VZCZCXRO0236
PP RUEHDE RUEHDIR
DE RUEHKU #1025/01 1811400
ZNY CCCCC ZZH
P 301400Z JUN 07
FM AMEMBASSY KUWAIT
TO RUEHC/SECSTATE WASHDC PRIORITY 9495
INFO RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE PRIORITY
RHEBAAA/DEPT OF ENERGY WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY

C O N F I D E N T I A L SECTION 01 OF 02 KUWAIT 001025 
 
SIPDIS 
 
NOFORN 
SIPDIS 
 
STATE FOR NEA/ARP, EEB/ESC/IEC, ENERGY FOR MWILLIAMSON 
 
E.O. 12958: DECL: 06/30/2017 
TAGS: EFIN EPET KDEM KU PGOV PREL
SUBJECT: MINISTER OF FINANCE ON CABINET RESIGNATIONS, THE 
BUDGET, AND TIP 
 
REF: KUWAIT 989 
 
Classified By: Ambassador Richard LeBaron for reasons 1.4 (b) and (d). 
 
¶1. (C/NF)  Summary:  During a June 30 farewell call with the 
Ambassador, Minister of Finance Bader Meshari Al-Humaidhi 
said resignations of both the Minister of Oil and the 
Minister of Communication were imminent (these occurred later 
in the day).  He was optimistic that Parliament will pass 
long-pending legislation on the Public Private Partnership 
Initiative, also known as BOT, next week.  He said stalled 
tax reforms were his second legislative priority. 
Al-Humaidhi relayed that the GOK will finalize its budget 
next week and is expecting a surplus of KD 5 billion (USD 
17.5 billion).  He also asked about the primary reason for 
Kuwait's Tier 3 ranking in Trafficking in Persons.  The 
Ambassador cited treatment of domestic employees as a key 
concern, encouraging the GOK to seize this opportunity to 
make necessary changes.  The Ambassador urged the GOK to 
tighten restrictions on the flow of illicit funds out of the 
country.  End summary. 
 
Days Numbered for Ministers of Oil and Communications 
--------------------------------------------- -------- 
 
¶2. (C/NF)  Al-Humaidhi told the Ambassador that Minister of 
Oil Shaykh Ali Jarrah Sabah Al-Sabah would not survive the 
June 25 no confidence motion (ref A).  He explained that a 
compromise solution shifting the Minister to another 
portfolio would likely be rejected by the Islamic bloc 
leading the charge for the Minister's resignation.  Minister 
of Electricity and Water Mohammed Abdulla Al-Elaim will take 
over the portfolio in addition to his other duties (comment: 
mostly likely on an acting basis), said Al-Humaidhi, noting 
that he was also considered for the position but "has no 
time." 
 
¶3. (C/NF)  Al-Humaidhi recently spoke with Minister of 
Communications and Minister of State for National Assembly 
Affairs Shireeda Abdullah Saad Al-Mousherji and confirmed 
that Al-Mousherji has indeed submitted his resignation and 
has "no intention of coming back."  Al-Mousherji, a member of 
the Islamic bloc that lead the drive against the Minister of 
Oil (ref A), joined the Cabinet to represent Islamists in 
future government actions.  According to Al-Humaidhi, 
Al-Mousherji now feels that his membership in the government 
is contradictory to his previous alliances and has decided 
that he can no longer wear both hats. 
 
Three Ministers Out In Six Months, 
Al-Humaidhi: "This Cannot Continue" 
------------------------------------ 
 
¶4. (C/NF)  Al-Humaidhi noted that the Islamists are also 
aiming their sights on other ministers, including the 
Minister of Awqaf and himself.  "This is 'democracy,'" he 
said, "but this is not working and has not worked for us for 
the last few years."  Since Liberation, he noted that there 
have been 14 ministers of Commerce and 6 ministers of 
Finance.  Despite these continuing difficulties, he forecast 
that there will be no dissolution of Parliament this summer. 
In the last six months, three ministers have announced their 
resignations, two of whom were members of the ruling family. 
He stressed, however, that the Amir must take a strong stand 
in October when Parliament resumes as "this cannot continue." 
 He said the Amir would likely make a harsh speech at the 
opening of Parliament. 
 
Mixed Forecast for Pending Legislation 
-------------------------------------- 
 
¶5. (C/NF)  Al-Humaidhi said that pending legislation on the 
terms for Public Private Partnership, another name for 
Build-Operate-Transfer or BOT, will be discussed by 
Parliament next week.  He is confident that it will be 
approved despite some opposition.  Al-Humaidhi said passing a 
new tax law was his second priority. 
 
Crack Down on Illicit Money 
--------------------------- 
 
¶6.  (C/NF) The Ambassador cited combating illicit money flows 
as another area where more progress could be made, 
particularly in light of information indicating the continued 
funding of terrorist operations outside of Kuwait. 
Al-Humaidhi asked that the U.S. provide specific information 
if we have it.  "It is very hard to control this," he 
 
KUWAIT 00001025  002 OF 002 
 
 
continued, "but give us information and we will act."  The 
Minister noted the recent arrest of terrorist facilitator 
Jaber Al-Jalahmah, a move the Ambassador applauded. 
 
Budget Surpluses Continue 
------------------------- 
 
¶7. (C/NF)  The GOK will finalize its 2006-2007 budget next 
week.  Unofficial estimates indicate revenues of 
approximately KD 15 billion (USD 52.5 billion) and 
expenditures of approximately KD 10 billion (USD 35 billion), 
resulting in a budget surplus of KD 5 billion (USD 17.5 
billion).  Education will be one beneficiary of this surplus, 
said Al-Humaidhi, describing a program designed to replace 
paper and books with a laptop for every student.  He 
identified spending as an area of continued concern and said 
he would like to see a cut in the government salary bill, but 
that is not an option. 
 
TIP: Why is Kuwait Tier 3? 
-------------------------- 
 
¶8.  (C/NF)  Al-Humaidhi was curious about Kuwait's Tier 3 
ranking in the recently released Trafficking in Persons 
Report, as he described conditions in Kuwait as among the 
best in the GCC.  The Ambassador noted that one of the 
principle factors in the final determination were concerns 
regarding conditions for domestic employees working in Kuwait. 
 
********************************************* * 
For more reporting from Embassy Kuwait, visit: 
http://www.state.sgov.gov/p/nea/kuwait/?cable s 
 
Visit Kuwait's Classified Website: 
http://www.state.sgov.gov/p/nea/kuwait/ 
********************************************* * 
 
LeBaron