US embassy cable - 05KUWAIT5063

C O N F I D E N T I A L SECTION 01 OF 04 KUWAIT 005063 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR NEA/ARPI, LONDON FOR TSOU, PARIS FOR ZEYA 
 
E.O. 12958: DECL: 12/06/2015 
TAGS: PREL, PGOV, PARM, EAID, KDEM, KPAO, CVIS, KU, 
FREEDOM AGENDA 
SUBJECT: NEA DAS GRAY ENGAGES GOK ON AID, IRAN, IRAQ, 
U.S.-KUWAIT RELATIONS, AND VISAS 
 
REF: A. KUWAIT 5031 
     B. KUWAIT 4905 
     C. KUWAIT 4624 
 
Classified By: Ambassador Richard LeBaron for reasons 1.4 (b) and (d) 
 
1.  (C) Summary: NEA DAS Gordon Gray met with Director 
General of the Kuwait Fund for Arab Economic Development 
(KFAED) Abdulwahab Al-Bader, Ministry of Foreign Affairs 
(MFA) Acting Undersecretary Ambassador Khaled Al-Babtain, 
National Assembly Speaker Jassem Al-Khorafi, and Minister of 
Social Affairs and Labor Faisal Al-Hajji on December 6 during 
his visit to Kuwait.  Al-Bader reviewed GOK assistance to 
Iraq, Pakistan, the Palestinian territories, Lebanon, 
Afghanistan, and Yemen.  Al-Babtain and Al-Hajji expressed 
frustration with U.S. visa policies.  Al-Khorafi was 
cautiously optimistic about the situation in Iraq, but 
Al-Babtain said it was "not yet" time for Kuwaiti diplomatic 
representation in Iraq.  Al-Khorafi and Al-Babtain encouraged 
more open USG dialogue with Iran and criticized the USG's 
timing in confronting Iran over certain issues. 
 
2.  (C) Despite their criticism, however, Kuwaiti officials 
were very positive about U.S.-Kuwait relations; Al-Khorafi 
said the bilateral relationship "couldn't be better" and 
Al-Babtain was at a loss to provide any suggestions on 
improving ties.  DAS Gray expressed concern about the decline 
in the number of Kuwaiti students studying at American 
universities and encouraged more visa applications, a message 
he repeated during a successful roundtable with local media 
on U.S. regional policy that received front-page coverage in 
several dailies on December 7.  End summary. 
 
Kuwait Fund Assistance to Iraq, 
------------------------------- 
 
3.  (C) DAS Gray met December 6 with Director General of the 
Kuwait Fund Al-Bader who reviewed funding currently being 
administered by KFAED.  On assistance to Iraq, Al-Bader said 
KFAED is the "executing agent" for a $60 million GOK grant: 
$30 million to build schools in northern Iraq, which he 
predicted would be ready for contracting in early-March 2006 
after a joint feasibility study was finished by the Kuwaiti 
Pan Arab and the Iraqi Al-Jarrah consultancy groups; and 
another $30 million to provide medicine storage facilities 
and a mobile hospital for the Iraqi Ministry of Health. 
Al-Bader said the Iraqi Transitional Government (ITG) wanted 
to use part of another $60 million GOK grant approved in June 
for schools in/around Baghdad and a sewage project, possibly 
in Sadr City, but predicted it would likely take a year to 
finalize the project and disburse the funds. 
 
4.  (C) KFAED is responsible for $440 million in 
concessionary loans for development projects in Iraq, and is 
negotiating with the ITG on projects to fund, Al-Bader said. 
At one point, the ITG suggested using all $440 million for a 
power plant in northern Iraq, but the GOK would prefer to 
diversify funding.  Al-Bader blamed the security situation 
and ITG inaction for disbursement delays and complained KFAED 
had yet to receive information it requested on projects. 
(Note: MFA Undersecretary Al-Jarallah told the Ambassador 
that during his November 26 visit ITG Planning Minister 
Barham Saleh would "soon" present KFAED with funding 
proposals.  End note.)  Al-Bader expressed confidence in 
Saleh and explained that KFAED had asked that ITG assistance 
requests come solely from the Ministry of Planning. 
 
Earthquake Aid to Pakistan, 
--------------------------- 
 
5.  (C) KFAED is also administering a $50 million, 25-year 
concessionary loan at one percent interest as part of the 
GOK,s $100 million assistance package to Pakistan for 
earthquake relief, Al-Bader said.  He noted, however, that 
despite advance approval for project funding from the KFAED 
Board, the Pakistani government had yet to identify specific 
projects. 
 
