US embassy cable - 03KUWAIT3358

S E C R E T SECTION 01 OF 05 KUWAIT 003358 
 
SIPDIS 
 
E.O. 12958: DECL: 07/27/2013 
TAGS: PREL, IZ, IR, KU 
SUBJECT: KUWAIT AND THE UNITED STATES: AN AGENDA FOR FUTURE 
COOPERATION 
 
Classified By: Acting DCM John G. Moran, reasons 1.5 b and d. 
 
 
----------------------- 
Introduction / Overview 
----------------------- 
 
1.  (C) Kuwait and the United States have been full partners 
in the defense of Kuwait since the 1990-91 Gulf War. 
Beginning with the liberation of Kuwait, the fruits of this 
partnership have included the decade long successful 
containment of Saddam Hussein's quest for weapons of mass 
destruction and regional domination, the modernization and 
restructuring of Kuwait's armed forces and most recently the 
liberation of Iraq from Saddam's tyranny.  Long-standing 
cooperation in several other areas has also served our mutual 
interests.  For example, US firms played an active role in 
extinguishing Kuwait's oil fires after the war and rebuilding 
key components of the country's infrastructure.  Kuwait has 
chosen American partners for major investments in its nascent 
petrochemical industry and American firms are now favorably 
positioned to compete for the Project Kuwait contract to 
develop and operate Kuwait's northern oil fields.  American 
and Kuwaiti experts have also worked closely on nuclear 
non-proliferation and other important security issues.  For 
example, Kuwait has been a willing partner in the global war 
on terrorism, offering extensive use of its facilities during 
Operation Enduring Freedom and taking steps to prevent the 
diversion of funds from legitimate purposes to the financing 
of terrorism. 
 
2.  (C) Notwithstanding the productive cooperation we have 
enjoyed in so many areas, there have been some notable 
exceptions.  For example, Kuwait has so far failed to live up 
to commitments by its Amir to extend suffrage to women and to 
award a major commercial power project to an American firm. 
There has been little, if any, progress on political, 
economic or educational reform.  A two-year old investment 
law remains unimplemented due to the GOK's failure to draft 
implementing regulations.  Kuwait remains a poor performer, 
even by regional standards, on the protection of intellectual 
property rights and the rights of foreign workers.  Kuwait 
has also not been sufficiently forthright in its support of 
efforts to find a just solution to the Israeli-Palestinian 
dispute, an issue of professed importance to it.  It has not 
yet ratified all of the major international conventions 
against terrorism, most notably the convention on the 
suppression of terrorist finance. 
 
3.  (C) With the defeat of Saddam Hussein's regime, our 
overall relations with Kuwait are probably as good now as 
they've ever been since the immediate aftermath of 
liberation.  However, potential future problems are already 
surfacing.  The occasion of the inauguration of a new 
National Assembly and a new Council of Ministers in Kuwait, 
including a "new" Prime Minister, provides an excellent 
opportunity to review the current state of relations and to 
consider our most pressing priorities for the future as well 
as how best to accomplish them.  Paragraphs 10 - 15 contain 
our key recommendations. 
 
---------------------- 
The State of Relations 
---------------------- 
 
4.  (C) Political Issues: Notwithstanding our stunning 
victory over Saddam's forces on the battlefield, the 
bilateral relationship is currently burdened by a widely held 
perception among Kuwaitis that the USG has not properly 
acknowledged Kuwait's indispensable role in the liberation of 
Iraq.  This sentiment was fueled by the last-minute 
cancellation of President Bush's planned visit, and the fact 
that primary Iraq  reconstruction contracts have been given 
only to US contractors.  The GOK is already fretting about 
our ability to stay the course in Iraq while some private 
Kuwaitis gripe at perceived slights such as lack of adequate 
(in their eyes) support for TF Hope, the Kuwaiti task force 
hunting for Kuwaitis missing in Iraq from the Gulf War.  UN 
Compensation Commission issues also bear close scrutiny as 
potentially huge negatives.  There is little understanding 
here of the positive role the US played in the negotiation of 
UNSC 1483 to preserve 
contributions to the UN Compensation Fund.  Over time, 
continued US requests for GOK resource contributions for 
various projects could also gradually help erode the overall 
relationship. 
 
