KUWAIT: 2005/2006 REPORT TO CONGRESS ON ALLIED

S E C R E T SECTION 01 OF 07 KUWAIT 000407

SIPDIS

SIPDIS

STATE FOR PM/AS, PM/SNA, NEA/ARPI, DOD OSD/PA&E,
OASD/ISA/EUR, OASD/ISA/NP, OASD/ISA,AP, OASD/ISA/NESA,
OASD/ISA/BTF

E.O. 12958: DECL: 02/06/2016
TAGS: PREL MCAP MOPS KU
SUBJECT: KUWAIT: 2005/2006 REPORT TO CONGRESS ON ALLIED
CONTRIBUTIONS TO THE COMMON DEFENSE

REF: 05 STATE 223383

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


1. (U) Note on classification: Kuwait's extensive support
for U.S. and Coalition troops in the country is sensitive
both domestically and in the region. While all of the
figures in the unclassified and the sensitive but
unclassified sections of this report are from unclassified

SIPDIS
sources, the assembled data -- necessary to portray to
Congress the breadth of Kuwaiti support -- could be misused.
Addressees should conform strictly to classification
guidelines in the distribution of this information. End note.


2. (U) POC for questions regarding this report is Poloff
Andrea F. Gastaldo, 965-259-1533 (office),259-1051 (fax),
GastaldoAF2@state.gov (unclassified),or
GastaldoAF@state.sgov.gov (classified).


TEXT OF REPORT
--------------


3. General Assessment:


A. IMPORTANT POLITICAL AND ECONOMIC DEVELOPMENTS AND CHANGES:

A.1. (S) Kuwait's strong commitment to shared U.S security
objectives remained firm during 2004 and 2005 although a
significant shift within the relationship took place. Kuwait
now views the mil-mil relationship with the U.S. as one where
they stand shoulder-to-shoulder with the U.S. rather than one
where they stand a step behind on decisions and planning.
This shift has not lessened the degree in which the GOK
supports the U.S. or the Global War on Terror (GWOT) but,
rather, asserts Kuwait's security needs and political status
within the region in the context of coordination and
cooperation with the U.S. Prior to the commencement of
Operation Enduring Freedom (OEF) and Iraqi Freedom (OIF),
Kuwait continued its policy of allowing U.S. and Coalition
troops unfettered access to its air, land, and sea
facilities. During the buildup to OIF and subsequent
military action, Kuwait's steadfast support of U.S. and
Coalition efforts was critical to Allied success. Kuwait
continues to believe that reliance on the U.S., and its
continued presence in the region, is vital to Kuwaiti
national security but it also has concerns on the diplomatic
and political costs of being America's foremost ally in the
Gulf region.

A.2. (C) The military detention of twelve Kuwaiti detainees
in Guantanamo Bay remained a sore point for the GOK on the
domestic front during the reporting period. Heavy public
pressure from families rights' groups and some members of
Parliament resulted in repeated inquiries into the possible
release of the twelve. In 2005, six of the twelve were
returned to Kuwait to stand trial (one was convicted; the
other five remain detained while investigations continue),
but pressure continues for them to be released. Press
reports often publish articles on Guantanamo detainees which
they contrast with statements outlining some of the support
U.S. forces receive in country.

A.3. (C) The GOK continued to decline to participate in
bilateral exercises during the reporting period. Although no
reasons are given and budgetary concerns are no longer cited
as a factor, there is a perception that the need for the
exercises is reduced since the fall of Saddam's regime.
Military training program participation has also declined; no
factors within the bilateral relationship are cited.

A.4. (U) Kuwait is a participant in the GCC Mutual Defense
Agreement. No planned expansion of the Peninsula Shield
Force has been reported for Kuwait and no exercises have been
held with GCC countries, on a group or individual basis,
during the reporting period. Economic gains, seen through
the increase in budget surplus, have resulted in a budgetary
increase for all government ministries, including the
Ministry of Defense. This has resulted in an increase in FMS

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cases for 2006 (noted in para B.6).


B. MAJOR DEVELOPMENTS IN DEFENSE POLICY:

B.1. (S) The rise of the insurgency and security issues
within Iraq remain a significant concern for the GOK.
Officials within the Ministries of Defense, Interior, and
Foreign Affairs voice their concerns about the future
offensive capabilities of the Iraqi forces, but are also wary
of the public perception of the visible foreign troop force
presence within Kuwait. The GOK is fully aware that its
wide-ranging support of U.S. and Coalition troops has made
OIF and, to a lesser degree, OEF possible and now asserts
itself as a participant rather than an observer in future
plans for U.S. basing in country. Kuwaiti officials view
that support as sometimes costly in their dealings with other
regional countries. Since the end of major combat operations
in Iraq, GOK officials are looking for a stricter
interpretation of the DCA and subsequent GOK support.
Nevertheless, the GOK has no plans to end or diminish the
support which is above and beyond the parameters of the
Defense Cooperation Agreement (DCA) signed in 1991.

