VZCZCXRO0884
PP RUEHBC RUEHDA RUEHDE RUEHGI RUEHJS RUEHKUK RUEHLH RUEHPW RUEHROV
DE RUEHKU #0589/01 1431250
ZNR UUUUU ZZH
P 221250Z MAY 08
FM AMEMBASSY KUWAIT
TO RUEHC/SECSTATE WASHDC PRIORITY 1516
INFO RUCNISL/ISLAMIC COLLECTIVE PRIORITY
RHEBAAA/DEPT OF ENERGY WASHDC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY

UNCLAS SECTION 01 OF 04 KUWAIT 000589 
 
SIPDIS 
 
DEPT FOR IO, NEA/ARP 
 
E.O. 12958: N/A 
TAGS: ECIN PREL PGOV EAID ENRG KU
SUBJECT: KUWAIT HOSTS FOURTH WORLD ISLAMIC ECONOMIC FORUM 
 
¶1. Summary: From April 29 to May 1, Kuwait hosted the Fourth 
World Islamic Economic Forum (WIEF).  The event was opened by 
the Amir of Kuwait and was attended by representatives from 
most of the member states of the Organization of the Islamic 
Conference including the heads of state of Jordan, 
Afghanistan, Senegal, and Bosnia.  Senior representatives 
from the Arab League, the GCC Secretariat, the Arab Fund, and 
the Islamic Development Bank also participated.  The 
principal topics were economic reform, energy, economic 
cooperation, poverty reduction, education, and the role of 
the private sector in development.  Breakout sessions also 
covered Small-and-Medium Enterprises, Telecommunications, 
Infrastructure, Education, Tourism, Logistics, 
Entrepreneurship, and Women in Business.  During question and 
answer sessions, a number of participants lamented that these 
fora generally produced lots of positive rhetoric but little 
in the way of concrete action and follow-up.  Several 
participants suggested that a WIEF Secretariat be established 
to track and report on the implementation of the proposals 
and pledges made by participants.  In his keynote address, 
the Amir announced that Kuwait was donating USD 100 million 
for the establishment of a "Fund for Good Living in Muslim 
Countries" intended to provide basic food staples for the 
Muslim consumers most affected by rising food prices.  The 
next WIEF will be held in Jakarta in February 2009. End 
Summary. 
 
 
Opening Remarks by Kuwaiti Amir, Foreign Leaders 
--------------------------------------------- --- 
 
¶2.  In his opening remarks, the Amir of Kuwait Shaykh Sabah 
Al-Ahmad Al-Jaber Al Sabah highlighted the growing global 
food crisis and proposed the establishment of a "Fund for 
Good Living in Muslim Countries" intended to provide basic 
food staples to countries in dire need and contribute to 
development of the agricultural sector.  He announced that 
Kuwait would donate 100 million USD to this fund and called 
on countries, and regional and international organizations to 
support this effort.  He also urged the Islamic countries to 
work together towards raising cross-border investment, 
removing customs barriers, improving infrastructure, 
increasing efficiency of transportation and communications, 
and building a private sector able to lead economic growth in 
Muslim countries. 
 
¶3.  King Abdullah of Jordan spoke of the need for the 
Organization of the Islamic Conference (OIC) to create an 
economic community that can withstand global financial and 
energy shocks and other global challenges.  He bemoaned the 
meager GDP figures posted by the OIC even in this time of 
record-high energy prices.  King Abdullah pointed out that 
the combined OIC GDP is only one-fourth that of Europe and 
less than the GDP of France.  Development in the OIC remains 
incomplete and uneven, he argued, and stressed the importance 
of immediate action to improve education and training 
standards in the OIC.  Arab graduates are leaving the Arab 
world in large numbers, and more than half of those that are 
educated overseas do not return, King Abdullah added.  This 
is creating a shortage of skilled professionals with local 
cultural and national expertise, he stressed, and the OIC 
needs to address this gap in technical education. 
 
¶4.  Other speakers, including FM Wade of Senegal (the current 
OIC President), President Silajdzic of Bosnia and Saudi 
businessman Prince Waleed bin Talal, praised the Kuwaiti 
initiative to alleviate poverty in the Islamic World and 
vowed their support to the Fund proposed by the Amir. 
President Hamid Karzai of Afghanistan highlighted recent 
progress made in Afghanistan and encouraged greater GCC and 
OIC involvement and investment in Afghanistan. 
 
 
The Muslim World as a Burgeoning Market 
--------------------------------------- 
 
¶5.  This session focused on the changing role of the OIC in 
the global economy and the importance of economic cooperation 
among OIC members.  Former British Prime Minister Tony Blair 
encouraged the Islamic countries to open up their economies 
and invest in human capital.  He highlighted the need for 
reform in the public sector and called on the Arab states to 
invest their vast wealth strategically for the future.  He 
also stressed the need for rejecting extremism and 
intolerance that serve as obstacles to economic development 
and open economies. 
 