5.  (S) Somewhat paradoxically, the removal of the Iraqi 
threat may negatively alter our ability to advance important 
US objectives such as women's suffrage and the extension of 
labor law to domestic servants in the coming year.  Prior to 
the conflict in Iraq, GOK action on such progressive issues - 
issues sometimes vehemently opposed by Islamist and other 
sectors of Kuwait's generally conservative society - was 
often undertaken simply out of fear that inaction would 
damage the U.S./Kuwaiti relationship.   In other words, 
regardless of the merits of the arguments or positions 
advocated by the USG, they 
were often sold - if tacitly - to the Kuwaiti public as 
necessary for maintaining the special strategic/security 
relationship with its ultimate security guarantor, the United 
States.  With the backdrop of this security threat removed, 
the GOK will likely meet with less success on divisive issues 
such as women's suffrage or the extension of labor rights 
(even if it chooses to push them) until a stronger domestic 
constituency for these issues arises.  In addition, the 
election of a National Assembly where so-called Independents 
have the potential to provide swing votes on many issues may 
prove a further obstacle to the successful passage of 
progressive reform, particularly if a cohesive Islamist 
opposition emerges.  As evidenced by the furor over the 
former Minister of Education's comments vis-a-vis education 
reform, Islamist demagogues are more than ready to try to tar 
any initiative that can be deemed un-Islamic and/or is 
associated with the West as being raised solely due to U.S. 
"interference" in domestic political matters.  It is 
difficult to exaggerate the level of sensitivity to any 
perceived imposition of Western culture.  US initiatives in 
key areas of women's suffrage, reform of education and 
extension of labor law to domestics will inevitably put us at 
cross purposes with some GOK constituencies. 
 
6.  (S/NOFORN) Military Cooperation Issues: Although 
military-military cooperation remains generally excellent, 
there are already some signs of deterioration in this area as 
well.  The GOK recently informed us that it has decided to 
cancel its participation in Exercise Lucky Sentinel, the only 
bilateral joint and combined exercise on the books. 
(This decision seems to be budget driven and possibly subject 
to change.)  They are also pushing back on Burden Sharing 
support under the bilateral Defense Cooperation Agreement for 
our planned long-term deployment of an augmented Brigade 
Combat Team (15,000 US troops) and dragging their feet on 
Camp Arifjan upgrades (which could delay our planned early 
2005 departure from Camp Doha) and on previous commitments to 
upgrades at Al Jaber and Al Salem Airbases.  Meanwhile, 
delays in the search for POW's, continued high throughput of 
USG officials and Iraqis without proper documentation (visas) 
on short notice are a potential political irritant that might 
eventually impact on mil-mil relations.  On the other hand, a 
bright spot is that the Minister of Defense and the Chief of 
Staff are known quantities with whom we've worked well. 
 
7. (S/NOFORN)  Counter-Terrorism/Security Issues: The USG has 
enjoyed excellent cooperation from the various Kuwaiti 
government organs involved in counter terrorism and security 
issues since the terrorist attacks of September 11, 
culminating in a number of new cooperative initiatives during 
the war in Iraq.  Many of these initiatives, aimed at 
countering potential Iraqi threats, were worked at a vigorous 
pace before and during the war, leading to extreme fatigue on 
the part of Kuwaiti services.  The Kuwaiti State Security 
(KSS) Service, overworked during the war, will no doubt slow 
its pace somewhat as it focuses on its move to a new 
headquarters this fall.  Most KSS officers of senior rank are 
planning long vacations beginning in late July or August 
2003, returning to work just prior to the move in October. 
The KSS still has an interim director and many officers are 
suffering from chronically poor morale as a result of public 
criticism (fueled by allegations of abuse from extremists 
arrested or questioned by KSS) and their perceived lack of 
adequate compensation.  All of the above issues will likely 
contribute to an anticipated slowing in joint 
counter-terrorism efforts in the near term.  Moreover, 
leadership on this front, which should come from the Minister 
of Interior, remains a question mark, as we have relatively 
little experience with the newly named minister. 
Nonetheless, physical security provided by the Ministry of 
Interior should remain fully adequate and we expect no 
diminution in this regard.  Kuwaiti support is also expected 
to remain strong on military security issues.  The 
well-respected director of the Kuwaiti military intelligence 
(KMI) service, Brigadier General Khalid al-Jarrah al-Sabah, 
has been informally named the new J-2 for the Ministry of 
Defense, insuring a proactive senior interlocutor in military 
security issues for the foreseeable future.  On the political 
level, the continued detention of 12 Kuwait at GTMO could 
become an irritant as  the detainees' families and their 
sympathizers periodically stir the pot. 
 
8. (C) Commercial Issues: Commercial relations are a 
relatively bright spot in bilateral relations.  We've won 
several contracts for American companies recently and US 
firms are well positioned to be big players in the 
development of Kuwait's northern oil fields.  However, the 
terms offered thus far are not at all attractive.  The status 
of the Amir's commitment on the Al Zour North power project 
also remains elusive.  (The Ambassador recently transmitted 
Secretary of Commerce Evan's letter to the Prime Minister 
 
SIPDIS 
asking for reaffirmation of this commitment - by "employing 
US firms to supply equipment and services necessary for the 
development of this power project.")  Such advocacy demands 
will continue, potentially alienating domestic constituencies 
already disappointed by the alleged lack of success thus far 
of Kuwaiti companies in securing contracts on Iraq 
reconstruction programs.  An upside, however, could be 
growing cooperation between US and Kuwaiti firms to exploit 
commercial opportunities in Iraq. 
 