B.2. (S) Kuwait's support structure for the DCA and
subsequent OIF/OEF logistics appears to be suffering from
strain. KMOD officials have raised questions defining which
requests are DCA and which requests are wartime contingency
support requests. The payment for fuel for aircraft in
support of OIF/OEF, which had been supplied free-of-charge
from late 2002 until March 2005, is now a constant issue of
concern and the mil-to-mil relationship is being handled more
by accountants than by officers in uniform. Failure to sign
a long-term contract with the USG has led to
inter-ministerial arguments, a slowdown in fuel flow to
Al-Mubarak and Ali Al-Salem airbases as well as the very real
threat of a fuel cut-off.

B.3. (U) There have been no steps to transform military
capabilities in order to leverage interoperability with U.S.
and other foreign military forces.

B.4. (U) Kuwait has steadily increased its humanitarian
relief operations in 2004 and 2005. The GOK gave the Iraqi
government USD 10 million to aid the victims of the March
2005 Bridge of Martyrs stampede in which almost 1,000 Iraqi
Shias were killed. The GOK has committed USD 125 million in
reconstruction grants to Iraq, and USD 440 million in soft
loans. USD five million has already been distributed to the
Najaf area. In January 2005 the GOK agreed to provide USD 100
million in direct aid for tsunami victims. In September
2005, the GOK pledged USD 500 million to assist victims of
Hurricane Katrina, and in October 2005 the GOK pledged USD
100 million to Pakistan's earthquake ravaged areas.
Additionally, the Humanitarian Operations Center (HOC) under
the auspices of the GOK, has sent USD 10 million worth of aid
in the form of food, medical supplies, school supplies, and
office equipment into Iraq. That aid was from both NGO
sources as well as direct GOK assistance. The GOK has also
facilitated the transit of Iraqi medical patients from Iraq
to the U.S. and other Coalition countries for the purpose of
medical treatment. To this end, the GOK issued over two
thousand visas to Iraqi citizens, a group that was formerly
not allowed into the country due to earlier hostilities.

2004

B.5.1. (C) Joint Military Commission (JMC). A JMC was held
in Washington, D.C. during March-April 2004. The JMC
reviewed outstanding issues from the 1999 meeting and
introduced new issues and initiatives, including enhanced
Consequence Management capabilities / bilateral plans in
Kuwait and discussion of size of force to be financially
supported in Kuwait. Kuwait has offered to support / host a
battalion-sized task force in country. This force is in
addition to a brigade set of pre-positioned equipment to be
stored in Kuwait.

B.5.2. (SBU) Kuwait Strategic Review (KSR). In 2003, Kuwait
requested assistance in conducting a strategic review. In
2004, a team from the Defense Resource Management System

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(DRMS) began work with Kuwait Ministry of Defense and other
representatives on the development of National Security and
Defense Strategies.

B.6. (SBU) Foreign Military Sales (FMS).

a. (SBU) Foreign Military Sales. Payments received at
DFAS-Denver for U.S. CY 2004: USD 509,360,000. In CY 2004
the GOK focused on sustaining its four major FMS programs
(PATRIOT, ABRAMS M1A2, APACHE, and AEROSTAT).

b. (SBU) In 2004 Kuwait began construction on the Missile
Assembly and Disassembly Facility (MADF).

c. (SBU) On 29 March 2004, the GOK implemented a Letter of
Offer and Acceptance (LOA) valued at approximately USD 16
million for establishing a Joint Intelligence Center and
enhancing its electronic warfare capabilities.

d. (SBU) On 14 April 2004, the GOK implemented an LOA valued
at approximately USD 7.5 million for the purchase of 63
HMMWVs for its Communications Directorate (J6) to facilitate
communications within Kuwait,s Ministry of Defense (KMOD).

e. (SBU) On 2 June 2004, the GOK implemented an LOA valued at
approximately USD 20 million for the establishment of a
general support maintenance depot to sustain its Army's
wheeled and tactical vehicles.

f. (SBU) On 17 June 2004, the GOK implemented an LOA valued
at USD 40 million for the purchase of materials and support
services not covered by equipment support cases.

g. (SBU) On 27 August 2004, the GOK implemented an LOA valued
at approximately USD 1.5 million to repair and refurbish the
remainder of its HAWK missiles. The refurbishment was
related to Kuwait,s request, later approved by the USG, to
transfer its HAWK missiles to the Kingdom of Bahrain.

