KUWAIT: 2004 ANNUAL REPORT TO CONGRESS ON ALLIED

S E C R E T SECTION 01 OF 05 KUWAIT 005788

SIPDIS

STATE FOR PM/B, PM/AS, AND NEA/ARP

E.O. 12958: DECL: 12/22/2013
TAGS: PREL MCAP MARR MASS KU
SUBJECT: KUWAIT: 2004 ANNUAL REPORT TO CONGRESS ON ALLIED
CONTRIBUTIONS TO THE COMMON DEFENSE

REF: STATE 305999

Classified By: Classified By CDA John Moran 1.4 (A),(B),and (D).


1. (U) Note on classification: Kuwait's extensive support for
U.S. and allied security forces in the country is sensitive
domestically and within the region. While all of the figures
in the unclassified and the sensitive but unclassified
sections of this report are from unclassified sources, the
assembled data -- necessary to portray to Congress the
breadth of Kuwaiti support -- could be misused. Addressees
should conform strictly to classification guidelines in the
distribution of this information. End note.


2. (U) POC for questions regarding this report is PolOff Gene
Del Bianco, 965-539-5307 ext. 2533 (office),538-0282 (fax),
delbiancogj2@state.gov

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TEXT OF REPORT
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3. GENERAL ASSESSMENT:


A. IMPORTANT POLITICAL AND ECONOMIC DEVELOPMENTS

A.1. (SBU) Kuwait's strong commitment to shared U.S. security
objectives remained firm in 2003. Prior to the commencement
of Operation Iraqi Freedom (OIF),Kuwait continued its policy
of allowing US and Coalition troops unfettered access to its
air, land and sea facilities. During OIF, Kuwait,s
steadfast support of US and Coalition efforts was critical to
their success. In November, the GOK Minister of Defense
publicly affirmed the &defensive8 nature of the Kuwait
Armed Forces. Despite the removal of Saddam Hussein from
Iraq, Kuwait continues to believe that reliance on the U.S.,
and its continued presence in the region, is vital to Kuwaiti
national security.

A.2. (U) The continued violence between the Israelis and
Palestinians remains a significant concern of the GOK.
Despite Kuwait continued strong support for US military
cooperation, the GOK has recently declined to participate in
bi-lateral military exercises citing domestic budget concerns.

A.3. (SBU) Kuwait is participating in the GCC Mutual Defense
Agreement.

A.4. (U) Strong oil prices in 2002 generated a significant
GOK budget surplus that has continued through 2003. Although
government expenditures increased about 8%, Kuwait,s fiscal
surplus in 2003 was 18% of the GDP. Defense spending remains
constant at about 5 percent of GDP. Defense spending was
approximately 11 percent of the FY 2003-2004 budget. The
Ministry of Defense budget listed in the official GOK-issued
FY 2003-2004 report is 643,623,000 Kuwaiti Dinar (USD
2,123,965,800); the national budget listed for FY 2003-2004
is 5,828,000,000 Kuwaiti Dinar (USD 19,232,400,000).


B. MAJOR DEVELOPMENTS IN DEFENSE POLICY:

B.1. (U) The GOK's support of the United States during
Operations ENDURING FREEDOM and IRAQI FREEDOM has been rapid
and robust. This includes increased security for U.S.
Department of Defense (DOD) and Department of State (DOS)
installations and personnel, approval for substantial force
deployments, and basing.

B.2. (U) Defense Resource Management System (DRMS). Kuwait,s
request for assistance in conducting a review of its armed
forces has been granted. O/A February 04, Kuwait will
participate in a DRMS. Changes in the threat situation
brought on by the end of the Saddam Hussein regime
necessitated that Kuwait identify the next potential threats
to its national security and the best way to organize and
posture its military to meet those threats.

