US embassy cable - 05KUWAIT1976

S E C R E T SECTION 01 OF 05 KUWAIT 001976 
 
SIPDIS 
 
NOFORN 
 
FOR NEA/FO, NEA/I, NEA/ARPI; LONDON FOR GOLDRICH 
 
E.O. 12958: DECL: 05/11/2015 
TAGS: PREL, PHUM, PGOV, MARR, ECON, EAID, CVIS, IZ, KU, TERRORISM 
SUBJECT: BACKGROUND ON KEY ISSUES FOR THE WASHINGTON VISIT 
OF KUWAITI FM SHAYKH DR. MOHAMMED AL-SABAH 
 
REF: A. KUWAIT 1947 
     B. KUWAIT 1913 
     C. KUWAIT 1908 
     D. KUWAIT 1907 
     E. KUWAIT 1900 
     F. KUWAIT 1884 
     G. KUWAIT 1863 
     H. KUWAIT 1777 
     I. KUWAIT 1752 
     J. KUWAIT 1729 
     K. KUWAIT 1594 
     L. KUWAIT 1542 
     M. KUWAIT 1501 
     N. KUWAIT 1295 
     O. KUWAIT 1201 
 
Classified By: Ambassador Richard LeBaron for reasons 1.4 (b) and (d) 
 
1. (C) Summary:  Kuwaiti Foreign Minister Shaykh Dr. Mohammed 
Sabah Al-Salem Al-Sabah will arrive in Washington May 17, in 
advance of an anticipated July visit by the Prime Minister. 
Shaykh Dr. Mohammed's visit follows his participation in the 
Arab-South America Summit held in Brazil, and planned return 
to Kuwait for the May 16 vote on women's participation in 
Municipal Council elections.  Following a strategy laid out 
by Prime Minister Shaykh Sabah Al-Ahmed Al-Jaber Al-Sabah 
after the liberation of Iraq, Kuwait continues to seek the 
strengthening of its economic and commercial ties with 
strategic partners, and the Foreign Minister will want to 
discuss Kuwait's progress towards a FTA.  Kuwaiti fuel for 
OIF, which involved lengthy negotiations, may be raised in 
the context of security cooperation and GOK support for U.S. 
strategic presence in the region.  The Minister will welcome 
reaffirmation of Kuwait's importance as a valued and trusted 
ally.  Key topics for U.S. interlocutors include regional 
cooperation; counterterrorism; and democracy and human rights 
issues such as women's suffrage, trafficking in persons, and 
MEPI.  Another priority is increasing the numbers of Kuwaiti 
students studying in the United States.  End Summary. 
 
U.S.-Kuwait TIFA 
---------------- 
 
2. (C) Kuwait and the U.S. signed a Trade and Investment 
Framework Agreement (TIFA) in February 2004, and held the 
first TIFA Council meeting in Washington in May 2004.  Absent 
significant progress by the Kuwaitis, however, USTR has been 
reluctant to schedule a second Council meeting. The GOK 
contends it has made significant progress and is pushing hard 
for a second meeting.  Also behind the GOK desire for a 
second meeting is its embarrassment that Oman and the UAE -- 
which both signed TIFAs after Kuwait -- are in FTA 
negotiations, while Kuwait has had just one TIFA Council 
meeting. 
 
3. (C) A USTR representative traveled to Kuwait March 16-17, 
2005, and met with members of Kuwait's TIFA team to assess 
Kuwait's progress since the inaugural TIFA Council meeting 
(ref N).  During the talks, it became clear that little 
reform has been achieved.  Many of the proposals the GOK has 
made to open its economy are still in the development stage 
with line ministries; other draft laws languish with a 
Parliament that has shown little willingness to buy into the 
GOK's liberalization vision.  The Kuwaiti team was also 
reluctant to allow the USG or industry groups to review draft 
legislation before submission to the National Assembly, thus 
missing a good opportunity to ensure that the laws meet FTA 
criteria and will not require additional changes. 
 
