MP AHMED BAQER ON PENDING LEGISLATION, TERRORISM

C O N F I D E N T I A L SECTION 01 OF 02 KUWAIT 004623 SIPDIS SIPDIS DEPT FOR NEA/ARP, EB, S/CT E.O. 12958: DECL: 12/11/2011 TAGS: PGOV PREL ETRD EFIN BEXP IZ LE KU SUBJECT: MP AHMED BAQER ON PENDING LEGISLATION, TERRORISM DESIGNATIONS, AND IRAN REF: A. STATE 192459 ¶B. KUWAIT 4609 ¶C. KUWAIT 4612 Classified By: Ambassador Richard LeBaron for reasons 1.4 (b) & (d). ¶1. (C) Summary. On December 11, Ambassador met with Chairman of the Parliament's Financial and Economic Affairs Committee and Coordinator of the Islamist Bloc Ahmed Baqer. Topics included pending Kuwaiti legislation, recent Treasury Department designations of Kuwaiti nationals for supporting terrorism, and U.S. policy towards Iran. Baqer said the Finance Committee has finished its review of the draft tax law and has scheduled it for discussion in the Parliament. The proposal for the GOK to write off private debt of Kuwaiti citizens has "no chance" of passage, he said, but there are other proposals for cash grants and a debt-relief fund that "may pass." Baqer said a committee at Kuwait University had shown him a draft law to establish a Capital Markets Authority. He argued that a new, detailed law covering Build-Operate-Transfer (BOT) projects is needed, saying recently canceled BOT projects were perceived to be benefiting private interests, some of whom did not deliver on their commitments under the BOTs. ¶2. (C) Summary cont'd: Regarding recent Treasury designations, the Ambassador stated that the U.S. will continue to pursue those who support or advocate terrorism, including Kuwaiti individuals, and charities that do not adequately monitor the usage of funds sent abroad. Baqer said many Kuwaitis are concerned there is a perceived shift underway in U.S. policy toward Iran and the Shia throughout the region. Iran, he said, has clearly benefited from the turmoil in Iraq and Lebanon, and Baqer expressed concern that any prospect of direct talks between the U.S. and Iran portends better relations and a solidification of Iran's strength at the expense of Sunnis. The Ambassador assured Baqer there is no U.S. plan to align with Iran against the Sunnis, and cautioned against reading too much into outside suggestions for U.S. policy shifts. End Summary. Tax Law Moving Forward -------------- ¶3. (C) On December 11, Ambassador met with Salafi (Islamist) MP and coordinator of the Islamist Bloc Ahmed Baqer, also Chair of the Parliament's Finance Committee. Baqer said the draft tax law, which his committee finished reviewing two months ago, is scheduled for discussion in the Parliament soon. The law, he said, has a "good chance" of passage, and Baqer argued that the GOK should do more to support the law, including asking for a specific discussion date and having Ministers attend. Turning to the privatization law, Baqer said "no one in Parliament has the courage to discuss it because of the perception it will impact Kuwaiti jobs." No to Forgiving Consumer Debt -------------- ¶4. (C) A hotly debated proposal for the GOK to use part of its current budget surplus to pay off the consumer debt of Kuwaiti citizens (note: parliamentary contacts indicate that writing off the debt would cost about USD 16 billion) has "no chance at all" of passing, Baqer said. Baqer added, however, that the Islamic Constitutional Movement (ICM) has submitted two proposed changes to the proposal - one that would provide a grant of 1,000 Kuwaiti Dinars ($3,500 USD) to each Kuwaiti citizen, and another that would establish a 200 million Kuwaiti Dinars ($700 million USD) fund to "help people who can't pay their debts." Baqer said he did not support paying off private debt, but the ICM's proposals, he said, are "more dangerous because they may pass." Markets and BOTs -------------- ¶5. (C) The Ambassador said recent stock market volatility highlighted the need for an effective Capital Markets Authority (CMA),noting that foreign investors are not comfortable with the oversight of the Kuwait Stock Exchange (KSE). Baqer agreed, and said a committee of scholars at Kuwait University is working on a draft law that includes more than 100 articles, but predicted it "would need a long time to pass." Referring to the GOK's recent decision to cancel several Build-Operate-Transfer (BOT) projects, Baqer said there is a feeling in Kuwait that BOT projects have been manipulated by those who received them. BOT projects are developed on government land, which is expensive, and he said KUWAIT 00004623 002 OF 002 a new, detailed law dealing with BOTs is needed. Tilt Toward Iran? -------------- ¶6. (C) Baqer said there are rumors in Kuwait of a pending strategic change in U.S. policy, specifically a tilt towards Iran and the Shia throughout the region. He said the positive image of the U.S. in Kuwait is suffering from the perception that "America handed Iraq to Iran," and that "Lebanon is converting to Shia policy." He asked if discussion of possible direct talks between the U.S. and Iran is a prelude to better relations and the solidification of Iran's position at the expense of Sunnis. The Ambassador responded that there is no shift in U.S. policy towards Iran, and that the U.S. is focused on the Iran nuclear issue as well as Iran's involvement in Iraq. The Ambassador assured Baqer there is no plan for the U.S. to align with Iran at the expense of the Sunnis. The Ambassador noted, however, the need for a strong GCC response to Iran's nuclear ambitions. Terrorist Designations -------------- ¶7. (C) Partly in response to Baqer's presentation about Shia misdeeds in the region, the Ambassador noted the Treasury Department's December 7 designation of (Sunni) Kuwaiti citizens for support to Al Qaida (Ref A). Baqer explained efforts by his (Salafi) group to root out supporters of terror, and said there is a difference between peaceful fundamentalists and "those who cross the line." Some Kuwaitis, he said, talk about supporting terrorism but do not actually take steps to do so. The Ambassador responded that advocating terrorism constitutes support, and that the U.S. will continue to pursue terrorist supporters. The Ambassador also took the occasion to note that the USG's primary concern with some Kuwaiti charities is not the way they collect funds in Kuwait, but the lack of control and oversight over how funds are used in other countries. ******************************************** For more Embassy Kuwait reporting, see: http://www.state.sgov.gov/p/nea/kuwait/cables Or Visit Embassy Kuwait's Classified Website: http://www.state.sgov.gov/p/nea/kuwait/ ******************************************** LEBARON