(C) SCENESETTER FOR DEPUTY SECRETARY ARMITAGE

C O N F I D E N T I A L SECTION 01 OF 02 KUWAIT 005104

SIPDIS

STATE FOR D, NEA/ARP, NEA/NGA, NEA/EX, NEA/FO

E.O. 12958: DECL: 11/04/2013
TAGS: OVIP PREL MARR EAID AMGT IZ KU
SUBJECT: (C) SCENESETTER FOR DEPUTY SECRETARY ARMITAGE


Classified By: AMB. RICHARD H. JONES; REASON 1.5 (B,D)


1. (C) Mister Secretary, the backup itinerary for your
upcoming visit to the Mideast involves overnighting in
Kuwait. We therefore take the opportunity to provide you
with this scenesetter emphasizing the GOK's role -- and this
embassy's -- in support of the Iraq effort.

(U) KUWAIT: THE ONE INDISPENSABLE ALLY
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2. (C) Kuwait was the one indispensable ally for Operation
Iraqi Freedom. It is unique in the Arab world: the only
Arab state where both the government and public opinion
openly supported us on Iraq. The Kuwaitis understand that
they need us to succeed
in Iraq, and they are eager to help. They have given a warm
welcome to visiting members of the Iraqi Governing Council
and to Iraqi ministers, and provided strong political support
in multilateral fora. The Government and private sector are
working together on a creative vision of an Iraq integrated
into the Gulf region and beyond. Kuwait's total pledge at
the Madrid Conference, $1.5 billion, encompasses about $1
billion already spent in support of the liberation of Iraq,
including some $120 million for humanitarian operations. The
GOK says it will consult with the Iraqis on how best to spend
the remaining half-billion dollars.


3. (C) The GOK continues to view the US as its long-term
partner and protector, but the Kuwaitis also want their
contributions acknowledged. Given the scale of ongoing
military operations in Iraq which are supported out of
Kuwait, we cannot afford to allow the Kuwaitis to feel taken
for granted. With the fall of Saddam's regime, Kuwait is in
the process of reviewing its security and defense
requirements. The Ministry of Defense is increasingly
concerned with its budget, and is beginning to evaluate the
costs associated with support to U.S. and Coalition Forces.
We expect exercises, Foreign Military
Sales, Assistance in Kind, and Burden-sharing costs to
receive close scrutiny. Kuwait has already scaled back
participation in bilateral military exercises, for budgetary
reasons.


4. (C) Our estimate of Kuwait's financial support to the
US-led coalition follows for the period 1 November 2002 - 31
October 2003:

- Kuwait MOD Budget: $2.145 billion.

- Burden-sharing $207 million. Includes costs for base
operations, supplies, personnel support and military
exercises.

- Assistance in Kind (AIK). Cost Sharing $73 million.
Includes fuel, food, TELECOM, laundry, and utilities for
20,000-40,000 military personnel.

- Camp Arifjan upgrades $55.42 million, through Military
Engineering Projects of the Kuwaiti MOD.

- Total Requested Burden-sharing, AIK, and MEP Support:
$336 million.

- Kuwait also pays $308 million FMS payment to the U.S.
Treasury.

- Total paid to the U.S.: $644 million or 30 percent of MOD
budget.

- In addition to all the above, Kuwait continues to provide
as AIK fuel for US forces associated with Operation IRAQI
FREEDOM operating in/from Kuwait: est. 407 million gallons
worth $342 million to date (rate: $0.84/gal.),currently
avergaing 42 million gallons per month.


5. (C) Fuels for Iraq: The Kuwaitis have gone out of their
way to be good suppliers of mogas and LPG to Iraq, both
because it is an attractive commercial proposition and
because it can improve the quality of life of their northern
neighbors. They are acutely aware that the hardships endured
by ordinary Iraqis have inflamed hostile feelings towards
Kuwait.

(U) EMBASSY KUWAIT: THE VITAL LINK
--------------


6. (U) Since before the start of Operation Iraqi Freedom,
Embassy Kuwait has been a vital link in support of the
liberation effort. We negotiated with the host nation to
facilitate the military build-up which at one point entailed
placing over half of Kuwait's landmass off-limits to its own
civilians. We introduced the Garner Group to valuable
sources of information on Iraq and facilitated their
communications. To this day, this Embassy is truly an
extension of the CPA, which could not be fully functional
without us.


7. (U) Official visits have increased dramatically. We
hosted the Secretary of Defense and the Secretary of State in
successive weeks. We understand that the White House has
urged all Cabinet members to visit Iraq, and we have been
told to expect six CODELS per month. Kuwait is the preferred
gateway to Iraq and/or Afghanistan, with many official
visitors using it as their base for multiple day-trips. Many
of our staff are already reaching 'burn-out' level: one
officer logged 44 hours of overtime for CODEL support during
an eight-day period. The amount of overtime is costly
financially and emotionally, with no leeway for leave without
undue burdens on others. Our local guard force has been
denied official Ramadhan Leave, to which they had a
contractual right, due to the pace and volume of security
requirements.


8. (U) Our support to the Iraq effort is substantive as well
as administrative/logistical. We have been directly involved
in:

- investigating smuggling allegations against U.S.
contractors;

- organizing humanitarian fuel supply for CPA, Project RIO
(Restore Iraqi Oil) and Iraq's State Oil Management
Organization with the GOK-sponsored supply company Al-Tanmia;

- facilitating a multi-agency, multi-national border
agreement for all coalition cross-border traffic;

- encouraging the Kuwaiti private sector to invest some of
its vast resources in Iraq's reconstruction;

- facilitating Status Of Forces agreements between Kuwait and
over 30 coalition partner countries, with more in the works;

- interceding with the GOK to facilitate transit for CPA
staff and many others, to include achieving a simple
procedure to avoid a $33/day fine for "overstaying" that was
being levied against personnel who had transited to Iraq
improperly.


9. (U) We expect our contribution to the Iraq effort will
increase in the coming months as the State Department beefs
up its contingent in Iraq and as Kuwaiti involvement in
Iraq's reconstruction ramps up.


10. (U) Baghdad minimize considered.
JONES