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06KUWAIT4405 2006-11-07 14:22:00 SECRET Embassy Kuwait
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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

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

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