GOK MOVES CLOSER TO DEBT REDUCTION FOR IRAQ, NO

UNCLAS KUWAIT 004016 SIPDIS E.O. 12958: N/A TAGS: ECON EFIN PREL IZ KU SUBJECT: GOK MOVES CLOSER TO DEBT REDUCTION FOR IRAQ, NO PUBLIC STATEMENT YET ON AMOUNT OR TIMING REF: A. STATE 248796 ¶B. KUWAIT 3984 ¶1. (U) 22 November newspapers reported that "diplomatic sources asserted that Kuwait will write off 80 percent and more of the Iraqi debts, if there was an international consensus in the Club of Paris." The newspapers did not identify the diplomatic sources, and no one from the GOK has been quoted on record yet as saying that Kuwait would definitely provide comparable treatment to the Paris Club agreement. Diplomatic contacts tell us that the Foreign Minister was the unnamed GOK source. Other 22 November newspapers reported that Kuwait would write off between $6 and $6.5 billion of Iraqi debt. Prior to departing for the Sharm El-Sheikh conference, Foreign Minister Dr. Mohammed told Ambassador that the GOK favored substantial debt reduction and that Parliament would have to ratify any write-down of debt (Ref B.) ¶2. (U) Comment: While we appear to have a public commitment from the GOK to substantial debt reduction in principle, the actual method, amount, and timing of implementing the write-down is not clear. The GOK has already made statements similar to the proposed draft announcement (Ref A),but Post will continue to press for a clear statement by the GOK on Iraqi debt relief. End Comment. -------------- -------------- Visit Embassy Kuwait's Classified Website: http://www.state.sgov.gov/p/nea/kuwait/ -------------- -------------- Tueller