CONFIDENTIAL
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30
MDHIAN
EMBARK ON ITS NEXT FIVE-YEAR PLAN AND THEY WERE UNSURE WHETHER THEY WOULD HAVE THE NECESSARY FUNDS BECAUSE OIL PRICES WERE SO VOLATILE. WHILE AGREEING THAT OIL PRICES LOOKED HIGH AT THE MOMENT, HE SAID THAT IN REAL TERMS THEY WERE BRINGING IN ONLY THE SAME REVENUE AS IN 1985 BECAUSE OF THE DEVALUATION OF THE DOLLAR. HE BELIEVED THAT ONCE THE PRESENT CRISIS WAS OVER OIL PRICES WOULD SLUMP AND, HE ASKED, WHO
WOULD HELP OMAN THEN.
5.
ZAWAWI ALSO SHOWED A KEEN INTEREST IN WHAT QATAR AND THE UAE WERE CONTRIBUTING. I MENTIONED THAT QATAR HAD CANCELLED THE DEBTS OF SOME DEVELOPING STATES SUFFERING FROM THE EFFECTS OF SANCTIONS. HE SAID OMAN COULD NOT DO THAT AS IT COULD NOT AFFORD TO EXTEND LOANS IN THE FIRST PLACE. HE ADDED THAT OMAN WAS ALSO SUFFERING FROM THE EFFECTOF SANCTIONS THROUGH EG THE LOSS OF MARKETS FOR ITS FRUIT AND VEGETABLES
IN KUWAIT AND THE HIGHER PRICES IT HAD TO PAY FOR IMPORTS AS A RESULT OF HIGHER FREIGHT RATES. HE ASKED WHAT THE UAE WERE DOING. I SAID I BELIEVED THEY WERE PROVIDING FREE FUEL AND CASH CONTRIBUTIONS (GRATEFUL FOR ANY DETAILS I COULD PASS TO ZAWAWI YOUR TELNO 302 IS NOT SPECIFIC).
COMMENT
6. ZAWAWI IS CLEARLY UNDER INSTRUCTIONS FROM THE SULTAN TO HELP US BUT AS KEEPER OF THE PURSE STRINGS AND KNOWING THE CURRENTLY HIGH EXPECTATIONS OF THE VARIOUS MINISTRIES HE IS RELUCTANT TO PAY OUT MORE THAN HE CAN HELP. HE MAY ALSO SEE SOME INCONSISTENCY IN THE FACT THAT, UNLIKE OTHER GULF STATES, OMAN IS A RECIPIENT OF BRITISH DEVELOPMENT AID.
CLARK
YYYY
ΜΑΙΝ
IRAQ/KUWAIT
LIMITED
ADDITIONAL
44
IRAQ/KUWAIT
232
(PASSED TO EMERGENCY UNIT)
NNNN
DISTRIBUTION
276
MED
ERD
PAGE
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CONFIDENTIAL
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