¶6.  Former Kuwaiti Finance Minister Bader Al-Humaidhi said 
 
KUWAIT 00000589  002 OF 004 
 
 
that most Muslim economies still focused on commodities 
rather than value-added production and services.  The only 
exception to this is the growth of the financial services 
sector, especially in the Gulf, and especially in Islamic 
banking and finance, he argued.  The problem is not lack of 
resources but lack of conviction, leadership, and 
coordination, he stressed. 
 
¶7.  Toyoo Gyoten, President of Japan's Institute for 
International Monetary Affairs, pointed out that the two 
economic pillars of the Islamic world are the Gulf and East 
Asia.  He highlighted the natural symbiotic relationship that 
can be cultivated between the Gulf states and East Asian 
Islamic economies.  Gulf countries can provide the capital 
and East Asian economies can provide the labor and technology 
for a coordinated and mutually beneficial economic 
development framework. 
 
 
The Future of Energy in a Changing World 
---------------------------------------- 
 
¶8.  This panel discussion focused on the changing landscape 
of the energy sector.  Speakers emphasized environmental 
challenges and need for further investment in new energy 
technologies, including both alternative energy and new 
technology for the development of traditional fossil fuel 
resources.  Nader Al-Sultan, former CEO of Kuwait Petroleum 
Corporation, argued that environmental concerns have become a 
critical concern that must be factored into all major 
decisions on energy investment and energy policy.  He added 
that although energy consumption is at an all-time high, 
further poverty reduction and growth in developing countries 
will lead to a further rise in energy consumption in the 
coming years.  Surging energy demand and concerns over supply 
insecurity, combined with the rising cost of investment, is 
driving up energy prices globally.  He suggested that the 
notion of energy independence espoused by some consuming 
nations is just as troublesome and short-sighted as the 
growing phenomenon of resource nationalism among producing 
nations.  Energy independence is a fallacy.  In fact, 
continued interdependence is both desirable and inevitable, 
Sultan argued. 
 
¶9.  Mohammed Al-Olaim, Kuwait's Acting Minister of Oil 
reiterated Kuwait's commitment, made at the November 2007 
OPEC summit, to invest 150 million USD for research in clean 
and environmentally friendly sources of energy.  He added 
that Kuwait is committed to increased investment in research 
and development, especially in new energy technologies. 
Kuwait Petroleum Corporation (KPC) Managing Director for 
Planning Jamal Al-Nouri stated that KPC plans to invest 55 
billion USD over the next five years to further develop 
Kuwait's oil sector with the goal of increasing oil 
production to four million barrels per day by 2020.  He added 
that KPC and Kuwait were acutely aware of the need for 
security in energy supply.  KPC is undertaking ambitious 
plans to contribute to the development of secure energy 
supplies worldwide. 
 
 
Economic Cooperation between the GCC and the Muslim World 
--------------------------------------------- ------------ 
 
¶10.  Experts in this session discussed the need for greater 
cooperation within the OIC, especially between the GCC and 
the rest of the Islamic world.  Abdullah Bishara, former 
Secretary General of the GCC, gave a general overview of the 
GCC's role in fostering development in other Islamic 
countries.  He explained that between 2005 and 2008, the 
Kuwait Fund, Saudi Arabia Fund and Abu Dhabi Fund have given 
significant sums in grants, soft loans and technical 
assistance to 47 Islamic countries around the world.  He 
continued that as a result of swelling liquidity provided by 
high oil revenues, GCC private sectors are also diversifying 
their investments into real estate, tourism, banking and 
financial services, particularly in Asia and Africa. 
 
¶11.   Jassim Al-Mannai, the Director General of the Arab 
Monetary Fund highlighted the challenges faced by foreign 
workers, mostly from Islamic countries, in GCC countries. 
One of the most significant challenges is the difficulty 
faced by many of these workers in sending remittances to 
their home countries.  Remittances, he argued, provide a 
influx of between 27 and 30 billion USD to countries in Asia 
and Africa.  Due to the high cost of transferring these 
remittances, many workers are resorting to dangerous and 
illegal means transferring funds, he added.  He encouraged 
 
KUWAIT 00000589  003 OF 004 
 
 
governments in the Islamic world to cooperate to make 
remittances easier and cheaper. 
 
 
The Role of Investment in Poverty Reduction 
------------------------------------------- 
 
¶12.  Discussion in this session focused mainly on the ongoing 
global food crisis and the impact of the US housing crisis on 
the global economy.  Shaykh Dr. Mohammed Al-Sabah, Kuwaiti 
Minister of Foreign Affairs highlighted the need to alleviate 
poverty and starvation, especially in Africa and Asia.  He 
referred to UN Secretary General Ban Ki Moon's call for 
donations from rich countries towards UN poverty alleviation 
funds.  Dr. Amado Cisse, Vice President of the Islamic 
Development Bank, highlighted the progress made in relatively 
small economies like Thailand, Malaysia and Vietnam.  He 
argued that the success of these economies shows that 
sustained private sector-led growth supported by an 
attractive investment climate is "a tried and true way out of 
poverty." 
 
