Interpreting Middle East Economic News and Analyzing Market Trends

“Kuwait, ‘the back office of logistical support’ for Syria’s rebels”

This was the headline of a recent article in The National newspaper of the UAE.  Kuwait has stayed out of the spotlight for much of the Arab Spring, unlike its neighbours Qatar and Saudi Arabia.  Both Qatar and Saudi Arabia have been very vocal and very active in the uprisings across the Middle East, and especially involved in Libya and Syria.  Kuwait, on the other hand, has kept a low profile until recently.  It seems to have taken a much more active role in Syria as The National reports:

To many observers, Kuwait’s decision to host a United Nations meeting last week to raise humanitarian aid for Syrians – and its pledge of US$300 million to the effort – were the most overt steps that the country has yet taken to get involved in the crisis.

Until then, Kuwait had appeared largely absent from regional diplomacy on the crisis, while Qatar has funded and hosted the political opposition to Mr Al Assad and Saudi Arabia has reportedly sent arms to anti-regime fighters.

Yet interviews with aid organisations and officials suggest Kuwait has played a no less pivotal role than its Gulf Arab neighbours during the 22-month uprising. This country of 2.6 million people has emerged as a central fund-raising hub for direct financial support to insurgents fighting the Assad regime and for humanitarian aid to rebel-controlled areas, which are said to encompass slightly more than half of the country.

The exact amount of lethal and non-lethal aid channeled through Kuwait to Syria since mid-2011 is difficult to determine, but humanitarian assistance alone is believed to run into the tens of millions of dollars.

The level of humanitarian help is expected to increase in the coming months. The day before the official UN conference, dozens of charities met separately and pledged $182 million in assistance for Syria. One organisation, the Kuwaiti-based International Islamic Charitable Organisation raised $2.7 million in just a two-day telethon that coincided with the UN gathering.

Most of the aid collected in Kuwait for Syria is bypassing the United Nations and its myriad aid agencies. The reason is simple: the destination.

At the UN donor conference last week, international officials raised concerns about their ability to deliver humanitarian supplies to rebel-controlled areas. Lacking the connections and trust, their convoys are often turned back.

Not so with many of the Kuwaiti charities and their local partners, who say that they have been able to transport wheat, blankets, heaters and other supplies to rebel-controlled areas by working with local partners and using their longstanding ties to Syria.

We will not give our money to any country or to the UN,” said Bader Burahmah, president of the charity Al Rahma International, through a spokesman authorized to speak on his behalf. “People want to know how and to whom their money is going.”

Al Rahma urges aid recipients to take photos of the supplies they get. It also asks for receipts documenting every financial transaction and, as much as possible, send back receipts for every financial transaction along the way.

Civilians are not the only beneficiaries of aid streaming from Kuwait.

For the past year, Hajjaj Al Ajmi, a Kuwaiti cleric, has raised money to “support the mujahedeen” in Syria, announcing his fund-raising efforts on Twitter, complete with addresses and telephone numbers. His endeavours have won him, via a YouTube video, the gratitude of anti-Assad rebels.

  Kuwait is not new to taking sides in a conflict.  It has been a supporter of Palestinians since the 1960s, supported the mujahedeen in the 80s, played both sides in the Iran-Iraq War, and even played the US against the USSR during the Cold War.  What is new is its emergence into the game again.  The government did have to crack down on extremist groups, some of whom were the result of Kuwaiti fighters returning from Afghanistan. The government has tried to clamp down on individuals and groups rushing off to fight in foreign lands.  They did have some success in this, but Kuwait fighter ‘volunteers’ still managed to find their way to Boznia and Afghanistan up until 2001.  Since then, the government has taken an even more active role in limiting the role of Kuwaitis in conflicts abroad.  This is what makes this story interesting.  Also, as a result of the clamp down since 2001, the Kuwaiti government has made a solid effort in tracking where charity money goes.  This story seems to suggest that these rules have been relaxed.  Here’s more from The National:

 

Humanitarian aid groups insist they do not allow lethal and non-lethal aid to mix. But the same factors have made Kuwait an ideal location for both kinds of assistance efforts to flourish.

Kuwait has a liberal attitude towards independent organisations and charities, with some 80 non-governmental organisations.

“Kuwait has its own uniqueness in terms of freedoms – to give, to work in helping others,” said Dr Sulaiman Shamsadeen, general manager of the International Islamic Charitable Organization, which has an annual budget of $100 million.

Kuwait’s social structure has helped, too.

Mr Ajmi’s fund-raising, for example, has benefited from tribal and family dynamics in Kuwait, said Noman Benotman, who directs the Quillam Foundation and monitors financing to the Syrian opposition.

Fund-raisers for Syria have become like “public events” in Kuwait, each one focused on a particular tribe’s ability to raise money, which in turn sparked friendly competition over which tribe can raise more, explained Mr Benotman, one of thousands of Gulf Arabs who went to fight the Soviet forces in Afghanistan in the 1980s.

Kuwait’s banking regulations – or more accurately, the looseness of those regulations – have made it an attractive conduit for funneling money to Syria.

Other Gulf countries, in particular, Saudi Arabia, have closely monitored the scope of their citizens’ involvement in the Syrian crisis, leading activists and fund-raisers from around the Gulf to take advantage of a banking system that is, in the words of one Western diplomat, “not particularly robust.”

  Leave it to a Western diplomat to comment on how a banking system in a non-Western country is “no particularly robust.”  This must be due to the fact that the banking system in the West is so robust.  Here are a few recent articles on the robustness of the banking system in Europe and the US:

Is ‘too big to fail’ actually ‘too big to jail’? – PBS Frontline

Too Big To Jail? The Top 10 Civil Cases Against the Banks – Voice of Russia

HSBC Judge Urged to Approve $1.9 Billion Drug-Cash Accord – Bloomberg

With RBS Settlement, Legal Tab for Banks Grows and Grows – New York Times

 

Read the full article from The National titled “Kuwait, ‘the back office of logistical support’ for Syria’s rebels.