US embassy cable - 03KUWAIT5103

C O N F I D E N T I A L SECTION 01 OF 02 KUWAIT 005103 
 
SIPDIS 
 
STATE FOR NEA/ARP, NEA/NGA 
USDOC FOR 3131/USFCS/OIO/ANESA 
 
E.O. 12958: DECL: 11/04/2013 
TAGS: ETRD, EINV, PREL, KU, IZ 
SUBJECT: (SBU) NEIGHBORS FOREVER: AMBASSADOR DISCUSSES 
MADRID, IRAQI ECONOMIC DEVELOPMENT WITH KUWAIT CHAMBER OF 
COMMERCE 
 
REF: KUWAIT 5057 
 
1. (SBU) Summary: The Ambassador met with the Chairman of the 
Kuwait Chamber of Commerce and Industry's (KCCI) Finance and 
Investment Committee, Mr. Faisal Al-Mutawa, on November 3. 
Conversation centered on the immediate GOK reaction to the 
recent Madrid Donors' Conference and KCCI and GOK efforts to 
engage Iraqi businessmen, including plans for an upcoming 
conference in Kuwait.  End Summary. 
 
Madrid and the next steps 
 
2. (SBU) The Ambassador met with businessman and KCCI Finance 
and Investment Committee Chairman, Faisal Al-Mutawa, on Nov. 
3.  Mr. Mutawa was a member of the Kuwaiti delegation to the 
private sector meeting on the margins of the Madrid Donors 
Conference, and is actively involved in advising Prime 
Minister Shaykh Sabah Al-Ahmed Al-Sabah on how to best apply 
the remaining $500 million of Kuwait's $1.5 billion Madrid 
pledge.  Mutawa characterized the Madrid Conference as a 
success and said the highlight for him had been the warm 
reception extended to the Kuwaiti delegation by the Iraqis, 
who had repeatedly expressed their gratitude to the 
delegation for Kuwait's public support of Iraq.  Mutawa noted 
that there were strong political and economic advantages for 
both Kuwait and Iraq in extending and cementing commercial 
ties between the two neighbors, adding that the delegation 
had returned from Madrid optimistic about Kuwait's ability to 
play a positive role in Iraq. 
 
3. (C) As for how to apply the remaining $500 million of 
Kuwait's pledge, Mutawa said a close group of advisors, he 
amongst them, had met with the PM previously that day and had 
urged the GOK to invest the funds in high visibility projects 
in Iraq, such as universities, hospitals and schools.  He 
said this would be the best first step in attempting to 
repair the distorted image of Kuwait fed to Iraqis during 
Saddam's rule.  "These are our neighbors forever," he added. 
Mutawa said that while none of the specific projects had yet 
to be determined, the PM had decided that Kuwait would donate 
rather than loan funds, in order to maintain control over 
their use in Iraq. 
 
4. (C) In response, the Ambassador said FM Shaykh Dr. 
Mohammed Al-Sabah had told him the GOK would seek to fund 
projects that link Iraq to the GCC.  One such suggested 
project was the establishment of a railway linking Basra 
(which is already linked to Europe through Baghdad) to Kuwait 
and the UAE (see reftel). 
 
Encouraging Private Sector Investment in Iraq 
 
5. (SBU)  Calling the situation in Iraq a "golden 
opportunity" for Kuwait, Mr. Mutawa said the Kuwaiti 
delegation to Madrid had spoken with their Iraqi counterparts 
and developed a plan to hold a conference in Kuwait to bring 
together Iraqi entrepreneurs and Kuwaiti financiers.  In 
addition, the delegation agreed in principle to the 
establishment of GOK-sponsored political risk insurance (much 
like OPIC) for Kuwaitis willing to invest their money in 
Iraq. 
 
6. (C) Mutawa said a committee consisting of representatives 
of many sectors of Kuwaiti society would be meeting on 
November 8 to discuss these proposals and develop written 
recommendations for further GOK action (Note: Mutawa 
mentioned the committee would consist of himself, the 
Minister of Finance, Foreign Minister, MP Dr. Nasser Al-Sane, 
businessman Hussein Kharafi, Dr. Yousef Ibrahim and Fawzi 
Sultan. End Note.).  Mutawa stressed that decisions on both 
private and public sector investment in Iraq would be much 
more successful if Iraqis were involved in the 
decision-making process, a belief he added was also shared by 
PM Sabah.  Accordingly, Mutawa said, PM Sabah had made clear 
that GOK would seek advance Iraqi Governing Council (IGC) 
approval for any GOK-sponsored projects it undertook in Iraq. 
 When asked by the Ambassador about the political feasibility 
of these proposals, Mutawa replied that the National 
Assembly, "with the exception of a few" members, could be 
expected to support them. 
 
7. (C) Comment: The proposed conference is a step in the 
right direction and proffers hope that Iraq may utilize the 
readily available expertise and capital of its neighbors to 
help kickstart its economy.  Kuwaitis, for their part, are 
excited at the prospect of increased economic cooperation, 
not only because they see financial opportunities in Iraq, 
but because they understand that the economic stability of 
Iraq is intertwined with their own national interests. 
JONES