(C) SCENESETTER FOR SECRETARY'S VISIT

S E C R E T SECTION 01 OF 03 KUWAIT 000777

SIPDIS

NOFORN

STATE FOR NEA/ARP, NEA, PM, S/WCI
TUNIS FOR NATALIE BROWN

E.O. 12958: DECL: 03/06/2014
TAGS: OVIP PREL MARR IZ KU
SUBJECT: (C) SCENESETTER FOR SECRETARY'S VISIT

REF: A. KUWAIT 368

B. KUWAIT 379

C. KUWAIT 728

D. KUWAIT 758

Classified By: AMB. RICHARD H. JONES; REASON 1.4 (B, D)


1. (C) Mister Secretary, welcome back to Kuwait. The
Kuwaiti leadership is looking forward to meeting with you.
We are seeking to confirm an appointment with the Foreign
Minister, Shaykh Dr. Mohammed Sabah al-Salem al-Sabah, on
Thursday evening, March 18, and a meeting with the Prime
Minister, Shaykh Sabah al-Ahmed al-Jaber al-Sabah, Saturday
morning, March 20.

(U) KUWAIT: THE ONE INDISPENSABLE ALLY
--------------


2. (C) Kuwait was the one indispensable ally for Operation
Iraqi Freedom. It is unique: the only Arab state where both
the government and public opinion openly supported us in
eliminating Saddam Hussein's regime by force. The Kuwaitis
understand that they need us to succeed in Iraq, and they are
eager to help. They have provided strong political support
to the Iraqi Governing Council, most recently by inviting
Iraq to the Neighboring Countries Ministerial held here
February 14-15, as a full and equal participant. The
Government and private sector are working together to
crystallize 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
over $122 million for humanitarian operations. The GOK says
it will consult with the Iraqis on how best to spend the
remaining half-billion dollars.

(C) SHARING THE BURDEN
--------------


3. (C) The GOK continues to view the US as its long-term
partner and protector. It understands, perhaps better than
most, that even though we do things in a very heavy,
expensive way, we get results. They like being on the
winning team, and feel vindicated for having sided with us in
the liberation of Iraq. That said, this is a small country,
rich on a small scale, and our Iraq operations dwarf its
income. The Kuwaitis also want their contributions
acknowledged, and they need to know what we expect them to
provide and for how long. The GOK's Assistance-In-Kind (AIK)
fuel for US and Coalition forces remains a pending issue:
from $8 million in 2002, it skyrocketed to well over $400
million in 2003, and is projected to be around the same level
for 2004. This represents about 22 percent of jet-fuel
production, 4.5 percent of government revenues from oil
sales, and 1.2 percent of GDP, proportionately equivalent to
some $150 billion in the US. Since A/S Bloomfield's
successful visit in January (refs A, B),the fuel has
continued to flow at the rate of about 1.3 million
gallons/day (worth approx. $1.2 million),but who ultimately
will pay for it remains undetermined.


4. (S/NF) A serious Operational Impact: reaching final
agreement on the AIK fuel issue is critical to our continued
ability to deploy forces into Kuwait. In but the most recent
example of deployment problems caused by this lack of a final
agreement, in February CENTCOM requested the basing of two
(2) EC-130H Compass Call aircraft at Kuwait,s Ali al-Salem
Airbase. These aircraft were being deployed specifically to
provide jamming and sophisticated electronic warfare support
to defeat Improvised Explosive Devices (IEDs) that are
responsible for the majority of coalition casualties in Iraq.
The Chief of Staff of the Kuwait Armed Forces did not allow
the deployment based on the need to reach an arrangement on
the provision of fuel. Essentially we are now unable to move
any additional aircraft into Kuwait without resolution of
this issue. To date, ground force deployment has not been
affected (presumably because the forces are rotating to Iraq
and not remaining in Kuwait). However, the freeze on
aircraft basing is having an increasingly serious operational
impact. Request you raise the issue of AIK Fuel with the
Prime Minister, encouraging his government,s continued
support to the US and Coalition through provision of this
fuel and resolution of what appears to be an
inter-ministerial financing disagreement.


5. (C) 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, we believe primarily for budgetary reasons. OSD
will host the bilateral Joint Military Commission (JMC),the
first since 1999, on March 30-31 in Washington. Kuwait's
Minister of Defense, Shaykh Jaber Mubarak al-Hamad al-Sabah
will attend. Immediately following, on April 1, SECDEF and
Deputy Secretary Armitage are scheduled to host a ceremony to
honor and finalize the designation of Kuwait as a Major
Non-NATO Ally (MNNA). Foreign Minister Shaykh Dr. Mohammed
al-Sabah is scheduled to attend the MNNA ceremony.


6. (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 payments to US amount to $207 million.
Includes costs for base operations, supplies, personnel
support and military exercises.

--- Assistance in Kind (AIK). Estimated cost sharing of $73
million. Includes fuel, food, TELECOM, laundry, and utilities
for 20,000-40,000 US military personnel.

--- Foreign Military Sales (FMS): Kuwait also pays $308
million in FMS payments to the US Treasury annually.