¶13.  Meanwhile, Director General of the Arab Fund for 
Economic and Social Development Abdulatif Al-Hamad referred 
to the rising cost of living in Islamic countries due to the 
global food crisis.  He stated, however, that the Arab World 
was far better off, in terms of poverty, than much of the 
rest of the world.  In his closing remarks he urged Islamic 
countries, especially the GCC countries, to find effective 
ways to ensure that development strategies and investment 
policies contribute to human development, social progress, 
and poverty eradication. 
 
 
Education and Development in the Islamic World 
--------------------------------------------- - 
 
¶14.  This panel focused mainly on the need for reform in Arab 
education systems.  Kuwaiti Education Minister Dr. Nouriya 
Al-Sabih mentioned that Kuwait is investing 1.5 billion 
Kuwaiti Dinars (KD) or 5.8 billion USD in facilities, 
technology development and teacher training.  Kuwait has 
hired a British company to develop new math and English 
curricula for Kuwaiti schools, she added.  Dr. Hasan 
Al-Ebraheem of the Kuwaiti Society for the Advancement of 
Arab Children spoke about three general areas of focus: 
sustainable development; promotion of peace, human rights, 
and democracy; and educational standards and teacher 
qualifications.  Combating computer illiteracy should also be 
a priority in Arab countries, he suggested. 
 
¶15.  Dr. Farhan Nizami of the Oxford Center for Islamic 
Studies commented on the need for a collaborative effort in 
the Islamic World to develop a coordinated mechanism to fund 
educational research in these countries.  The Islamic world 
is falling behind in educational and scientific research, she 
stressed.  Dr. Abdel Osman of UNESCO pointed to the vast 
disparities in income, average age and education standards in 
Islamic countries.  He added that the only commonality 
between these countries was the tremendous need for more 
investment in education and literacy programs. 
 
 
The Private Sector Role in Development 
-------------------------------------- 
 
¶16.  This session focused on the predominance of the public 
sector in most Islamic countries, especially in Arab 
countries.  In most Arab countries, Tarek Sultan of Agility 
Logistics claimed, the public sector is the primary 
facilitator of economic development.  The private sector is 
relegated to specific, narrow segments of the economy mainly 
because Arabs trust their governments more than the private 
sector.  Tunisian Finance Minister Mohammed Kashesh explained 
the critical role that the private sector is starting to play 
in the Tunisian economy.  He said the main area where the 
private sector can play a key role is in training and 
development.  The Tunisian economy is growing due to private 
sector entrepreneurship and innovation, but the government 
needs to facilitate such enterprises through progressive laws 
and regulations, he added. 
 
¶17.  Olive Kigongo of the Uganda Chamber of Commerce 
highlighted the important role of the private sector in 
Uganda.  Public-private partnerships in economic development 
are crucial to development in Uganda and in other Islamic 
countries, she stressed.  Ian Buchanan of Booz Allen Hamilton 
used development in Singapore as a case study for private 
 
KUWAIT 00000589  004 OF 004 
 
 
sector development.  He noted that Singapore,s rapid 
development had resulted from the proactive vision of the 
government to develop Singapore's economy through reforms and 
incentives for private sector innovation.  Singapore reacted 
to the world economy and to its own comparative advantages by 
inviting private sector investment not just in large projects 
and services, but also in the development of human capital. 
The government provided tax credits and incentives to foreign 
corporations to invest in adult continuing education, 
especially in technical and professional areas.  Indonesia, 
Malaysia and other Islamic countries are starting to follow a 
similar pattern, he added. 
 
 
Concluding Remarks by Indonesian President Yudhoyono 
--------------------------------------------- ------- 
 
¶18.  President Yudhoyono emphasized the need for solidarity 
within the Islamic world and for more economic cooperation 
between the GCC and the East Asian Islamic States.  He spoke 
of the important role of Indonesia as the largest Islamic 
country.  He stressed that development in Indonesia is a sign 
that Islamic countries all over the world can develop and 
advance, not just in the Middle East.  He urged the Arab 
countries to look to East Asian Islamic states to pursue 
opportunities for investment and trade.  Countries like 
Malaysia and Indonesia have a lot to offer to the Arab World, 
he said, in investment opportunities, food and agricultural 
products, and human resources.  He added that the rise in 
popularity of Halal food products would contribute greatly to 
the growth of the Indonesian economy over the next few years. 
 
¶19.  The President also encouraged the Arab countries to 
visit Indonesia to enjoy its hospitality and natural beauty. 
He announced that Indonesia will host the fifth World Islamic 
Economic Forum in Jakarta in February 2009.  He stressed that 
Indonesia is eager to host the WIEF to showcase Indonesia,s 
growing economy, its resources - both natural and human - and 
its beauty that has attracted large-scale tourism in recent 
years. 
 
********************************************* * 
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/ 
********************************************* * 
JONES