B.3 (C) Joint Military Commission (JMC). A JMC is planned
for March 04. The JMC will provide Kuwait a venue to review
bi-lateral issues and conduct coordination between the U.S.
and Kuwait. It will also serve as a forum to establish
agreements and financial structures to support agreed-upon
common strategic and operational objectives.
B.2. (SBU) FOREIGN MILITARY SALES: Payments received at
DFAS-Denver for U.S. FY 20031: USD 293,591,157. The GOK in
2003 implemented two major Foreign Military Sales (FMS)
programs (Apache and Aerostat) and is considering a number of
potential major programs for FY 2004.

B.2.1 (SBU) A Letter of Offer and Acceptance (LOA) for 16
AH-64D Apache helicopters and 8 Longbow Fire Control Radars
was signed by the GOK on 31 August 2002. The request also
embraces the Total Package Approach (TPA) for program
support. The current LOA signed is for USD 870 million.
B.2.2 (SBU) The GOK signed an LOA for the 71-meter AEROSTAT
system with TPS-63 radar based on pricing and availability
assessment. The current LOA signed is for USD 95 million.
B.2.3 (SBU) Kuwait is considering the purchase of surface
launched AMRAAM; the estimated program value is USD 333
million.
B.2.4 (SBU) Kuwait is considering an Avionics Modernization
Upgrade for its F/A-18 Fleet estimated at approximately USD
450 Million.

B.2.5 (SBU) Kuwait is considering Patriot Support Equipment
CONFIG-3 Modernization Kits, training spare parts, test
equipment etc, estimated at USD 131 Million.

B.3. (SBU) Kuwait has allowed U.S. forces to utilize the
following areas and facilities.

B.3.1 (U) Camp Doha. The CFLCC Headquarters is based at Camp
Doha, as are many military and civilian personnel and
associated equipment.

B.3.2 (U) Camp Arifjan. Newly constructed by Kuwait for, and
occupied by, U.S. military forces, Camp Arifjan supports
theater logistics requirements.

B.3.3 (U) Commando Camp. A portion of the Kuwaiti Commando
Camp was occupied by the Headquarters of the 1st Marine
Expeditionary Force (I MEF) prior to the start of Operation
IRAQI FREEDOM. The camp is available for future USMC
operational requirements.

B.3.4 (S) Kuwait Navy Base (KNB). KNB provides a Joint
Logistics Over the Shore (JLOTS) capability for U.S. forces.
During 2003, a total of 142 ships carrying a total of 33,903
pieces of equipment and 17,708 passengers have discharged and
onward moved through KNB. A total of 96 ships carrying
24,161 pieces of equipment and 15,912 passengers have back
loaded thru KNB.

B.3.5 (U) Shuaybah Port. Portions of the commercial port are
used by CFLCC forces to receive military equipment.

B.3.6 (U) Ahmed Al-Jaber Air Base was used extensively during
Operations OIF and OEF. All USAF personnel have now departed
the base, however, it is available as needed for future U.S.
military operations.

B.3.7 (U) Ali Al-Salem Air Base hosts the USAF 386th AEW.

B.3.8 (U) Mubarak Air Base. U.S. military forces utilize the
airbase as an Aerial Port of Debarkation and Embarkation
(APOD/APOE) servicing passengers and cargo.

B.3.9 (U) Desert Camps. CFLCC used as many as eight desert
camps for basing and support during 2003.

B.3.10 (SBU) Desert Training Areas. Kuwait afforded
unprecedented training access to U.S. forces in 2003. In
addition to normal range utilization for training and
gunnery, Kuwait set aside approximately 70% of its total land
area for U.S. military training and bed-down.

B.4. (S) Kuwait is one of the few regional countries to allow
U.S. Air Force strike aircraft to launch offensive operations
into Afghanistan and Iraq without restriction.

B.5. (C) The GOK has agreed to the designation of the Kuwait
Armed Forces Hospital (KAFH) as a casualty reception facility
in support of OIF/OEF. CFLCC has deployed a 120-person
Combat Support Hospital with equipment to staff specific
wards and specialty clinics at KAFH in order to provide Level
III medical capabilities in combination with the Kuwaiti
staff.