9. (C)  Economic Reform Issues: Cooperation on economic 
policy issues remains perhaps the most disappointing area of 
our bilateral relationship.  Without significant further 
progress on the protection of intellectual property rights 
this year, Kuwait should be put on the Special 301 Priority 
Watch List.  GOK tax policy and offset requirements as well 
as the GOK's failure to conform to its WTO obligations are 
also potentially serious negatives.  In developing our 
program to address these and other economic issues with 
Kuwait, we will emphasize the win-win aspects of market-based 
reform.  Rather than emphasize the IPR revenue that U.S. 
exporters lose to counterfeiters of software and 
entertainment products, for example, we will quantify the 
costs to Kuwait's importers, distributors and its nascent IPR 
industry.  Rather than dwell on past stumbles in our 
bilateral efforts toward economic and regulatory reform, we 
will attempt to tie progressive GOK actions to beneficial 
regional or multilateral steps at the WTO and elsewhere.  The 
same strategy will be applied to the issue of the inequity in 
Kuwait's treatment of foreign workers, by 
highlighting the increased productivity that enlightened 
labor law produces over time. 
 
------------------------------ 
Achieving the Bilateral Agenda 
------------------------------ 
 
10.  (C) It is an axiom of international diplomacy that a 
downturn in bilateral relations follows any great effort in a 
common cause.  In the case of Kuwait, the GOK leadership and 
the majority of the country's elites have stood steadfastly 
with the US against Iraq at some cost to their relations with 
their Muslim/Arab neighbors.  While they had very good 
reasons for doing so--Kuwaitis needed no reminder of the 
existential threat they faced from Saddam--it must be said 
that their support for us during OIF exceeded our 
expectations.  Now that that threat has been removed we must 
show our friends here that the US continues to value its 
friendship and commitment to Kuwait, and that we do not view 
the country merely as a cash cow for international 
commitments or as a parking lot for regional military forces. 
 While Kuwait continues to be a moderate and relatively (by 
Arab world standards) progressive society, even Desert Storm 
and OIF did not completely inoculate it against the wider 
political currents sweeping the Muslim world.  Lacking 
personal experience with liberation, younger Kuwaitis are 
particularly vulnerable to these contagions.  Our strategies 
to effect the changes enumerated above should be conducted in 
a manner that supports reform without allowing our opponents 
to convince the average Kuwaiti 
that we are wantonly interfering in domestic affairs.  We 
must therefore be prepared to articulate clearly the reasons 
behind our requests, why we feel we have a stake in the 
issues and how our proposals will benefit Kuwait as well as 
the US.  These are sometimes difficult tasks to accomplish; 
we will then need Washington's active support to succeed. 
Our key recommendations are given below. 
 
11. (C) Political Issues: 
 
-- Increased visits by high-level USG officials (including 
the Secretary, and hopefully, the President) this fall would 
do much to reverse the ongoing erosion in relations due to 
local concerns that Kuwait's contributions to OIF have not 
been sufficiently recognized by the USG.  Such visits would 
also help to bolster Shaykh Sabah at an early stage of his 
tenure as Prime Minister and could energize him to act on 
issues of importance to us sooner than otherwise. 
 
-- If visits to Kuwait are not feasible for the 
Secretary/President, an invitation for Shaykh Sabah to visit 
 
SIPDIS 
Washington in the fall would be well received, although it 
would not have the same domestic resonance in Kuwait as a 
visit here. 
 
-- With regard to specific issues, our highest priorities are 
women's suffrage, educational reform and trafficking in 
persons, primarily a labor reform issue here.  All lie in the 
sensitive socio/religious field.  They will be our toughest 
nuts to crack.  Given the political environment, our work on 
such issues must be persistent but low-key. 
-- Substantive embassy sections are coordinating closely with 
one another to target post's MEPI proposals effectively and 
accurately to build domestic constituencies in favor of 
reform.  Specific suggestions include an increase in 
exchanges between influential Kuwaitis and U.S. NGO's 
focusing on advancing the role of women in political life. 
 
-- Facilitation of contacts between the National Assembly and 
the US Congress could also be beneficial.  We need to work 
harder to arrange visits to Washington by key 
parliamentarians and to exploit the temporary surge in 
CODEL's passing through Kuwait to set up meetings with 
important counterparts in the National Assembly as well as 
with GOK officials. 
 
