VZCZCXRO6801
PP RUEHDE RUEHDIR
DE RUEHMK #0089/01 0441110
ZNY CCCCC ZZH
P 131110Z FEB 08
FM AMEMBASSY MANAMA
TO RUEHC/SECSTATE WASHDC PRIORITY 7590
INFO RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE PRIORITY
RHBVAKS/COMUSNAVCENT  PRIORITY
RHMFISS/HQ USCENTCOM MACDILL AFB FL PRIORITY
RHEHNSC/NSC WASHDC PRIORITY

C O N F I D E N T I A L SECTION 01 OF 02 MANAMA 000089 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 02/13/2018 
TAGS: PGOV ECON KDEM BA
SUBJECT: BAHRAIN'S CROWN PRINCE CONSOLIDATING HIS AUTHORITY 
 
REF: IIR 6 960 0007 08 DTG 160613Z JAN 08 
 
Classified By: Ambassador Adam Ereli for reasons 1.4 (b) and (d).

1.(C) Summary: Bahrain's King appears to be working to ensure a smooth succession for the Crown Prince. After elevating the Crown Prince to Deputy Supreme Commander of the military and restructuring the chain-of-command (reftel), the King sided publicly with him against the Prime Minister on the issue of economic reform. Many in Bahrain have concluded the King has begun to gradually sideline the wily Prime Minister and his old-guard coterie. End summary.

2.(C) Following a series of royal decrees that removed the Prime Minister and his loyalists from the military chain of command (reftel), King Hamad sided with the Crown Prince in a pointed exchange of letters made public on January 15.Economic Development Board (EDB) insiders report that the Crown Prince spoke to the EDB Board of Directors on January 14 in his capacity as Chairman, and delivered stinging and thinly-veiled criticism of Prime Minister Khalifa bin Salman. The Crown Prince reportedly complained angrily that disharmony and a lack of cooperation between the EDB and certain unnamed government ministries was unacceptable, citing three specific examples to make his point. The Crown Prince accused the Prime Minister of financing surrogates to undercut struggling national carrier Gulf Air, colluding with business leaders to diminish the effect of labor reforms, and negating the EDB's "one stop shop" for foreign investors by using the Cabinet to impose additional layers of bureaucracy.

3.(SBU) In an open letter to his father published in local newspapers on January 15, the Crown Prince said that red tape in some government departments was responsible for blocking Bahrain's economic progress. In his response, published simultaneously, the King wrote that any Minister obstructing the EDB's economic reform efforts risked losing his job. The King also reiterated in his letter that the EDB (and by extension EDB's Chairman, the Crown Prince) remained the final authority on economic policy. The Prime Minister, thus outmaneuvered by the Crown Prince, did the only thing he could do and quickly issued a statement directing all Ministers to cooperate fully with the EDB.

4.(C) The Crown Prince clearly viewed the episode as a victory. When Ambassador called on him January 17, the Crown Prince chuckled at one point, "So, I guess you heard what happened at the EDB the other day."

5.(C) Most observers agree that the Crown Prince has scored some points against his uncle, the Prime Minister. For example, Shi'a MP and Al-Wifaq bloc member Jassim Hussein told poloff January 18 that the public nature of the King's exchange with the Crown Prince was significant for its rarity, and that the King seemed to have decided that the time had come to begin moving the Prime Minister to the side. Similarly, Deputy Prime Minister Jawad Al-Arrayedh, who, though one of the Prime Minister's men, has always been frank with the American Embassy, told Ambassador on January 24 that he believed the exchange of letters was intended to incrementally decrease the Prime Minister's influence, adding that the Prime Minister was too old and too ingrained in the tribal means of maintaining stability to adapt to new ways of doing things. Al-Arrayedh believed that the Crown Prince and his generation had earned the right to guide public policy, saying, "They're flying F-16s. I think they can handle it." Another embassy contact went out of his way to emphasize the importance of what had happened by pointing out to Ambassador that the only other public exchange of letters by top-ranking GOB officials took place in 1975 when Prime Minister Khalifa complained to the then-Amir Isa that the Parliament had become unmanageable. Isa dissolved Parliament the next day.

6.(C) Interestingly, the Crown Prince chose to make his move only after the Prime Minister's January 13 departure for an official visit to Thailand. Aside from the directive to support the EDB, the Prime Minister and his allies within the government remained uncharacteristically quiet in the wake of the King's letter, prompting some to suggest that he had been wrong-footed. Indeed, the Prime Minister extended his stay in Thailand several times, and remained there as of February 13.

7.(C) In the final stroke of what some local observers have breathlessly called a bloodless coup, the Crown Prince announced February 7 the appointment of all of the cabinet's economic and technical ministers to the EDB Board of Directors, essentially annexing the Prime Minister's cabinet into his own, parallel government. MANAMA 00000089 002 OF 002

8.(C) Comment: In the course of five short weeks the Crown Prince, in public ways, asserted important new influence over both the military and over economic policy. These were fields in which he was already calling most of the shots, but the public confirmation of his leading role is important. He appears now to be second only to his father, the King, when before many believed the Prime Minister was number two.

9.(C) Comment continued: The Prime Minister's ability to stymie economic reform and to influence military policy is diminished, but he remains a powerful figure within the government and the ruling family. It will be interesting to see whether he attempts to reassert himself when he deems the conditions are right. The Prime Minister is an astute politician who understands well the intricacies of intra-family and tribal relationships. He remains a master at working a room, while his nephew the Crown Prince clearly lacks the common touch that goes so far in this still-traditional society. King Hamad may still need the Prime Minister to maintain consensus within the Al-Khalifa clan and, by extension, control the country. In many ways, the Prime Minister represents the last of the old lions, while the Crown Prince and his circle of technocrats are Bahrain's future. King Hamad finds himself between the two, understanding that reform is critical to Bahrain's success, but unable to turn his back on tradition and the stability it provides. End comment. ********************************************* ******** Visit Embassy Manama's Classified Website: XXXXXXXXXXXX********************************************* ******** ERELI