US embassy cable - 03KUWAIT2291

C O N F I D E N T I A L KUWAIT 002291 
 
SIPDIS 
 
STATE FOR EB AND NEA/ARP 
 
E.O. 12958: DECL: 04/30/2013 
TAGS: ECON, ETRD, EINV, PREL, IZ, KU, ZP 
SUBJECT: WORKING TO DEVELOP THE ECONOMIES OF IRAQ AND THE 
GULF STATES 
 
REF: A. STATE 131981 
 
     B. KUWAIT 1213 
 
Classified By: Ambassador Richard H. Jones for reason 1.5 (D). 
 
1.(C)  Current GCC trade and investment practices, with a few 
important exceptions, are generally dismal and should not be 
considered as a model for Iraq.  Our goal, in fact, should be 
the opposite: to use our successful efforts in Iraq to become 
a model for GCC economies.  There are, however, a few 
'success stories' in the GCC that might be useful to emulate 
in Iraq.  We'll leave it to our colleagues to elaborate, but 
from Kuwait, Dubai's efforts to become a favorite destination 
of foreign investors and to protect intellectual property 
rights appear to be in the vein of what Iraq needs (but watch 
out for the onerous 'offset' requirements attached to 
government procurement contracts there).  And Bahrain has 
become a leader in financial services, particularly in the 
areas of bank oversight and supervision. 
 
2. (C) Finally, the concept of the GCC Customs Union (and the 
eventual monetary union), as dysfunctional as its start-up 
has been, represents an ideal that we should encourage (while 
at the same time trying to lower the external barriers the 
Union presents). 
 
3. (C) Reftel requests thoughts on how regional investments 
in Iraq can be encouraged.  We have seen press reports citing 
CPA Ambassador Bremer's announcement of a trade finance 
facility fund that will provide support to exporters and 
investors moving their products and funds into Iraq.  We 
reiterate our recommendations (Reftel b) that organizations 
such as OPIC and EXIM take up this role for American firms 
and joint ventures, while at the same time we encourage MIGA 
to do the same on a more global basis.  Finally, Gulf states 
themselves could be encouraged to provide trade and 
investment finance assistance to their nationals with 
training and technical assistance programs that allow 
countries like Kuwait to create its own investment insurance 
agency. 
JONES