IRAQI PLANNING MINISTER TELLS KUWAIT ITG IS READY

C O N F I D E N T I A L SECTION 01 OF 02 KUWAIT 004905

SIPDIS

FOR NEA/ARPI; SIPDIS

E.O. 12958: DECL: 11/26/2015
TAGS: PREL ECON EAID PHUM PGOV KDEM ENIV IZ KU
SUBJECT: IRAQI PLANNING MINISTER TELLS KUWAIT ITG IS READY
FOR DEVELOPMENT PROJECTS; INVITES KUWAITI INVESTMENT IN IRAQ

REF: STATE 214617

Classified By: Ambassador Richard LeBaron for reasons 1.4(b) and (d)


1. (C) Summary: During a November 27 meeting, Ministry of
Foreign Affairs Undersecretary Khaled Al-Jarallah told the
Ambassador that the November 26 visit of Iraqi Planning
Minister Barham Saleh to Kuwait resulted in a step forward on
Kuwaiti-funded reconstruction projects in Iraq. The ITG
submitted proposals on using the GOK's $60 million grant and
would soon begin talks on the $440 million offered as loans.
Saleh told the Kuwaiti Foreign Minister that the upcoming
elections presented an opportunity to embark on economic
reform programs and the ITG had targeted the water and
electricity sectors for intensive development. Saleh also
called for Kuwaiti private sector investment in Iraq, saying
opportunities for joint ventures were plentiful and the
cooperation would strengthen bilateral relations. He also
recommended that money from the UN Compensation Commission be
used for joint environmental projects that would benefit
Iraq, Kuwait, and eventually the entire region. Al-Jarallah
said the debt forgiveness issue was touched upon and Kuwait,
which had made no effort to collect the debt, had no
intention of being "tough" on the issue. End Summary.

Encouraging Kuwaitis to Invest in Iraq
--------------


2. (C) Iraqi First Deputy Premier and Planning Minister Dr.
Barham Saleh traveled to Kuwait November 26 for meetings with
Foreign Minister Shaykh Dr. Mohammed Sabah Al-Salem Al-Sabah
and Minister of Planning and Minister of State for
Administrative Development Affairs Dr. Masouma Al-Mubarak.
According to Ministry of Foreign Affairs Undersecretary
Khaled Al-Jarallah, the meetings were very productive and
Saleh shared with his Kuwaiti counterparts a "strong vision
on the future of Iraq" and "good ides on how to strengthen
bilateral relations." Al-Jarallah told the Ambassador during
a November 27 meeting that Saleh identified joint business
ventures as the best way to advance relations between Kuwait
and Iraq. Saleh said there was huge business potential in
Iraq and encouraged Kuwaitis to take advantage of it. He
also said business ventures would help to change the
"prevailing Saddam Hussein mentality," reporting regular
negative comments in Iraq about Kuwaitis, especially by
members of the National Assembly. Business enterprises, he
argued, would help to open the minds of Iraqi citizens and
would benefit the Kuwaiti private sector. Al-Jarallah
confirmed Kuwaiti interest in investing in Iraq and said to
do so, the GOK would need the help and support of the U.S.

Ready for Reconstruction
--------------


3. (C) Saleh was optimistic about the future and said the
upcoming elections would mark a turning point in Iraqi
history and permit the implementation of economic reforms.
He cited the water and electricity sectors as priority
targets for development. On the subject of public services,
Saleh told the Kuwaiti FM that Iraq was finally ready to
receive the funds pledged by Kuwait for development projects,
with a focus on health, education, and electricity. The
Iraqi Transitional Government (ITG) would soon approach the
GOK on using the $440 million offered as loans and the Kuwait
Fund has already received proposals for the $60 million
offered as a grant. (Note: We will follow up with the
Kuwait Fund. End note.) Among the proposals for grant funds
are health and educational projects as well as an unspecified
"very important project for Sadr City." Saleh also proposed
that some funds earmarked to compensate governments under the
UN Compensation Commission instead be used to establish a
fund to finance projects in Iraq that would also benefit
Kuwait. Saleh preferred environmental projects that would
have a regional impact. Al-Jarallah said the GOK considered
the proposed use of UNCC funds to be a good idea.

Iraq's Debt to Kuwait
--------------


4. (C) Turning to debt, Saleh said the GOK had not sought
repayment from the previous regime and had not requested that
the ITG settle the obligations. He recommended that the two
governments look seriously at the debt issue and identify a
bilateral solution. Al-Jarallah told the Ambassador that the
GOK would not be "tough" with Iraq on debt and reminded him
that decisions affecting debt could not be made unilaterally
and required the approval of the National Assembly. The
Ambassador noted his understanding of prior Kuwaiti
statements that it would be guided by the Paris Club terms
which forgive 80 percent of Iraq's debt, but said full
forgiveness was desired. He also urged the GOK to make
public statements on forgiving Iraqi debt in order to help

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improve Iraq's standing in the international financial
markets.

No Comment on Iran
--------------


5. (C) Al-Jarallah said he also asked Saleh about the
extent of the Iranian influence in Iraq. Barham deflected
the question, remarking only that Iran was a large, important
country with which Iraq shared a long border.

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