And the Palestinian Territories 
------------------------------- 
 
6.  (C) Al-Bader said aid to the Palestinian territories was 
"totally different."  KFAED administers two $25 million GOK 
grants for education and health sector projects, but cannot 
grant concessionary loans because of the territories' legal 
status.  In a separate conversation addressing Palestinian 
issues, Al-Khorafi urged DAS Gray to "help Abu Mazen 
 
KUWAIT 00005063  002 OF 004 
 
 
(Palestinian Authority Chairman Mahmoud Abbas) and do not let 
the Israelis embarrass him."  He argued that the U.S. should 
not let the fanatics on both sides influence the majority. 
DAS Gray noted the President's invitation to Abbas to visit 
the White House and stressed that the U.S. was committed to 
working with Israeli and Palestinian political leaders.  He 
also highlighted U.S. support for "tangible results" in the 
Palestinian territories to demonstrate that the peace process 
works. 
 
Other Development Projects 
-------------------------- 
 
7.  (C) On Afghanistan, Al-Bader said the Fund had already 
administered one grant, but an old unresolved Afghanistan 
government debt was blocking additional funding.  Al-Bader 
hoped a long-term repayment plan could be agreed upon to 
resolve Afghanistan's pending bilateral arrears related to an 
old project (ref C) and open the way for further KFAED 
funding.  (Note: U.S. Treasury has advised the GOA to resolve 
Russian debt issues before closing the arrears issue with 
Kuwait.)  Al-Bader said KFAED was also considering a new 
project in Lebanon and was starting to reconsider funding 
projects in Yemen. DAS Gray emphasized the importance of 
assistance to Lebanon at this critical juncture.  Al-Bader 
agreed that Lebanon "needs a lot of assistance." 
 
KFAED Funding Criteria 
---------------------- 
 
8.  (C) Al-Bader said the Fund uses two criteria when 
deciding to fund projects.  The first and primary criterion 
is the readiness of the project.  The second is the regional 
allocation of projects: at least 50% of projects must be in 
Arab countries; the Fund also tries to maintain 20-25% of 
projects in Asia and 20-25% in Africa.  He downplayed 
political motivations for funding, though he acknowledged 
that political support could help speed the approval process. 
 
 
Al-Badar Encouraged to Visit Washington 
--------------------------------------- 
 
9.  (SBU) The Ambassador and DAS Gray encouraged Al-Bader to 
travel to the U.S. to visit aid agencies, like USAID, the 
World Bank, and the Millennium Challenge Corporation (MCC). 
DAS Gray noted the similarities between the Kuwait Fund and 
the MCC's development objectives and funding criteria, and 
suggested a meeting would be very beneficial. 
 
Kuwait-Iraq Relations: Cautiously Optimistic 
-------------------------------------------- 
 
10.  (C) National Assembly Speaker Jassem Al-Khorafi was 
cautiously optimistic about the situation in Iraq.  He was 
"very happy" with the President's November 30 speech, which 
he said came "at the right time and in the right place;" and, 
"very importantly," put an end to speculation on U.S. 
withdrawal.  Al-Khorafi claimed that Iraq's leaders, many of 
whom have visited Kuwait, "know cooperation is essential, 
despite their differences."   DAS Gray emphasized the 
importance of Iraqi stability to the region and expressed 
hope the December 15 elections would be a positive step.  In 
a separate meeting at the MFA, Gray asked if the GOK was 
planning to re-open its embassy in Iraq, Acting U/S 
Al-Babtain said, "Not yet." 
 
GOK Officials Encourage USG Dialogue with Iran 
--------------------------------------------- - 
 
11.  (C) Al-Babtain and Al-Khorafi encouraged the USG to 
engage in dialogue with Iran.  Al-Khorafi argued that U.S. 
policies and poor timing undermined support for "moderates" 
within Iran.  DAS Gray pointed out that the U.S. cannot 
select the timing of certain issues and said the U.S. had 
been very patient and hoped to return to negotiations on the 
nuclear issue.  He emphasized, however, that the U.S. was 
looking for "actions, not promises."  DAS Gray also said the 
U.S. was trying to reach out to the Iranian people and 
continued to be concerned about Iranian meddling in Iraq. 
 
