KUWAIT WANTS TO PLAY ROLE IN RECONSTRUCTION OF IRAQ

C O N F I D E N T I A L SECTION 01 OF 02 KUWAIT 000753

SIPDIS

STATE FOR NEA/FO, NEA/ARP, AND PRM
STATE PASS USAID FOR DCHA/OFDA

E.O. 12958: DECL: 1.6X6
TAGS: EAID PREL KU IZ
SUBJECT: KUWAIT WANTS TO PLAY ROLE IN RECONSTRUCTION OF IRAQ

Classified By: Ambassador Richard H. Jones for reasons 1.5 (B) and (D)

1.(U) This is an action message: see paragraph 8.


2. (C) Summary: Shaykh Nasser Sabah Al-Ahmed Al-Sabah, Senior
Advisor to Crown Prince Shaykh Saad Al-Abdullah Al-Salem
Al-Sabah and son of Foreign Minister Shaykh Sabah Al-Ahmed
Al-Jaber Al-Sabah, recently told Ambassador that Kuwait wants
to play an active and positive role in the long-term
reconstruction of Iraq. In addition to the security benefits
of building a prosperous and stable state on its northern
border, Kuwait believes there are significant economic
rewards to be reaped as well. He pointed out that creative
thinking about debts and compensation payments could
contribute to economic development for all. Shaykh Nasser
said he envisioned an Iraq that becomes a model for democracy
and development to other states in the region, including
Kuwait. He requested Embassy assistance in arranging the
right contacts in the USG to discuss Kuwait's vision for the
region and to coordinate Kuwait's role. End summary.


3. (C) On February 22 and February 28, Ambassador and
EconChief met with Shaykh Nasser Sabah al-Ahmed Al-Sabah.
Shaykh Nasser spoke at great length about the current and
future situation in Iraq; he shared his assessment that a
functioning democracy in Iraq is eminently possible, pointing
back in history to the "good period" Iraq enjoyed in the
1920's. He also said the US should not worry extensively
about Shia's striving for independence, and outlined the
possibilities of a federal system consisting of three states
(North, Central and South) or 18 Provinces. However, he
opined that the first two years will be the most critical
part of the reconstruction; in any case the basic
requirements for success would be democracy, development, and
tolerance.


4. (C) In the 2/22 meeting, Shaykh Nasser told the Ambassador
that Kuwait wanted to play a significant role in the
reconstruction of Iraq, and the Ambassador briefed Shaykh
Nasser on USG deployments of humanitarian relief personnel
who represent the first wave in our efforts to begin the
process. The Ambassador invited Shaykh Nasser to identify a
GOK representative for our teams to meet with, and Nasser
agreed to consult with Shaykh Sabah Al-Ahmad to identify the
appropriate interlocutor. A few days later Nasser called the
Ambassador to say that Minister of Commerce and Industry
Salah Al-Khorsheed had been designated, and the Ambassador
agreed to set up meetings for the appropriate USG personnel
to meet Khorsheed once they had arrived in Kuwait. (NOTE:
Khorsheed is expected to resign his post in the next few
months in preparation for elections to the National Assembly
expected later this year. END NOTE.)


5. (C) On 2/28 Shaykh Nasser expanded on his earlier
thoughts, and reminded Ambassador of their discussions in
mid-2002 about his "vision" for a rail, sea, and air
transportation hub (and extending across the Iraqi and Saudi
deserts all the way to Jordan, as well as across the Shatt
al-Arab into Iran) where raw materials and labor from China
and the Far East, Central Asia, and Africa could be combined
with the capital and energy resources of the Persian Gulf to
produce intermediate and finished products for Asian and
European markets. Nasser said that the reconstruction of
Iraq could be an excellent opportunity to advance his ideas,
which he continues to refine and develop. He again
reiterated his desire to meet with the appropriate USG
officials to share his ideas and to see how they could be
coordinated with USG plans for Iraq's reconstruction.


6. (C) Shaykh Nasser noted that Kuwait has about USD 178
billion of compensation claims still before the UN
Compensation Committee; about USD 115 billion of those
represented claims of the Kuwaiti Government. Nasser said
the government expects to receive about USD 35-40 billion of
the claimed amount. He said that the GOK should be inventive
about collecting the claims, suggesting that Iraqi
investments in infrastructure development and joint projects
of interest to the GOK -- building gas, oil and or water
pipelines, for example -- might be credited against its
compensation debt to the GOK.


7. (C) Ambassador encouraged Shaykh Nasser to ensure the GOK
interest in this regard was made public; this could help to
begin rebuilding goodwill between the Iraqi and Kuwaiti
peoples, and would facilitate international coordination.
Nasser agreed with the Ambassador and said he'd consult with
the Foreign Minister and the Crown Prince on this point. The
Ambassador suggested that it might be desirable to create
some type of international forum to advance long-term
projects; EconChief added that such a committee could call
upon the expertise of IFI's and others to flesh out the
technical details of proposals and projects. Nasser agreed a
joint team would be a good idea, but rejected significant IFI
involvement initially, saying he wanted to work directly with
the USG (as the "custodian" of Iraq in the aftermath of a
military strike) to define the scope and outline of
development plans.


8. (C) ACTION REQUEST: Post understands LTG (ret.) Jay
Garner, head of OSD's new Office for Reconstruction and
Humanitarian Affairs, along with Ambassador George Ward
(Humanitarian Assistance),USAID officer Lew Lucke
(Reconstruction),and Michael Mobbs (Civil Administration)
will soon be setting up shop in the region. We intend to
introduce these officials to Al-Khorsheed and to Shaykh
Nasser at their earliest convenience. Post requests guidance
on any more appropriate interlocutors, and on any parameters
that should guide our discussions with the GOK on Iraqi
reconstruction. One caveat: so far, Sheikh Nasser is the
only official who has been eager to engage on this topic.
The extent to which his views represent the GOK's is unknown.
JONES