12. (S/NOFORN) Military Cooperation: 
 
-- While we should not rule out active participation in 
coalition activities outside Kuwait's borders, the true 
military value of this partnership lies in Kuwait's strategic 
location and readiness to provide a base of operations. 
Although Kuwait is currently resisting increasing levels of 
requested burden sharing support, this probably reflects 
fiscal realities and a perception of the elimination of their 
principal threat more than anything else. We should have 
little real difficulty maintaining a significant US military 
presence (primarily land forces) while focusing our 
engagement with the Kuwaitis on bilateral exercises, training 
and military sales targeted to give needed capabilities. 
 
-- A robust slate of engagement activities is critical to 
honing KAF capabilities, maintaining personal relationships 
with key military and GOK leaders, and providing a stable 
foundation for continued activities in Iraq, as well as for 
any potential future requirements in the GWOT.  Planned 
enhancements to Camp Arifjan, to which we should move the 
bulk of our forces in early 2005, and upgrades to the two 
airbases will support this and should be pushed. 
 
-- The US must also make every attempt to ensure 
interoperability of Kuwait's military with our own and their 
willingness to employ it if needed.  Continuance of a full 
slate of bilateral exercises will help ensure this and must 
be stressed continuously.  Such continued engagement 
activities should stress the global terrorist nature of the 
threat (ala Saudi 12 May 03 attacks) and the capabilities 
Kuwait needs to defend against similar threats. 
 
-- Several bilateral activities this fall and/or early 2004 
could serve all these goals: a meeting of the bilateral 
Defense Review Group followed by a visit of the Minister of 
Defense to the US, during which a meeting of the Joint 
Military Commission could take place for the first time since 
1999. 
 
13. (S/NOFORN) Counter-Terrorism/Security: 
 
-- As threats related to Iraq continue to diminish we will be 
able to focus even greater attention on foreign and domestic 
Sunni extremists such as al-Qa'ida members and sympathizers, 
as well as Iranian sponsored threats and local Hizbullah 
elements.  This will mean turning even more attention to 
potential threats from Kuwaiti citizens-a very sensitive 
political issue for KSS, KMI and the Ministry of Interior. 
It will surely take time and considerable patient effort to 
re-energize the Kuwaiti security forces and focus them on 
working jointly on our perceived priority threats. 
 
-- Continued high level visits from ORCA HQ and invitations 
to the Minister of Interior to visit there will be crucial in 
nurturing these efforts.  We May also wish to consider visits 
by senior FBI and Department of Justice Officials, as well as 
by State's 
Coordinator for Counter-terrorism and the Assistant Secretary 
for Diplomatic Security, perhaps in conjunction with any 
future visits to Iraq. 
 
14. (C) Commercial: 
 
-- We will continue to pursue advocacy requests 
energetically, including through written appeals from senior 
Administration officials on high-value cases, such as Project 
Kuwait and the al-Zour North power plant.  However, we should 
recognize the limitations of such approaches. 
 
-- To adequately exploit the many commercial opportunities 
likely to be available in Kuwait in the coming two years, 
full staffing of the embassy's FCS section will be essential. 
 We also encourage Washington to reconsider our previous 
proposal for the establishment of a trade and investment 
promotion office in Kuwait. 
 
-- This will help to get the GOK and Kuwaiti private sector 
more actively engaged on Iraqi reconstruction.  Mobilizing 
private investment and job creation is much more important 
than any concessional assistance we can possibly wring out of 
the GOK. 
15.  (C) Economic Reform: 
 
-- Based on our consultations with industry representatives, 
relevant USG agencies and WTO guidelines, we will engage the 
GOK with specific proposals to achieve reform of all major 
IPR  areas, including amendments to its copyright law and 
improved inter-ministerial cooperation on enforcement.  We 
will promote industry-designed seminars and training programs 
on combating piracy.  We will work with EB's IPR office to 
adapt to Kuwait's environment an enforcement model that USTR 
has recommended for Poland. 
 
-- On economic and regulatory reform issues, we will lay the 
groundwork by encouraging Kuwait's return to long-suspended 
negotiations on a Double-Taxation Treaty.  A Bilateral 
Investment Treaty and a Trade and Investment Framework 
Agreement may also be potentially 
negotiable.  USTR is preparing summaries of USG's earlier 
positions on a BIT and Double-Taxation Treaty.  The GOK 
meanwhile is documenting its earlier positions and 
formulating an initial offer. 
 
-- On terrorist finance, in the short term, we will encourage 
the Ministry of Finance and the Central Bank of Kuwait to 
nominate officers for U.S. Department of the Treasury 
Anti-Terrorist Financing and Money-Laundering Courses.  We 
will also work with the GOK to 
prepare a base-line study of GOK actions on freeze requests 
up until this time. 
JONES