ENGAGEMENT OF REGIONAL STATES FOR IRAQ: WHAT CAN

S E C R E T SECTION 01 OF 02 KUWAIT 004405 SIPDIS SIPDIS E.O. 12958: DECL: 11/05/2016 TAGS: PREL IZ XF MOPS MAPP SUBJECT: ENGAGEMENT OF REGIONAL STATES FOR IRAQ: WHAT CAN KUWAIT DO? REF: STATE 181228 Classified By: Ambassador Richard LeBaron for reasons 1.4 (b) and (d) ¶1. (S/NF) This cable responds to reftel request for ideas on Iraq-Kuwait engagement. Kuwait's relationship with Iraq continues to be colored by their difficult shared history. While Kuwaitis are elated to see Saddam condemned by an Iraqi court, and recognize the danger of a failed state on their northern border, few are comfortable with the idea of a resurgent Iraq re-emerging as a regional power. They distrust the intentions of the Iraqi Shia and Sunni political leadership alike. Kuwaitis, in short, fear the prospect of either success or failure in Iraq, and this ambivalence is reflected in the fitful starts and stops of their Iraq engagement. ¶2. (S/NF) These attitudes are particularly prevalant among the Kuwaiti public, and the Kuwait National Assembly, which has made clear its distaste for the idea of Iraqi debt relief. Kuwaiti leaders, while sharing the mixed emotions of many Kuwaitis, take a more pragmatic approach. Appealing to that pragmatism, and moving ahead in a steady, low-key way that allows the GOK to control the public debate, is the key to strengthening Iraq-Kuwait engagement. Pushing Further Engagement -------------- ¶3. (S/NF) There are a number of areas in which Kuwait would be ready to move given the right approach: -- Diplomatic relations: Kuwait has signaled clearly that they are ready to name an Ambassador as soon as Iraq is ready to reciprocate. The Kuwaiti FM told a recent Iraqi visitor that he would be ready to travel to Baghdad as well at that point. USG action: Encourage the Iraqis to name an Ambassador -- High-level visits: Kuwait recently hosted the Iraq Compact Preparatory Meetings, including the Iraqi Deputy PM and a number of Iraqi ministers and business people. The Amir met with the delegation. Further Iraq ministerial and other senior-level bilateral visits would be effective in helping to dispel Kuwaiti fears that Iraqi attitudes toward Kuwait are unchanged. USG action: Encourage and facilitate GOI travel to Kuwait. -- Economic support: Kuwait has pledged more than USD 500 million in economic support but is concerned that Iraq has not and is unable to disburse the money effectively. Closer Iraqi cooperation with the Kuwait Fund, renewed during the October 31 compact meeting here, will help. In addition, the Arab Fund is working with the GOI to re-instate Iraq's suspended membership in the Fund, contingent on Iraq resuming arrears payments on membership contributions. The GOI should move robustly to resume repayments as discussed in late October meetings, which the Fund indicated could free up funding for projects in southern Iraq. USG action: Facilitate expert-level interaction between the Kuwait Fund and GOI economic officials, and encourage Arab Fund visits to Iraq. -- Debt relief: a sensitive issue in Kuwait, debt relief is best addressed quietly with the GOK to allow them to create a politically palatable formula. The GOK's committment to the Paris Club guidelines continues to be firm, but conditions for parlimentary approval are not there. USG action: Continue to address with GOK in diplomatic communications, while avoiding public statements. -- Investment: Kuwait and the GCC in general have done little to match the efforts of Iraq's other neighbors as investors in the Iraqi economy. Security concerns are a big part of that, but other factors come into play as well. The Kuwaiti private sector could do more to work with local partners in Iraq to develop the Iraqi economy, and provide a non-Iranian source of private capital to entrepreneurs. USG action: Work with the GOK and Kuwaiti private sector to encourage increased Kuwaiti investment in Iraq, and encourage Kuwaiti financial institutions to include appropriate Iraqi KUWAIT 00004405 002 OF 002 counterparts at financial sector events hosted in Kuwait. -- Security cooperation: Security cooperation with Iraq is a particularly sensitive area for Kuwaitis, but there is room for substantial additional cooperation on practical issues related to customs and border security in the south. Kuwait may be willing to provide substantial security assistance in these discrete areas to the extent it is tied into securing Kuwait's own borders. Joint working groups on customs and borders could be an appropriate vehicle, given that there is almost no contact between border officials at present. The recent protocol signed by Iraq and its neighbors in Jeddah envisions such cooperation. USG action: Discuss with Kuwaitis possible security cooperation with Iraq on customs and borders issues. Could be included on the Gulf Security Dialogue agenda. We should also urge GOI officials to take opportunities to repudiate claims to Kuwaiti territory and affirm respect for the UN demarcated border. -- Parliament to Parliament exchanges: Kuwaiti MPs have expressed interest in suggestions for exchanges with Iraqi parliamentarians. Such exchanges could help dispel misconceptions among Kuwaiti MPs about Iraqi intentions, and have other positive effects. USG action: Determine if USG can facilitate the visit of a delegation from the Iraqi CoR. Kuwaiti Views on Regional Issues -------------- ¶4. (S/NF) Kuwait has little influence on Syria or Syrian behavior toward Iraq. Kuwait generally shares USG views on Syria's negative role in the insurgency and terrorism in the region more generally. ¶5. (S/NF) Kuwait is extremely concerned about negative Iranian influence in Iraq, and believes Iran seeks, or possibly already has, a dominant position there via control of Shia militias and political parties. Kuwait would welcome a diminution in Iranian influence, and a return to a situation where Iraq plays a balancing role vis a vis Iran. However, Kuwait also fears Iran's ability to cause trouble, including among Kuwait's large Shia population, and will continue to approach its relationship toward Iran with great caution. Kuwait will continue to work with us quietly on security issues, but is highly unlikely at present to take a lead role in any attempt to publicly push back on Iranian behavior. LeBaron