B.7. (SBU) U.S. Military Footprint. Kuwait has allowed U.S.
forces to use the following areas and facilities:

a. Camp Doha. The headquarters for the Combined Forces
Land Component Command (CFLCC) relocated from Camp Doha to
Camp Arifjan. However, Camp Doha remained an important
transitional facility for logistics, maintenance, and
rotating forces; Area Support Group-Kuwait (ASG-KU) remained
on site throughout 2004. The Kuwait Ministry of Defense
(KMOD) provides South Camp Doha for U.S. use at a cost of
approximately USD 25 million annually. North Camp Doha is
Kuwait Ports Authority (KPA) property and is provided to U.S.
forces by KMOD free of charge.

b. Camp Arifjan. Constructed with GOK funds at a cost of
over USD 140 million, the site is home to U.S. forces,
including CFLCC/ARCENT headquarters.

c. Kuwait Navy Base (KNB). KNB provides a secure location
for high-risk maritime download/uploads, such as ammunition.
During 2004, a total of 129 ships transited KNB. Due to
environmental concerns at Shuaiba Port, living areas
previously located at Shuaiba Port were re-located to KNB
beginning in 2004. U.S. forces received significant
portions of land at KNB to develop a Life Support Area (LSA)
for military port workers, U.S. coastal security forces, and
Naval special mission units, as well as new vehicle washracks
and deployment yards.

d. Shuaiba Port. This port provides access for deep-water
shipping and is used by CFLCC to download and upload
equipment and supplies for rotational forces. During 2004, a
total of 267 ships transited Shuaiba Port.

e. Ahmed Al-Jaber (AAJ) Air Base. AAJ Air Base, was used
extensively as a U.S. fighter base during OEF and OIF, now
provides warm-base capability for U.S. Air Force elements.
No active duty personnel remain at this location.

f. Ali Al-Salem (AAS) Air Base. AAS Air Base is a shared
base, including Kuwaiti, United States, and Japanese

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aircraft. AAS continues to serve as a major intra-theater
cargo hub for Coalition aircraft and hosts the 386th Air
Expeditionary Wing (AEW). The GOK allowed Korean aircraft to
base at AAS and join the Coalition air effort in 2004.

g. Abdullah Al-Mubarak (AAM) Air Base. The Strategic
Aerial Port of Debarkation/Embarkation (APOD/E) is located at
AAM Air Base, with all U.S. strategic/inter-theater air using
this location.

h. Camp Buehring / Udairi Range. Located adjacent to
Kuwait,s main live-fire range areas, CFLCC continues to
develop Camp Buehring as its primary, enduring camp for
rotating forces.

2005

B.8. (U) Kuwait Strategic Review (KSR). During 2005, an
OSD-led team continued work with Kuwait Ministry of Defense
and other representatives on the development of National
Security and Defense Strategies (NSDS). The joint effort
produced the first-ever NSDS and resulting National Military
Strategy for Kuwait. This review helped align future force
structure and organization with a shared U.S.- Kuwaiti threat
picture and is driving major equipment upgrade and purchase
decisions that continue into CY2006.

B.9. (SBU) Foreign Military Sales (FMS). Payments received
at DFAS-Denver for CY 2005: USD 355,731,232. As with CY2004,
the GOK focused on sustaining its four major FMS programs
(PATRIOT, ABRAMS M1A2, APACHE, and AEROSTAT). Kuwait is
considering new major programs and major program enhancements
for FY 2006. A new 10-year Special Budget is expected that
will continue a slow modernization and expansion of Kuwait
Armed Forces.

a. (U) In 2005, Kuwait,s major U.S. defense programs were
enhanced as follows:

i. (SBU) Patriot Missile: Kuwait signed two follow-on
support cases for Patriot, including modernization kits,
training, spare parts, test equipment, etc. valued at USD 175
million. Additionally, Kuwait signed three Letters of Offer
and Acceptance (LOA) for maintenance, spare parts, and
support of its F/A-18 fleet of aircraft valued at USD 201
million.