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

- Previously planned and agreed construction. Kuwait has
previously agreed, and began construction of, Camp Arifjan in
order to move ARCENT/CFLCC current operations off Camp Doha.
Funding for completion has been delayed by GOK. This delay
has resulted in extending &split base8 operations for CFLCC
at increased cost and loss of efficiency. Request you
suggest that Kuwait fully fund the remaining $55 million in
construction that it has previously agreed to complete. An
extensive program of safety and maintenance upgrades to
Kuwait,s airbases has likewise been delayed, apparently for
financial reasons. While not as mission critical as the Camp
Arifjan project, this $50 million project also should be
completed by Kuwait as they have previously agreed.

- In addition to the above, Kuwait continues to provide as
AIK fuel for US forces associated with Operation IRAQI
FREEDOM operating in/from Kuwait; through February 2004, this
is estimated at 551 million gallons worth $463 million (rate:
$0.84/gal.),currently averaging 35 million gallons per
month.


7. (S) Strategic Aerial Port of Debarkation/Embarkation
(APOD): The principal APOD servicing not only Kuwait but
also Iraq is located at Kuwait City International Airport.
Kuwait has requested the US relocate that operation to enable
it to pursue commercial development there. CENTCOM is
staffing a proposal to relocate the APOD to Kuwait,s Ali
al-Salem Airbase, to include a significant amount of
construction of runway and facilities. While Kuwait has not
been formally engaged on these plans it has been informally
notified. We expect that CENTCOM and OSD will soon engage
Kuwait in discussions seeking its approval of the concept and
exploring possible burdensharing of the potential $500
million construction costs involved.


8. (C) Iraq Debt Relief: Secretary Baker obtained the Prime
Minister's support for substantial reduction of Iraq's debt
this year. The GOK has made clear it intends to act in
concert with the Paris Club, and only when there is a
sovereign Iraqi government to negotiate with directly.
Iraq's bilateral debt to Kuwait is estimated at $8 - 15
billion. This is apart from Gulf War reparations which are
dealt with by the UNCC under UNSC resolutions.

(C) COUNTER-TERRORISM COOPERATION
--------------


9. (S) Although general CT cooperation has been excellent
throughout OEF, since a change in Ministers of Interior last
summer, the GOK has become slow to grasp the seriousness of
the Sunni Islamist threat among Kuwaitis. It needs to
respond more quickly and substantively to our requests for
information on Kuwaiti Sunni extremists, especially those
active in Iraq.

(C) GUANTANAMO
--------------

10. (S) Improved cooperation would strengthen the GOK's case
on Guantanamo detainees: during Secretary Rumsfeld's
February 22 visit, Prime Minister Shaykh Sabah spent much of
their meeting pressing for the Kuwaiti Guantanamo detainees
to be repatriated. Even after SECDEF made clear they are
dangerous individuals, he insisted he wanted them back,
stating they could be incarcerated pending trial and the GOK
could adequately monitor their activities if they were
released. Recent reports that British detainees would be
released from Guantanamo have increased domestic political
pressure on the GOK to bring the Kuwaitis home. The GOK's
critics argue that this should be easy if its relations with
us are as good as it claims. Of course such arguments
conveniently ignore the strong measures the UK and other
governments have promised to take against repatriated
detainees.

(C) ARTICLE 98
--------------


11. (C) Kuwait signed an Article 98 agreement with U/S
Bolton last June but after deciding not to join the ICC
itself has dragged its feet on bringing the agreement into
force. This is no surprise, given the GOK's basic policy of
maintaining good relations with all major powers, especially
UNSC members. In a hopeful sign, the Foreign Minister told
the Ambassador March 6 (ref D) that Kuwait will not be a
party to the Rome Statute and does not need or want to seek
parliamentary ratification of the Article 98 agreement. He
did not dispute the Ambassador's argument that an Article 98
agreement could be useful even between two non-signatories,
and left the impression that the GOK will soon notify us of
entry into force.

(C) IRRITANTS
--------------


12. (C) Trafficking In Persons: Since you raised the issue
with then-Minister of State for Foreign Affairs Shaykh Dr.
Mohammed al-Sabah (now Foreign Minister) last April, the GOK
has made progress on the major TIP problem in Kuwait, the
exploitation of (mostly female) domestic servants by some
employers. The GOK has not fully engaged with us, however,
and lags behind other GCC states that have had more time to
come to grips with the issue because they were listed in the
TIP Report earlier than Kuwait.


13. (C) Special 301: After a promising upsurge in 2002,
Kuwait took little action to protect IPR in 2003. Its rate
of piracy of optical media is considered the worst in the
Gulf, partly because other states have made dramatic
improvements in the past few years. In keeping with
industry's recommendation, Kuwait is likely to be escalated
to Special 301's Priority Watch List this year (ref C).


14. (U) US Visas: Student-visa applications in Kuwait rose
about 25 percent in 2003, rebounding from the post-9/11
decline. The Kuwaiti government and public have not made an
issue of the recent requirement for biometric data
(electronic fingerprint) collection.

(U) RECOMMENDED PRESS EVENT
--------------


15. (SBU) Post recommends a roundtable with editors-in-chief
of local newspapers (5-6 individuals).


16. (U) Baghdad minimize considered.
JONES