12.  (C) Al-Babtain characterized Kuwait-Iran relations as 
"very frank, but friendly."  He later qualified this 
statement, saying he should have used the word "flexible" 
rather than "friendly."  Al-Babtain assured DAS Gray that "we 
have been very frank (with the Iranians) that we are against" 
the nuclear program due to the potential for environmental 
 
KUWAIT 00005063  003 OF 004 
 
 
disaster.  Al-Babtain acknowledged, however, that if Iran 
developed "certain nuclear power" it would "pose a threat." 
Al-Babtain said it was in the "benefit of the whole region 
not to confront Iran." 
 
U.S.-Kuwait Relations 
--------------------- 
 
13.  (C) Asked to characterize U.S.-Kuwait relations, 
Al-Khorafi said, "It could not be better."  He complained, 
however, that the USG gives Kuwait "too many lectures," 
particularly on human rights issues, which "embarrasses" the 
GOK.  "In the end, it is our country," he commented.  DAS 
Gray explained that human rights issues are a high priority 
for the USG.  Al-Khorafi also complained that USG officials 
do not spend more time in Kuwait when visiting the region. 
DAS Gray encouraged him, as Speaker, to invite his 
counterparts in U.S. to Kuwait.  Al-Khorafi concluded by 
emphasizing that there "should be no doubt of our friendship 
with the U.S."  Al-Babtain offered no suggestions on 
improving relations. 
 
14.  (C) In his meetings, DAS Gray also expressed U.S. 
gratitude for the GOK's generous hurricane Katrina 
assistance, a message that was greatly appreciated by the 
Kuwaiti officials. 
 
Kuwaiti Students Encouraged to Apply for Visas 
--------------------------------------------- - 
 
15.  (C) In his separate meetings with MFA Acting U/S 
Ambassador Khaled Al-Babtain and Minister of Social Affairs 
and Labor Faisal Al-Hajji, DAS Gray expressed concern about 
the decline in the number of Kuwaiti students studying at 
American universities.  "People-to-people contact is the best 
foundation for sustaining our good relationship," DAS Gray 
said.  Al-Babtain and Al-Hajji expressed frustration with 
"complicated" U.S. visa procedures and said stories of 
harassment, particularly at airports, from Kuwaitis returning 
from the U.S. discouraged others from traveling there.  DAS 
Gray noted that procedures are more transparent and efficient 
than in the initial period after September 11, and encouraged 
businessmen, tourists, and students to apply for U.S. visas. 
 
Next Steps in Female Political Participation 
-------------------------------------------- 
 
16.  (C) Al-Hajji said the next steps in female political 
participation are: 1) encouraging female voter registration, 
and 2) sponsoring seminars/meetings to educate them on their 
new rights.  (Note: Kuwaiti women were given the right to 
vote in May 2005.  They can register to vote in Feb. 2006. 
National elections are scheduled to take place in 2007.  End 
Note).  He posited, however, that most women were neither 
aware of nor willing to exercise their political rights.  The 
Minister predicted women's suffrage would primarily benefit 
Islamist political associations, like the Salafis.  He 
believed many female candidates were not adequately preparing 
themselves for the 2007 parliamentary elections and would 
only run because "it is a fashion."  Although he did not 
expect any female candidates to be elected, Al-Hajji said 
their participation in the elections would be a positive 
development. 
 
100% GOK Control Over Charity Organizations? 
-------------------------------------------- 
 
17.  (C) DAS Gray emphasized to Al-Hajji the importance of 
combating terrorist financing and asked what measures the GOK 
was taking to control charity organizations.  Al-Hajji said 
the GOK exerted 100% control over charity organizations in 
Kuwait, though he acknowledged that "we cannot control" 
unofficial groups.  He assured DAS Gray the GOK would act if 
any questionable activities were uncovered. 
 
Media Roundtable 
---------------- 
 
18.  (U) DAS Gray iterated U.S. policy positions on a range 
of issues, including visa policies, Iraq, Iran, Syria, and 
the Israeli-Palestinian conflict, in a very successful 
media-roundtable with Kuwaiti journalists and editors on 
December 6.  DAS Gray also emphasized the close U.S.-Kuwait 
bilateral relationship and the two countries, shared 
strategic vision.  The event received front-page coverage in 
the Arabic-daily Al-Rai Al-Aam and the English-daily Kuwait 
Times on December 7; other major dailies also had substantial 
 
KUWAIT 00005063  004 OF 004 
 
 
coverage.  A full transcript of the press conference will be 
placed on Embassy Kuwait's public website: 
www.kuwait.usembassy.gov. 
 
19.  (U) This cable has been cleared by DAS Gray. 
 
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LEBARON