ii. (SBU) Kuwait Navy Ships: In 2005, Kuwait took steps
toward a major expansion their Navy. Kuwait MOD has seven
LOAs to purchase the following U.S. small boats and utility
craft: 12 Fast Patrol Boats; 15 Intrusion Boats; 15
Protection Boats; one Hydrographic Survey Vessels; one Diving
Support Vessel; one Landing Craft; two Tug Boats. Kuwait MoD
is considering the USG offers and we expect all LOAs to be
signed not later that 31 March 2006. Total value of pending
Navy LOAs is more than USD 400 million.

iii. (SBU) On 5 September 2005, Kuwait signed a FMS case for
the Office of Military Cooperation-Kuwait. Kuwait MOD funds
approximately 90% of the operations and support for OMC-K via
this FMS case, valued at USD 30 million over two years.

iv. (SBU) On 23 December 2005, GOK implemented an LOA
valued at USD 23 million to equip and arm a Special Forces
Battalion of its Commando Brigade; increasing the number of
battalions to three.

v. (SBU) On 27 December 2005, GOK implemented an LOA
valued at approximately USD 16.8 million to purchase
additional TOW-2A and TOW-2B missiles for its anti-tank
forces.

b. Potential FMS Cases:

i. (SBU) M1A2 Tank. Kuwait is considering a three-year
extension of the current maintenance and logistics support to
its M1A2 tanks, which would be valued at approximately USD 49
million. Additionally, Kuwait is considering refurbishing
its M1A2 fleet of main battle tanks. If this effort is
undertaken within Kuwait, it will cost approximately USD

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820.4 million. If the tanks need to be returned to the
United States for depot overhaul, the cost will exceed USD
1.4 billion.

ii. (SBU) Intelligence Systems. Kuwait is considering a
further extension of its intelligence capabilities, which
would cost approximately USD 35 million.

iii. (SBU) Counter-Terrorism Battalion. Kuwait is
considering arming and equipping an anti-terrorist battalion
at a value of approximately USD 30 million.

iv. (SBU) Kuwait is considering the purchase of surface
launched AMRAAM; the estimated program value is USD 333
million.

v. (SBU) Nuclear, Chemical, and Biological Reaction Force.
Kuwait is considering the purchase of equipment and training
for three Rapid Response Detachments for a Chemical, Nuclear
and Biological Reaction Force (WMD); estimated program value
is USD 100M.

vi. (SBU) Kuwait is considering buying two corvette-sized
warships. Approximate value of USD 400-500 million (200-250
million each).

vii. Kuwait has also asked for a new LOA for USAF Training
at a cost of about USD 16 million.

B.10. (SBU) U.S. Military Footprint. Kuwait has allowed U.S.
forces to use the following areas and facilities:

a. Camp Doha. CFLCC continued to transition facilities from
Camp Doha to Camp Arifjan and returned South Camp Doha to the
GOK by 31 December 2005. North Camp Doha remains active with
logistics functions continuing from the location.

b. Camp Arifjan. The site houses CFLCC headquarters,
logistics, and repair facilities in support of OEF / OIF.
Camp Arifjan will also house a heavy brigade set of
pre-positioned equipment, currently being reestablished after
use in Iraq.

c. Kuwait Navy Base (KNB). KNB provides a secure location
for high-risk maritime download/uploads, such as ammunition.
During 2005, a total of 367 ships transited KNB. KNB also
houses the Life Support Area (LSA) for military port workers,
US coastal security forces, and Naval special mission units.

d. Shuaiba Port. This port provides access for deep-water
shipping and is used by CFLCC to download and upload
equipment and supplies for rotational forces. During 2005, a
total of 164 ships transited Shuaiba Port.

e. Ahmed Al-Jaber (AAJ) Air Base. AAJ Air Base, used
extensively as a US fighter base during OEF and OIF, now
provides warm-base capability for U.S. Air Force elements.
No active duty personnel remain at this location.

f. Ali Al-Salem (AAS) Air Base. AAS Air Base is a shared
base, including Kuwaiti, United States and Japanese aircraft.
AAS continues to serve as a major intra-theater cargo hub
for Coalition aircraft and hosts the 386th Air Expeditionary
Wing (AEW). The GOK allowed Korean aircraft to base at AAS
and join the Coalition air effort in 2004.

g. Abdullah Al-Mubarak (AAM) Air Base. The Strategic Aerial
Port of Debarkation/Embarkation (APOD/E) is located at AAM
Air Base, with all U.S. strategic/inter-theater air using
this location.

h. Camp Buehring / Udairi Range. Located adjacent to
Kuwait,s main live-fire range areas, CFLCC continues to
develop Camp Buehring as its primary, enduring camp for
rotating forces.


