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04KUWAIT2335 2004-07-27 06:35:00 CONFIDENTIAL Embassy Kuwait
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					  C O N F I D E N T I A L SECTION 01 OF 02 KUWAIT 002335 



E.O. 12958: DECL: 07/25/2014

REF: A. KUWAIT 1810 B. KUWAIT 2245

Classified By: Amb. Richard H. Jones for reasons 1.4 (b) and (d)

1. (C) Summary: On July 24, the Ambassador paid farewell
visits to Prime Minister Shaykh Sabah al-Ahmed Al-Sabah and
Foreign Minister Shaykh Dr. Mohammed al-Sabah. Discussions
centered largely on the situation in Iraq, including the
Interim Government's ability to secure the country in the
face of ongoing unrest and the current and future status of
Iraq's security forces. On the GOK's domestic agenda, the
Prime Minister and Foreign Minister both indicated the
government considered economic reform and development -- not
national security -- to be its highest priorities. The
Foreign Minister also informed the Ambassador that a planned
Amiri decree on Article 98 had been decided against; the GOK
instead plans to bring the signed Article 98 agreement to a
vote in the National Assembly in October. End Summary.

The Prime Minister


2. (C) Having recently returned from a four-nation,
economic-themed official tour through Asia, Prime Minister
Shaykh Sabah was focused on the economic gains Kuwait is
attempting to realize in the wake of the liberation of Iraq
and the removal of the threat posed by Saddam Hussein. The
Prime Minister emphasized that it was time for Kuwait to
start looking for ways to diversify its economy, and noted
that the agreements that had been signed during his trip,
along with the recently passed Foreign Investment Law, were
aimed at attracting foreign capital to the Kuwaiti economy.
He confirmed that the GOK would move forward with plans to
develop Bubiyan Island into a commercial port -- possibly
including rail ties into Iraq -- within four years.

3. (C) Turning to Iraq, Shaykh Sabah advised that the US
withdraw its troops from major population centers, allowing
the Interim Iraqi Government (IIG) to deal with the
insurgency. He said the IIG would ask for help when
necessary and observed that the US had already lost more than
enough troops in Iraq. On Kuwait's involvement in Iraq,
Shaykh Sabah said the GOK would "stay away" from direct
involvement there, opting to engage the IIG, many of whom he
said spend time in Kuwait. The Ambassador suggested that one
way for Kuwait to engage with Iraq would be to agree to the
Iraqi request that Kuwait sell Iraq 200 MW of electricity.
Shaykh Sabah promised Kuwait would sell the Iraqis the
requested electricity, if it could spare it.

4 (C) Inquiring about Iraq's military capabilities, the Prime
Minister shared that he had heard the United States would be
providing Iraq with aircraft. The Ambassador explained that
the only such aircraft he was aware of were for surveillance
or transport purposes. He assured the Prime Minster that
there were currently no plans for sales of fighter or bomber
aircraft to Iraq.

The Foreign Minister


5. (C) Fresh from the 'Iraq Neighbors Conference,' in Cairo,
Foreign Minister Shaykh Dr. Mohammed al-Sabah offered the
Ambassador a readout on developments at the meeting. He
reported that the group had agreed that its respective
Ministers of Interior would meet in Iran to discuss increased
cooperation on border and security issues. In addition, he
said, the Iraqis had proposed the creation of a "contact
group" between Iraq's neighbors, the UNSC and "other
international fora." Dr. Mohammed said the idea was tabled
after the Syrian and Iranian representatives expressed
concern that "other international fora" could include NATO.
He added that Kuwait had successfully objected to a Syrian
attempt to include language in the final communiqu
condemning Israel for infiltrating agents into Iraq. Dr.
Mohammed said the 'Neighbors' planned to meet again in Amman
in two to three months' time.

Engaging Iraq

6. (C) Eager to draw on Ambassador Jones' experience in Iraq,
Dr. Mohammed asked him what the Iraqi people thought of
Kuwait, and how Kuwait should engage Iraq. The Ambassador
said that Iraqis had suffered from decades of propaganda
about Kuwait, and would need to be handled carefully. He
advised against rushing into large projects in Iraq, but
suggested that responding to Iraqi requests, such as the
current request to buy excess generated electricity, would be
the optimal way to support the stabilization of Iraq and
engender good will.

7. (C) On the topic of the employees of a Kuwaiti company who
had been kidnapped in Iraq, the Ambassador suggested that
companies could insulate themselves from such problems in the
future by hiring Iraqis. Dr. Mohammed said he would pass
this suggestion on to Kuwaiti companies operating in Iraq.

Article 98

8. (C) Responding to the Ambassador's question on the
promised Article 98 Amiri decree (ref a), Dr. Mohammed said
the GOK had been advised instead by their legal department to
submit the Article 98 agreement to the National Assembly for
approval, and would bring the agreement to a vote soon after
the end of the current parliamentary recess in October. He
said the GOK did not want to repeat the events of early July,
when a special session of the Assembly to consider a recess
decree had been canceled due to the lack of a quorum (ref b).

9. (C) Turning to other domestic matters, the Foreign
Minister said the Prime Minister's trip to Asia had signaled
a new era for Kuwait. Noting that security issues had
dominated Kuwait,s political agenda for fifteen years, he
said the government would now turn its attention to "back to
trade." He clearly implied that Kuwait was eager to regain
its mantle as the Gulf's economic leader.


10. Shaykh Dr. Mohammed said that the Kuwaiti delegation to
the UN General Assembly would initially be led by the Prime
Minister, who would deliver the Kuwaiti speech, but leave
shortly thereafter for vacation (Note: Shaykh Sabah maintains
a vacation home in New Jersey. End Note.) The Foreign
Minister would lead the delegation from this point onward.

11. (C) Comment: The fact that both Shaykh Sabah and Dr.
Mohammed chose to highlight economic development as the new
priority issue for the GOK indicates that Kuwait may have
finally turned a psychological corner, leaving the dark cloud
of the invasion behind and attempting to regain their role as
the regional economic leader. However, such a role may bring
with it a fundamental shift in Kuwaiti attitudes towards its
traditional allies. Shaykh Sabah's visit to Asia, which
included a stop in China, may be a clue as to where the GOK
feels its economic future may lie. End Comment.