B.6. (S) The normally robust Kuwait-U.S. military bilateral
exercise program
has been substantially reduced due to U.S. operational
commitments and Kuwait Armed Forces budget constraints.

B.7. (S) As of December 1013, U.S. troops in-country number
approximately 25,326. The personnel are distributed as
follows:

(1) (S) U.S. Army: 23,432.

--(S) CFLCC/ARCENT: The Coalition Force Land Component
Command (CFLCC) and the U.S. Army Central Command (ARCENT)
Kuwait headquarters are at Camp Doha. CFLCC/ARCENT conducts
Theater Security Cooperation activities, provides Title
X/Executive Agent support to deployed U.S. & Coalition
forces, theater sustainment/deployment support to CJTF-7, and
support as appropriate to CJTF-180. Concurrently, maintains
a forward-based capability to organize, plan, and on order
Command and Control joint/combined land combat operations
across the USCENTCOM AOR.

-- (S) Other Army Forces in Kuwait include: the 377th Theater
Support Command (TSC) at Camp Arifjan- The TSC along with its
subordinate units provides logistical support and Reception,
Staging and Onward Movement and Integration of component
forces arriving in theater. The 111th Engineer Group, 335th
Signal Command, 111th Ordnance Group, 3rd Military Police
Group, and Aviation Task Force-Kuwait provide additional
support.

(2) (S) U.S. Air Force: 1,647.

-- (S) Ali Al-Salem AB (386th AEW). U.S. aircraft continue to
be based at Ali Al-Salem Air Base supporting OIF and OEF
including: AEG C-130 and C-23 aircraft providing
Intra-theater liftAEG ; C-130E aircraft providing signals
intelligence; and MC-130 and AC-130 Special Operations
Aircraft.

(3) (S) U.S. Navy: 242.

-- (S) Naval Special Warfare and USN Force Protection
personnel operate at several locations including KNB and
Shuaybah Port.

(4) (U) U.S. Marine Corps: 5

-- (U) USMC provides liaison personnel at Camp Doha.


C. GRANT AID, PEACEKEEPING, HUMANITARIAN OPERATIONS, AND
COUNTERPROLIFERATION AND NUCLEAR THREAT REDUCTION:

(U) In support of humanitarian assistance operations in Iraq,
the GOK has contributed an estimated USD 120 million. These
contributions include food, water, medicine, fuel, and
various other items critical to the rebuilding of Iraq.


D. HOST NATION'S CONTRIBUTIONS TO THE WAR ON TERRORISM:

(SBU) The Kuwait Armed Forces have not offered or contributed
forces to the coalition with the exception of approximately
100 translators, and a few personnel involved in the search
for Kuwaiti POWs and missing persons in Iraq from the
1990-1991 Iraqi occupation of Kuwait. However, their in-kind
support has been significant. The GOK has fully supported
all OEF and OIF requests. This includes block over-flight
and basing clearances for aircraft, hospital support, and
bed-down of significant force deployments. Kuwait security
forces have responded to all requests for additional security
measures to protect U.S. government personnel and
installations, working closely with U.S. security officers on
a number of force protection initiatives.


4. (SBU) DIRECT COST SHARING: Approximately USD 736,234,762
("Burdensharing" in 4A and "AIK/Other" in 4B).


A. (SBU) BURDENSHARING: USD 207,289,011 for FY 2003. This
figure includes costs listed below for base operations,
supplies, personnel support and military exercises, and is
distributed as follows:

A.1. (SBU) BASE OPERATING COSTS: USD 112,303,141. Includes
the Combat Support Associates Contract for Camp Doha
operations, OCONUS base support, and CONUS base support.

A.2. (SBU) SUPPLIES (NON-EXERCISE): USD 19,307,595. Includes
rations, package petroleum products, barrier material,
medical, and repair parts.

A.3. (SBU) PERSONNEL SUPPORT: USD 5,444,129. Includes
civilian employee pay, and travel.

A.4. (SBU) Exercises: USD 1,654,146. This includes
bilateral exercises sponsored by CENTCOM and components
conducted annually in Kuwait.

