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

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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.

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Or Visit Embassy Kuwait's Classified Website:
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LEBARON