4. (C) The GOK seems to be under the misimpression that even 
without significant economic change, Kuwait will be given an 
FTA because it is a key U.S. ally.  The Embassy and 
Washington agencies have tried to dispel this view and have 
clearly told the GOK that it will need to make measurable 
progress in a number of areas before we can move forward.  It 
would be extremely useful to reinforce with the Foreign 
Minister that Kuwait must bring its laws into compliance with 
its WTO commitments.  Specific steps that must be taken 
include:  (a) elimination of the International Conformity 
Certification Program  (ICCP), which the U.S. considers a 
technical barrier to trade; (b) significant improvement in 
Kuwait's poor intellectual property rights protection record 
(Kuwait is on the Special 301 Priority Watchlist again for 
2005); and (c) increased protection for labor and respect for 
ILO conventions.  We should at the same time make it clear 
that the USG wants to see negotiations succeed and that we 
will supply technical assistance as needed through MEPI and 
other channels.  The Ambassador has also urged the GOK to 
appoint (and empower) a senior figure to coordinate the GOK 
side and interact more effectively with U.S. agencies. 
 
OIF/AIK Fuels 
------------- 
 
5. (C) From December 2002 - December 2004, Kuwait provided 
nearly $2 billion in free fuel for U.S. and Coalition Force 
use in Operation Iraqi Freedom (OIF) and as Assistance in 
Kind (AIK) for Kuwait-specific activities under the Defense 
Cooperation Agreement (DCA).  Through March 2004 this 
assistance was permitted by GOK wartime appropriations. Since 
April 1, 2004 the Kuwait Petroleum Corporation (KPC) has 
covered the fuel deliveries with a no-cost contract 
retroactively signed in December 2004.  The GOK is now 
requesting payment for OIF fuel deliveries  (approximately 
800,000 gallons per day) made since January 1, 2005.  DOD has 
accepted a Kuwaiti offer of heavily subsidized fuel for OIF 
($24 per barrel for jet fuel), but details of how this 
agreement will be implemented have not been ironed out.  The 
GOK affirms its obligation to absorb the cost of AIK fuel 
(used in Kuwait by U.S. forces) as provided for in the DCA, 
but has withheld deliveries since January 1 pending a clear 
statement from CENTCOM of its use as DCA-related.  Shaykh Dr. 
Mohammed likely believes that the fuel issue has been 
"solved."  He intends, however, to discuss other aspects of 
GOK assistance to the U.S., with the objective of upgrading 
military cooperation. 
 
Security and Counterterrorism 
----------------------------- 
 
6. (S/NF)  In the past 30 months, Kuwait has experienced four 
terrorist attacks against U.S. citizens, primarily U.S. 
military personnel or contractors.  During the summer of 
2004, Kuwait State Security (KSS) arrested several Kuwaiti 
males for traveling to Iraq to fight against coalition 
forces.  They and other jihadis were recently sentenced to 
prison terms of up to 3 years and fines of $10,000 (ref C). 
In January, KSS uncovered an extremist cell planning for 
attacks against U.S. military convoys, residential complexes 
occupied by westerners, and key GOK facilities.  Security 
services launched an extensive search for cell members which 
resulted in four significant shootouts and the deaths of four 
police officers and nine cell members.  This was the first 
incident of Kuwaiti-on-Kuwaiti terrorism and served as a 
wake-up call for GOK leaders who previously were adamant that 
leveraging family or tribal ties, or co-opting would-be 
militants, were successful tactics in dealing with terrorism. 
 In response to these home-grown threats, the GOK passed a 
new arms law, launched a weapons collection program, began 
enforcing existing laws such as forbidding veiled women to 
drive, and requiring military staff to seek approval for 
foreign travel, and initiated a discussion on educational 
reform.  While this particular extremist cell has been 
disrupted, there is still the possibility of other cells 
planning operations in Kuwait and some terror supporters -- 
Mohsin Al-Fadhli and Khaled Al-Dosari -- remain at large and 
wanted.  Embassy Kuwait maintains an active CT dialog at the 
political, intelligence, and security levels; and an 
inter-ministry team of Kuwaitis recently participated in an 
ATA training course in the U.S.  Nevertheless, there is room 
for improvement:  Kuwait needs a focused, sustained approach 
to CT; must strengthen anti-terror finance laws; and promote 
coordination and cooperation among its security bodies. 
 