A.5. (SBU) CONTRACTED SECURITY SERVICES: Payments to Combat
Security Associates (CSA): USD 76,200,000


B. (U) ASSISTANCE IN KIND (AIK)/OTHER DIRECT OR INDIRECT COST
SHARING CONTRIBUTIONS*: USD 556,665,741. This includes the
following:

B.1. (SBU) Food Service: 48,378,976.
B.2. (SBU) Utilities: 8,961,407.
B.3. (SBU) Telecom: 620,310.
B.4. (SBU) Laundry: 11,634,953
B.5. (SBU) Medical: 3,435,590.
B.6. (SBU) Fuel: 483,634,505. Provided to US forces
supporting Operation IRAQI FREEDOM operating in/from Kuwait
(period January 03 through Nov 03): est. 542,755,363 million
gallons (rate: $0.84/gal.),currently averaging 33 million
gallons per month.

* Data is for the period of 1 JAN 03 through 29 SEP 03 with
extrapolated data for 1 OCT 03 through 31 DEC 03.


5. INDIRECT COST SHARING:


A. (U) RENTS: All rent figures are included in direct cost
sharing figures.


B. (U) TAX CONCESSIONS/CUSTOMS/TOLLS/DUTIES:

B.1. (U) OFFICIAL PURCHASES OF SERVICES, MATERIALS, AND
SUPPLIES: Tax free.

B.2. (U) OFFICIAL IMPORT EXEMPTIONS: Customs fees waived for
all military imports for U.S. forces.

B.3. (U) TOLLS: N/A U.S. forces are exempted from port fees
and tolls.

B.4. (U) VALUE ADDED TAXES ON PERSONAL PURCHASES. VAT does
not exist in Kuwait.

B.5. (U) POSTAL: All DOD and DOS personnel are serviced by an
Army Post Office (APO),based at the American Embassy.
Deployed forces serviced by respective unit APOs.

B.6. (U) UTILITIES: Included under Direct Cost Sharing
figures. Water and electrical power provided free for all
U.S. military facilities.

B.7. (U) TELECOMMUNICATIONS. Included under Direct Cost
Sharing figures.N/A.


6. GRANT AID, PEACEKEEPING AND HUMANITARIAN ASSISTANCE,
COUNTERPROLIFERATION, AND NUCLEAR THREAT REDUCTION:


A. (U) GRANT AID: Kuwait is a major bilateral aid donor to
lesser-developed countries, particularly in the Arab world,
Africa, and the Balkans. According to the latest figures
available, Kuwait provided over USD 419 million during 2003
in assistance to the developing world through soft loans and
grants. This amount is approximately 1 percent of Kuwait's
GDP.


B. (U) UN PEACEKEEPING AND OTHER HUMANITARIAN ASSISTANCE: N/A.


C. (U) CURRENT CONTINGENCY OPERATIONS: Kuwait currently
supports Operations IRAQI FREEDOM and ENDURING FREEDOM.


D. (U) COUNTERPROLIFERATION CONTRIBUTIONS: N/A.


7. N/A

8. N/A

9. N/A
10.(U) GROSS DOMESTIC PRODUCT FOR 2002 AND ESTIMATED GROSS
DOMESTIC PRODUCT FOR 2003: GDP for 2002 was USD 35.5 billion
and estimated GDP for 2003 is USD 42.8 billion.
11.A. (SBU) DEFENSE EXPENDITURES: USD 2.145 billion (Note:
the Kuwait fiscal year is April - March. This figure
represents the Kuwait FY2003 budget).
11.B. (U) DEFENSE PERSONNEL as of 2003:

11.B.1. (SBU) CIVILIANS EMPLOYED BY THE GOVERNMENT IN
DEFENSE RELATED ACTIVITIES: Less than 1000.

11.B.2. (SBU) NUMBER OF ACTIVE DUTY MILITARY PERSONNEL:
Approximately 21,000.

12 B.3. (SBU) NUMBER OF COMMITTED RESERVES: Approximately
5,000.
MORAN