C. BURDENSHARING (COST SHARING)

C.1. (U) CASH ASSISTANCE - The GOK receives no cash
assistance from the U.S.

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C.2. (SBU) IN-KIND CONTRIBUTIONS - The GOK provided USD 212
million per year for 2004 and 2005 burdensharing in-kind
contributions.

C.3. (SBU) DIRECT ASSISTANCE-IN-KIND 2004 (IN USD)

a. Rents for privately owned land - 8,535,360
b. Labor - 554,772
c. Utilities - 10,436,095
d. Facilities - Figures not available separate from paragraph
C2
e. Facilities improvement - Figures not available separate
from paragraph C2
f. Relocation Construction - n/a - no cost associated with
this category
g. Vicinity Improvements - n/a no cost associated with this
category
h. Miscellaneous - as follows:
i. Food - 21,511,822
ii. Water - 9,711,997
iii. Ice - 2,118,989
iv. Medical - 582,409
v. Telecom - 234,800
vi. Laundry - 6,474,620
vii. Fuel - (DCA) 16,601,211
viii.Vehicle Support - 544,944
ix. Liquid Gas Petroleum - 24,017

C.4. (SBU) DIRECT ASSISTANCE-IN-KIND 2005 (IN USD)

a. Rents for privately owned land - 8,535,360
b. Labor - 554,772
c. Utilities - 9,475,984
d. Facilities - Figures not available separate from paragraph
C2
e. Facilities improvement - Figures not available separate
from paragraph C2
f. Relocation Construction - n/a - no cost associated with
this category
g. Vicinity Improvements - GOK construction of military road
to border - 120,000,000
h. Miscellaneous - as follows:
i. Food - 16,366,652
ii. Water - 6,808,405
iii. Ice - 1,065,495
iv. Medical - 17,773
v. Telecom - 71,346
vi. Laundry - 963,489
vii. Fuel - (DCA) 14,747,697
viii.Vehicle Support - 677,529
ix. Liquid Gas Petroleum - 19,214

C.5. (SBU) INDIRECT ASSISTANCE-IN-KIND 2004 (IN USD)

a. Rents for government owned land - 1,220,000
b. Tax Concessions/Customs/Tolls/Duties - 43,700,000
(CUSTOMS/PORT FEES)
c. Miscellaneous - Free fuel priced at 2005 market prices:
i. Abdullah Al Mubarak Air Base - 17 million Kuwaiti
dinar (equivalent to USD 57,375,000)
ii. Ali Al Salem Airbase - 169.6 million Kuwaiti dinar
(equivalent to USD 572,062,500)
iii.Fuel pump at Shuaiba port - figures not available.
Pump used to fill convoy trucks uploading at port, en route
to Iraq

C.6. (SBU) INDIRECT ASSISTANCE-IN-KIND 2005 (IN USD)

a. Rents for government owned land - 1,220,000
b. Tax Concessions/Customs/Tolls/Duties - 43,534,000
(CUSTOMS/PORT FEES)
c. Miscellaneous - Free fuel priced at 2005 market prices:
i. Abdullah Al Mubarak Air Base - 14 million Kuwaiti
dinar (equivalent to USD 47,250,000) (Note: Al Mubarak fuel
was provided free-of-charge until September 30, 2005. End
note.)
ii. Ali Al Salem Airbase - 169.6 million Kuwaiti dinar
(equivalent to USD 572,062,000)
iii.Fuel pump at Shuaiba port - figures not available.

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Pump used to fill convoy trucks uploading at port, en route
to Iraq


D. (U) CONTINGENCY OPERATIONS: Kuwait fully supports
Operation Iraqi Freedom and Operation Enduring Freedom. See
para B.10 for further details.


E. (U) HUMANITARIAN RELIEF OPERATIONS:

a. Tsunami Relief Operations - 100 million pledged
b. Pakistan Earthquake Relief Operations - USD 100 million
pledged
c. Hurricane Katrina Response - USD 500 pledged
d. Iraq Assistance Program - 575 million in loans and grants
pledged


F. (U) KUWAIT'S GDP FOR 2004/2005

Kuwait's GDP figure for 2004 was estimated by the Economist
Intelligence Unit at USD 55.7 billion. Figures for 2005 have
not been finalized, due in part to the fluctuation in oil
prices, but are expected to be between USD 56 and USD 72
billion. The GOK does not release annual figures. Sources
used in this report are the Economist Intelligence Unit and
the Business Monitor International.

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