7.  (S/NF)  Eleven Kuwaiti detainees remain at Guantanamo 
Bay, Cuba.  Nasser Al-Mutairi, who was returned to Kuwait in 
January, was released on bail, without MFA concurrence, in 
April on humanitarian grounds (ref M).  His trial is 
scheduled to resume June 3.  While the GOK has not recently 
raised detainee issues with the Embassy, the Foreign Minister 
will raise it, partially to deal with strong domestic 
pressure on the issue.  Securing the repatriation of the 11 
Kuwaitis is a priority for the Government which faces 
constant criticism from Parliament on the detainee issue. 
The FM will seek more transparency in USG intentions to 
prosecute or return the Kuwaitis.  The GOK has promised to 
detain and prosecute all detainees and considers that its 
recent performance on CT matters, illustrates its ability to 
be tough on terror.  Additionally, GOK officials regularly 
argue that detainees have been returned to Yemen and Bahrain, 
countries which provide far less support to OIF and other 
U.S. interests, and therefore should be returned to a close 
ally as well.  The 3-year sentences for the jihadis represent 
harsher penalties for terror suspects, but Post continues to 
question whether the GOK will sustain its firm stance against 
terror.  At least two Kuwaitis are also detained in Iraq. 
 
Support for Iraq 
---------------- 
 
8. (C) Kuwait has been an indispensable ally in U.S. and 
coalition efforts to promote peace, stability and democracy 
to Iraq, and should be thanked for its continued assistance. 
Before, during, and after Operation Iraqi Freedom (OIF), the 
GOK turned over to the U.S. more than half of its territory, 
diverted much of its commercial traffic from the Port of 
Shuaiba, allowed the use of a large percentage of the 
country's sole commercial airport, allowed the use of three 
airbases and the building of a new desert base.  It extended 
fuel pipelines to three facilities and continues to provide 
in excess of $100 million per month in fuel as 
assistance-in-kind.  Most significantly, the GOK and its 
people are solidly behind the U.S. and view the success of 
our operations in Iraq as intertwined with their own fate. 
Even as a Major Non-NATO ally, Shaykh Dr. Mohammed will be 
looking for acknowledgment that his country is more than just 
a loyal friend, it is a valued and trusted ally. 
 
9.  (C)  The GOK committed $1.5 billion in aid after the 
liberation of Iraq, but claimed that $1 billion was already 
disbursed through various types of support for coalition 
forces and other pre-liberation activities. The Humanitarian 
Operations Center (HOC) and the Kuwait Fund for Arab Economic 
Development (KFAED) have been the two major disbursement 
channels to date for the remaining funds.  The HOC was set up 
in 2003 in order to coordinate the humanitarian campaign in 
Iraq and facilitate the efforts of Kuwaiti, international, 
governmental, and non-governmental organizations providing 
assistance into Iraq through Kuwait.  Besides funding the 
operations of the HOC itself, the GOK gave the HOC $5 million 
to disburse in direct humanitarian aid in Iraq, most of which 
it has been giving out in cash and small grants for 
rebuilding in Najaf.  Additionally, the GOK recently began 
discussions with the ITG on the use of $60 million for the 
construction of schools and hospitals, and refurbished the 
Iraqi Embassy in Kuwait (ref E).  Senior officials have made 
supportive public comments about the new government and await 
the nomination of an Iraqi ambassador.  We seek prompt action 
on the transfer of Development Fund for Iraq (DFI) assets 
(ref E).  The Kuwait Mission to the UN is holding 
approximately $78 - 80 million in DFI funds and we have 
encouraged the GOK to make those funds immediately available 
to the ITG.  Contrary to the U.S. position, Kuwait maintains 
there is a claim on at least part of the money, but has 
offered to transfer a significant amount to the ITG while the 
claim issues is resolved.  Post suggests that the Secretary 
raise this if the transfer has not occurred by the time of 
the meeting. 
 
