US embassy cable - 05KUWAIT4905

C O N F I D E N T I A L SECTION 01 OF 02 KUWAIT 004905 
 
SIPDIS 
 
FOR NEA/ARPI; SIPDIS 
 
E.O. 12958: DECL: 11/26/2015 
TAGS: PREL, ECON, EAID, PHUM, PGOV, KDEM, ENIV, IZ, KU 
SUBJECT: IRAQI PLANNING MINISTER TELLS KUWAIT ITG IS READY 
FOR DEVELOPMENT PROJECTS; INVITES KUWAITI INVESTMENT IN IRAQ 
 
REF: STATE 214617 
 
Classified By: Ambassador Richard LeBaron for reasons 1.4(b) and (d) 
 
1.  (C)  Summary:  During a November 27 meeting, Ministry of 
Foreign Affairs Undersecretary Khaled Al-Jarallah told the 
Ambassador that the November 26 visit of Iraqi Planning 
Minister Barham Saleh to Kuwait resulted in a step forward on 
Kuwaiti-funded reconstruction projects in Iraq.  The ITG 
submitted proposals on using the GOK's $60 million grant and 
would soon begin talks on the $440 million offered as loans. 
Saleh told the Kuwaiti Foreign Minister that the upcoming 
elections presented an opportunity to embark on economic 
reform programs and the ITG had targeted the water and 
electricity sectors for intensive development.  Saleh also 
called for Kuwaiti private sector investment in Iraq, saying 
opportunities for joint ventures were plentiful and the 
cooperation would strengthen bilateral relations.  He also 
recommended that money from the UN Compensation Commission be 
used for joint environmental projects that would benefit 
Iraq, Kuwait, and eventually the entire region.  Al-Jarallah 
said the debt forgiveness issue was touched upon and Kuwait, 
which had made no effort to collect the debt, had no 
intention of being "tough" on the issue. End Summary. 
 
Encouraging Kuwaitis to Invest in Iraq 
-------------------------------------- 
 
2.  (C)  Iraqi First Deputy Premier and Planning Minister Dr. 
Barham Saleh traveled to Kuwait November 26 for meetings with 
Foreign Minister Shaykh Dr. Mohammed Sabah Al-Salem Al-Sabah 
and Minister of Planning and Minister of State for 
Administrative Development Affairs Dr. Masouma Al-Mubarak. 
According to Ministry of Foreign Affairs Undersecretary 
Khaled Al-Jarallah, the meetings were very productive and 
Saleh shared with his Kuwaiti counterparts a "strong vision 
on the future of Iraq" and "good ides on how to strengthen 
bilateral relations."  Al-Jarallah told the Ambassador during 
a November 27 meeting that Saleh identified joint business 
ventures as the best way to advance relations between Kuwait 
and Iraq.  Saleh said there was huge business potential in 
Iraq and encouraged Kuwaitis to take advantage of it.  He 
also said business ventures would help to change the 
"prevailing Saddam Hussein mentality," reporting regular 
negative comments in Iraq about Kuwaitis, especially by 
members of the National Assembly.  Business enterprises, he 
argued, would help to open the minds of Iraqi citizens and 
would benefit the Kuwaiti private sector.  Al-Jarallah 
confirmed Kuwaiti interest in investing in Iraq and said to 
do so, the GOK would need the help and support of the U.S. 
 
Ready for Reconstruction 
------------------------ 
 
3.  (C)  Saleh was optimistic about the future and said the 
upcoming elections would mark a turning point in Iraqi 
history and permit the implementation of economic reforms. 
He cited the water and electricity sectors as priority 
targets for development.  On the subject of public services, 
Saleh told the Kuwaiti FM that Iraq was finally ready to 
receive the funds pledged by Kuwait for development projects, 
with a focus on health, education, and electricity.  The 
Iraqi Transitional Government (ITG) would soon approach the 
GOK on using the $440 million offered as loans and the Kuwait 
Fund has already received proposals for the $60 million 
offered as a grant.  (Note:  We will follow up with the 
Kuwait Fund.  End note.)  Among the proposals for grant funds 
are health and educational projects as well as an unspecified 
"very important project for Sadr City."  Saleh also proposed 
that some funds earmarked to compensate governments under the 
UN Compensation Commission instead be used to establish a 
fund to finance projects in Iraq that would also benefit 
Kuwait.  Saleh preferred environmental projects that would 
have a regional impact.  Al-Jarallah said the GOK considered 
the proposed use of UNCC funds to be a good idea. 
 
Iraq's Debt to Kuwait 
--------------------- 
 
4.  (C)  Turning to debt, Saleh said the GOK had not sought 
repayment from the previous regime and had not requested that 
the ITG settle the obligations.  He recommended that the two 
governments look seriously at the debt issue and identify a 
bilateral solution.  Al-Jarallah told the Ambassador that the 
GOK would not be "tough" with Iraq on debt and reminded him 
that decisions affecting debt could not be made unilaterally 
and required the approval of the National Assembly.  The 
Ambassador noted his understanding of prior Kuwaiti 
statements that it would be guided by the Paris Club terms 
which forgive 80 percent of Iraq's debt, but said full 
forgiveness was desired.  He also urged the GOK to make 
public statements on forgiving Iraqi debt in order to help 
 
KUWAIT 00004905  002 OF 002 
 
 
improve Iraq's standing in the international financial 
markets. 
 
No Comment on Iran 
------------------ 
 
5.  (C)  Al-Jarallah said he also asked Saleh about the 
extent of the Iranian influence in Iraq.  Barham deflected 
the question, remarking only that Iran was a large, important 
country with which Iraq shared a long border. 
 
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