US embassy cable - 03KUWAIT4798

C O N F I D E N T I A L SECTION 01 OF 02 KUWAIT 004798 
 
SIPDIS 
 
E.O. 12958: DECL: 10/20/2013 
TAGS: EAID, EINV, EFIN, PREL, KU, IZ 
SUBJECT: (C) KUWAIT FM SAYS GOK'S IRAQ PLEDGE WILL BE 
SUBJECT TO PARLIAMENTARY APPROVAL 
 
REF: SECSTATE 294287 
 
Classified By: Ambassador Richard H. Jones, reasons 1.5 b and d. 
 
1. (C) The Ambassador met with Kuwaiti Foreign Minister 
Shaykh Dr. Mohammed al-Sabah at the airport on October 20, 
immediately prior to the FM's departure for visits to Poland, 
Hungary and Spain, where he will represent Kuwait at the 
October 23-24 Madrid conference.  This was the first 
opportunity to meet with Dr. Mohammed since receipt of reftel 
due to his participation in the OIC Summit and events 
surrounding the opening of the fall session of the National 
Assembly. 
 
2. (C) The Ambassador began the meeting by reviewing the 
Secretary's oral message on Madrid with Dr. Mohammed.  (See 
 
SIPDIS 
paragraph 5 for the text, as amended at post to take into 
account the situation in Kuwait.)  Dr. Mohammed listened 
carefully and then briefed the Ambassador on the state of 
play for Kuwait's Madrid pledge.  He said that Kuwait intends 
to provide significant assistance to Iraq.  This assistance 
will be both short-term and medium-term in nature.  It will 
be a mixture of grants and traditional development assistance 
provided through the Kuwait Fund for Arab Economic 
Development.  In addition, there will be an important private 
sector component.  He indicated that this would largely take 
the form of the Kuwait Investment Authority's (KIA) 
participation in Iraq focused investment funds that have 
recently been created by two local companies (Global 
Investments and the National Bank of Kuwait).  Unfortunately, 
he said, all of Kuwait's plans must be contingent upon 
approval by the National Assembly, which only resumed work 
today after its summer recess.  Although the GOK has already 
consulted with the Speaker of the Assembly, his deputy and 
members of key committees, out of deference to the 
legislative branch it would not yet be able to quote a 
specific figure in Madrid.  He noted that there was a 
precedent for this in 1994 when Kuwait took part in a 
conference on aid to the Palestinians but was unable to make 
a specific pledge for the same reason. 
 
3. (C) During the ensuing discussion, Dr. Mohammed expressed 
considerable concern about Saudi Arabia's attitude toward the 
conference.  In discussions on the margins of the OIC Summit, 
he had picked up that the SAG would not provide assistance to 
Iraq until there was an internationally recognized Iraqi 
government in place.  He found this extremely disappointing 
and doubted that Saudi FM Prince Saud al-Faisal would take 
part in the Madrid conference.  The Ambassador agreed that, 
unfortunately, these impressions squared with his own. 
 
4. (C) The Ambassador also engaged Dr. Mohammed in a 
discussion of Kuwait's plans to foster greater Kuwaiti 
private sector participation, at Madrid and in the 
reconstruction process itself.  Dr. Mohammed confirmed that 
he had already talked to the "usual suspects" in the Kuwaiti 
private sector about the issue and would encourage them to 
take part in the October 23 private sector meeting.  He also 
noted that the GOK was considering having KIA undertake an 
OPIC-style investment insurance program for private sector 
investments in Iraq.  Finally, he indicated that the GOK 
would look favorably on proposals for offset projects 
involving American, Kuwaiti and Iraqi firms, noting that 
discretionary authority already exists under Kuwait's offset 
program for investments outside of Kuwait to qualify for 
offset credit. 
 
5. (C) Begin Text of Secretary's Oral Message as Delivered to 
FM Shaykh Dr. Mohammed al-Sabah: 
 
The adoption of UN Security Council Resolution 1511 on 
October 16, 2003, is a victory for the future of Iraq. 
 
The resolution reflects the strong consensus of the 
international community: Iraq's reconstruction and 
stabilization merit our sustained support. 
 
This council action should serve as a catalyst for each of us 
to consider carefully what additional steps we can take to 
contribute to Iraqis' efforts to reconstruct their 
country. 
 
Treasury Secretary Snow and I will be in Madrid for the 
Donors Conference on Iraq, October 23-24.  So too will 
members of the Iraqi Governing Council and several key Iraqi 
interim ministers. 
 
I appreciate your personal commitment as reflected by your 
decision to join us in Madrid.  Your presence will send a 
tangible symbol to the Iraqi people of the international 
community's long-term commitment to Iraq's economic 
development. 
 
To accelerate Iraq's recovery, I hope that you would be able 
to announce in Madrid a substantial bilateral contribution to 
this effort for both the short-term and medium-term needs 
identified in the World Bank/UN reports. 
 
I also urge you to ensure that Kuwait's private sector is 
well represented at the private-sector meeting which will 
take place on October 23.  Kuwait's invitation to this 
meeting was extended through H.E. Minister of Finance 
Al-Nouri by the Spanish government some time ago.  I 
understand the invitation has been forwarded to the Kuwait 
Chamber of Commerce and Industry to nominate a representative 
delegation. 
 
No matter what Kuwait's contribution, your presence will 
matter.  Secretary Snow and I look forward to seeing you in 
Madrid on October 24th to coordinate our collective 
contributions to Iraqi efforts to forge a better future. 
 
End text of oral message. 
 
6.  (U) Baghdad minimize considered. 
 
 
JONES