Democracy and Human Rights Issues 
--------------------------------- 
 
10. (C) The Prime Minister reasserted in late February the 
GOK commitment to securing full political rights for women. 
While the ultimate goal is full participation at the national 
level, the immediate focus has been granting women the right 
to vote and run for Municipal Council, a 16-member body that 
oversees technical issues, such as zoning, roads, and 
permits.  A May 2 vote resulted in indecision and the 
National Assembly is scheduled to reconsider the matter on 
May 16.  The passage of the measure would pave the way for 
female participation in Municipal Council elections in 2009 
and has possible implications for National Assembly 
elections.  Nevertheless, many women activists have called on 
MPs to vote against the bill, arguing that it is half-measure 
and the ongoing debate has turned women's rights into a 
political ploy (ref G).  In addition to the lack of political 
rights, there are other gender inequalities.  For example, 
women require a male sponsor in order to obtain a passport 
and are discriminated against in housing policies that favor 
male heads-of-household.  Post suggests that USG 
interlocutors press the FM for a coherent plan to achieve 
full political rights for women. 
 
11. (C) Kuwait is a destination country for foreign workers, 
most of whom hail from South Asia.  They populate the service 
sector and are subject to exploitation.  Many endure adverse 
work conditions and low, and occasionally no salary, because 
they went into debt to travel to Kuwait.  Recent protests by 
Bangladeshi laborers over systematic non-payment of wages 
have renewed local and international interest in the plight 
of laborers in Kuwait.  In response, the Ministry of Social 
Affairs and Labor prosecuted the employer; established a 
hotline for worker complaints; and set up a direct-deposit 
e-banking requirement to ensure workers receive salaries (ref 
I).  Underage camel jockeys also remain a concern and in 
2004, the GOK banned minors from working as jockeys and the 
GOK formed May 9 a committee to further examine the 
regulations on children's participation in camel races.  The 
GOK recognizes there is a trafficking in persons problem and 
is committed to resolving it by working with the U.S. (ref 
J).  The FM's visit presents an opportunity to reinforce the 
importance of this issue and identify areas for immediate 
improvement, including use of the media to raise public 
awareness, use of robot jockeys as in Qatar and the UAE, 
increased funding and staffing for agencies charged with 
combating TIP, and amendments to the labor law to cover 
domestic employees. 
12.   (C)  Kuwaitis have participated in MEPI and BMENA 
activities, and alumni of participant exchanges, among them 
women political activists, women entrepreneurs, and young 
business people, are developing into a resource for 
additional programming.  We are working through GOK concerns 
about direct funding by MEPI to local NGOs.  The GOK is 
concerned that such funding, which is illegal under current 
law, would open the door to unwanted Iranian links with 
sympathetic groups in Kuwait (ref J). 
 
Regional Issues 
--------------- 
 
13.  (C) In March, Kuwait announced the transfer of $40 
million to the Palestinian Authority (PA), and again extended 
an invitation to PA President Mahmoud Abbas, who visited 
Kuwait in December 2004 to return soon (ref H).  The GOK has 
expressed confidence in Abbas and members of his cabinet, 
specifically Finance Minister Salam Fayyad.  We should 
encourage a resumption of diplomatic relations and a regular 
flow of bilateral assistance to the PA.  Kuwait has, and 
continues, to assist the Palestinian people through 
contributions to the UNRWA. 
 
14.  (C)  Kuwait and Iran have shaken hands on, but not 
finalized, a memorandum of understanding for Kuwait to import 
gas from Iran in a 25 year, $7 billion deal.  While noting 
the U.S.'s understanding of Kuwait's gas needs, the 
Ambassador explained to Ministry of Foreign Affairs U/S 
Khaled Al-Jarallah on May 7 that investment in Iran through 
such a deal could trigger ILSA sanctions (ref B).  He further 
cautioned that timing of the MOU was poor given Iran's 
position on the nuclear issue.  The Ambassador also told 
Al-Jarallah that the U.S. would approach the SAG to ask for 
Saudi cooperation on a stalled Qatar-Kuwait gas deal, in 
order to broaden Kuwait's options for gas sources.  From a 
well-placed source at KPC, PolOff learned that Kuwait viewed 
Iran as a secondary source for natural gas, and asserted that 
Kuwait would ideally like to import gas from Qatar (ref F). 
The Al-Jarallah described Kuwait's gas needs as "critical," 
but also explained Kuwait's views that it is better to work 
with a troublesome and dangerous neighbor such as Iran than 
alienate it.  The FM will be interested in the U.S. 
assessment of Iranian behavior, particularly on the nuclear 
issue. 
 
