million to World Bank Fund 
-- $5 million to train 1,464 police officers 
-- $20 million for pre-fabricated buildings and a hospital 
-- $3.5 million to train 10 persons in civil aviation 
-- $1.5 million for the 2004 Iraq conference in Doha 
 
Al-Mahmoud said this was in addition to Qatar Red Crescent 
assistance to Iraq. 
 
¶9. (C) Debt relief was discussed and a Qatari commitment was 
made during the visit of Special Envoy James Baker in 2003, 
al-Mahmoud said. At this stage, the Iraqis have not provided 
an interlocutor to deal with on the issue. He said the Amir 
might "respond to the request" on debt relief after Eid 
al-Adha (the holiday period ending January 15). 
 
¶10. (C) A/S Wayne described a donors committee and working 
group in Baghdad which the U.S. Government has encouraged to 
look sector by sector and perform a needs assessment. The 
committee will be useful for coordination and determining 
specific needs. Al-Mahmoud admitted that Qatar does not have 
diplomatic representation in Iraq for security reasons. 
 
¶11. (C) A/S Wayne suggestd that the U.S. side would be 
pleased to have more detailed phone- or video-conference 
discussions on each of the four key countries with Qatari 
experts. The Qatari Americas Director said they would 
consider whether to have the conversation bilaterally or 
GCC-wide. 
 
------------------- 
Minister of Finance 
------------------- 
 
¶12. (C) A/S Wayne outlined the SII (paragraphs 2-3) for 
Minister of Finance Yousef Hussain Kamal, who said that 
stability and security are prerequisites for investment. A/S 
Wayne made the point that for security and stability to take 
hold, people have to have prospects for prosperity. He gave 
the example of prosperity beginning to appear in the former 
Yugoslavia after a combination of sustained political and 
economic support. 
 
¶13. (C) Minister Kamal appeared briefed on the concept of the 
SII and saw it along the lines of an investment vehicle. He 
asked, is it investment or aid? Will it be structured as a 
joint venture or a holding company? DAS Saeed explained that 
the World Bank trust funds and other IFI involvement 
represents a possible vehicle for use by the SII, but that 
the notion of strategic investment implies higher level 
cooperation and coordination. The minister expressed 
dissatisfaction that prior Qatari assistance had disappeared 
and that a better model would be a public-private joint 
venture with 30-40% held by the private sector; they would be 
first in line to obtain returns. He said government 
participants -- the other 60-70% -- would likely accept a 
zero rate of return because the vehicle would enhance 
stability. He also expressed the view that the World Bank and 
IMF could be involved in this vehicle. 
 
¶14. (C) Kamal said the investment vehicle should be set up as 
a business, with private sector leaders, such as former 
executives from Citigroup or Microsoft, on the board of 
directors. "You don't want government people on the board," 
he said. But governments should be like the "General 
Assembly," approving the broad direction of the venture. He 
welcomed the principle of the initiative, saying Qatar "does 
a lot of assistance," but in the end, there is no 
follow-through or results. Kamal said that, while he is the 
Secretary General of the Supreme Council for Investment, 
 
SIPDIS 
reporting to the Amir, all follow-up on the SII will be with 
the MFA. 
 
¶15. (C) Welcoming the minister's recommendations, A/S Wayne 
said we definitely want to encourage private sector growth 
and activity and we want to involve the private sector in our 
efforts. Identifying benchmarks, using the international 
financial institutions to identify needs, and discussing 
disbursement mechanisms are all important. 
¶16. (C) A/S Wayne noted that the GOQ had recently purchased a 
bank in Lebanon. Kamal said the price was $246 million and 
that the GOQ considers it a long-term investment. "This is 
the Amir's strategy," he said. "It will be our arm in 
Lebanon."  Qatar makes investments in the Arab region as a 
way to encourage the private sector to do the same. He added 
that Qatar donated 100 police cars to Lebanon and NGOs are 
helping the schools. A/S Wayne concluded by noting our belief 
that the IMF can play a very important role in a sustainable 
reform program for Lebanon. 
UNTERMEYER