15.  (SBU)  In April, Minister for Diwan Affairs Shaykh 
Nasser Mohammed Al-Ahmed Al-Sabah led a delegation on a 
three-day visit to Sudan to examine rebuilding the 
war-devastated country (ref L).  U/S Al-Jarallah told the 
Ambassador Kuwait was ready to cooperate with Sudan on 
activities that would benefit the people and preferred to 
grant loans through the KFAED.  Despite promises from the GOS 
to change investment laws to attract more foreign investors, 
Kuwait is not convinced conditions are right for direct 
bilateral investment.  In addition to the loans, the GOK has 
tentatively agreed to send troops to Sudan, but not to the 
Darfur region.  The GOK would likely request U.S. assistance 
for deployment to Sudan and the FM should be queried on 
Kuwait's intentions and timing. 
 
Kuwaiti Students and Visas 
-------------------------- 
 
16.  (U)  Post has begun a coordinated effort to reverse an 
alarming decline in the number of Kuwaiti students choosing 
U.S. colleges and universities (ref O).  A significant 
percentage of current government, oil industry and private 
sector leadership in Kuwait hold U.S. degrees and holds the 
United States in very high regard.  The 35 percent drop in 
Kuwait enrollments in the U.S. since 9/11, greater than the 
decline in Saudi Arabia, was alarming for two principal 
reasons: 1) the loss of the immediate/intensive exposure of 
young Kuwaitis to America and Americans, and 2) the long-term 
loss to the United States of a cadre of leaders in 
government, business, education and other sectors who receive 
not only a high quality education, but who understand 
American culture and the way Americans respond to the world. 
We have a strategic interest in making sure that the next 
generations of leaders in Kuwait have experienced the 
excellent educational opportunities in the U.S.  Embassy 
Kuwait's strategy to combat this decline includes 
interdisciplinary group within the mission to develop and 
implement actions, a stronger working relationship with 
AMIDEAST Kuwait, links with the National Union of Kuwaiti 
Students, Embassy website coverage of student issues, a 
database of distinguished Kuwaiti alumni of American 
universities, expanded Consular outreach to prospective 
students, and aggressive lobbying of Kuwaiti officials to 
direct more scholarship students to the U.S 
 
17.  (SBU)  Members of the ruling family and senior officials 
have expressed their frustration with the requirement for a 
personal appearance for non-official travel.  Post has 
attempted to address their concerns by scheduling private 
appointments for senior officials for biometric scanning in 
the Consul's office, but Kuwaitis, who consider themselves 
good friends and supporters of the U.S. still complain and 
feel slighted.  Moreover, with the start of the summer travel 
season, the waiting period for NIV interviews has lengthened. 
 Post is now accepting appointments for July 13.  Exceptions 
are made for medical cases, student visa applications, and a 
limited number of VIPs, but with two and one-half officers 
handling all visa applications and the time required for 
clearance and review, Post can accommodate no more than 150 
applications per week.  We are sympathetic to the GOK's 
concerns, but without additional resources are unable to 
process applications faster.  It would be helpful to be able 
to advise Shaykh Dr. Mohammed that additional TDY consular 
help will be supplied to Embassy Kuwait. 
 
Update on Northern Oilfields Project/Major Power Project 
--------------------------------------------- ----------- 
 
18.  (C)  According to Embassy sources, the recent favorable 
report from the National Assembly's Finance Committee on the 
Northern Oilfields Project (Project Kuwait) makes it almost 
certain that the project will be approved by the entire 
National Assembly.  KPC and the GOK hope to have the assembly 
vote on the project before the June 28 recess date which will 
mark the end of the legislative year.  The Energy Minister is 
committed to the project and is making every effort to ensure 
its passage by year's end.  The U.S. companies (Chevron, 
Exxon-Mobil, Occidental) involved in the three bidding 
consortia remain concerned about transparency in the bidding 
process and about the terms of the deal, once KPC is 
authorized to open the contract for bidding.  Many U.S. 
companies have watched the progress of this project for a 
long time and hope to see movement on it soon, as an example 
of Kuwait's commitment to economic reform and openness to 
foreign investment.  U.S. companies are also in the bidding 
process for the very large power generation project known as 
Al Zour North.  This is a project that has been on the books 
for some time and for which U.S. firms will be treated as 
local firms, in recognition of the U.S. role in Kuwait's 
survival. 
 
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LEBARON