KUWAIT: WHERE WE ARE AND CHALLENGES AHEAD --

S E C R E T SECTION 01 OF 03 KUWAIT 001101 SIPDIS NOFORN SIPDIS E.O. 12958: DECL: 08/12/2014 TAGS: PREL ECON PGOV PTER KU SUBJECT: KUWAIT: WHERE WE ARE AND CHALLENGES AHEAD -- AMBASSADOR'S END OF TOUR REPORT Classified By: Ambassador Richard LeBaron for reasons 1.5 (b) and (d) ¶1. (C) This message summarizes my parting thoughts on key issue areas in the U.S./Kuwait relationship. It draws heavily on input provided by Matt Tueller, who recently concluded a distinguished tour as Deputy Chief of Mission and is en route to service at Embassy Baghdad. The report covers five areas: security, counter-terrorism, economic relations, democracy-building, and public diplomacy. Projecting Military Force -------------- ¶2. (S/NF) The ability to project a meaningful military ground deterrent presence into the Gulf region will remain the overriding interest in the U.S./Kuwait relationship. From our initial insertion of forces through Kuwait into Iraq for OIF until today, Kuwait remains the principal staging point for hundreds of thousands of U.S. military personnel and their associated equipment. The way in which we pursue our other interests should be viewed in the context of preserving Kuwait's unique willingness to host a very significant U.S. ground presence. The GOK will continue to support deployment of U.S. troops into Iraq, even as the form in which we do this evolves into the next decade. CENTCOM leadership and our Office of Military cooperation have done an outstanding job in managing our military relations with the Kuwaitis, through sustained dialogue at all levels, masterful management of troop and equipment flows, and an effective military sales and advisory program. We should be alert to three factors that could influence our ability to operate in and from Kuwait. -- First, we cannot depend on the memory of Kuwait's liberation by the United States to underpin the relationship indefinitely. Kuwaiti youth will form their own opinions about the role of the United States in their country and we will need to push back against the image of the U.S. as an enemy of Islam. This is one of the reasons this Embassy has pushed so hard for expansion of public diplomacy programs. -- Second, the Al-Sabah family, although almost universally accepted as rulers by Kuwaitis, does not have a cadre of strong leaders and the family is divided. The next succession could come anytime and be even messier than the 2006 transfer. While we don't see any faction within the family that would break with the strong U.S. linkage, weak leadership could provide opportunities for increased influence by outside extremists and extremist elements within Kuwaiti society. -- Third, given Kuwait's strong association with OIF, U.S. withdrawal from an unstable Iraq would have significant consequences and test Kuwait's ability to sustain the strategic relationship with us. In this context, we cannot take for granted the currently-popular notion that Kuwait could be employed automatically as a base from which to launch operations into Iraq as needed over an indefinite period. As we plan for transitions in our long-term force presence, periodic visits by the Secretary of Defense and other senior officials will be necessary to complement the robust engagement by CENTCOM leadership. Our Defense Cooperation Agreement has served U.S. interests very well and we should work to preserve it. ¶2. (C/NF) The dialogue about Iran that we have started with Kuwait and others in the Gulf is critical to our future ability to act to stem Iran's regional and international ambitions. The GCC plus Two mechanism and the Gulf Security Dialogue, as well as exchanges in intelligence channels, should continue on a regular basis. Although it considers Iranian bullying its greatest external threat, Kuwait's leadership has indicated publicly that bases in Kuwait may not be used for military actions against Iran, and there is a great interest in seeing actions against Iran remain in the context of UNSC Chapter Seven resolutions. In my farewell call with the Amir, he urged continued U.S. engagement with Iran in order to address security issues in Iraq. Countering Terrorism and Extremism -------------- ¶3. (C/NF) The capable terrorists in the region have not acted against Kuwait, even though the Kuwaiti leadership is seen as the principal ally of the U.S. in the Gulf and, after the Al-Saud, Al-Qaeda holds the Al-Sabah family in the greatest contempt. We have no reason to believe Kuwait's KUWAIT 00001101 002 OF 003 luck will hold indefinitely. Our C/T coordination with Kuwait is characterized by willingness to exchange information and act against external targets but inconsistent efforts to effectively sanction Kuwaiti terror facilitators. The Al-Sabah family is not a target of Kuwaiti terror facilitators and financiers, who focus their efforts on supporting jihad in Afghanistan and Iraq. So far we have not seen an outflow of terrorists from Iraq to Kuwait, but much of our planning with Kuwait assumes this will occur at some point. In the last few months, the Kuwaitis have welcomed USG assitance with assessing and improving protection of their oil infrastructure. ¶4. (C/NF) Kuwaiti financial institutions have strong money laundering and terror finance controls, and Kuwait has been a big player in the MENA-FATF. The banks are aware that their ability to operate internationally could be severely damaged by leakage. Our dialogue about support for extremism abroad by Kuwaiti-based Islamic charities has been only partially productive. Knowledge of the existence of the dialogue has made the charities more careful, but the GOK has not, for internal political reasons, significantly enhanced its monitoring of these bodies. In our approach, we risk the perception that we are objecting to these charities's activities because they are Islamic, and we will need to make sure our evidence of wrongdoing is convincing and that countries where Kuwaiti religious charities are involved in improper activities take actions of their own. Moreover we suspect that most funding for foreign fighters is flowing as simple movements of cash across borders, requiring preventive actions based largely on intelligence gathering and sharing. Economic Relations -------------- ¶5. (C/NF) There is zero chance over the next year that Kuwait will make the economic reforms necessary in order to reach a Free Trade Agreement with the U.S., regardless of the status of USTR's negotiating authority. Kuwait's economy is growing at well over five percent annually, with no compelling impetus for reforms. The benefits from any eventual free trade agreement will come in the form of structural changes in the Kuwaiti economy, but not result in significantly higher trade flows. While continuing to advocate strongly for U.S. commercial interests, as a government we should focus much more on the investment part of the picture than on free trade. Recent modest USG efforts to encourage investment flows from the Gulf do not nearly match the negative impacts of pending NOPEC legislation and the general perception since the Dubai Ports debacle that the U.S. doesn't welcome Middle Eastern investment. These sorts of positive discouragements of external investment only add to the current Kuwaiti interest in seeking investment opportunities in India and China. We should also not underestimate the negative impact on our economic relations of the fear felt by business people of seemingly arbitrary treatment by officials at U.S. ports of entry. The Freedom Agenda -------------- ¶6. (C/NF) Although many Kuwaitis are currently fretting about the less than inspiring performance of their parliament, the trends toward wide political participation are strong, and the objectives of our Freedom Agenda for Kuwait have largely been met -- voting rights for women, reduction of the number of electoral districts, support for press freedom. The Al-Sabah family's internal problem continues to be how much power to cede while still maintaining itself in power. Most Kuwaitis want to preserve a significant role for the Al-Sabah. There is no credible call for fundamental change to the constitutional apportionment of power. The fact that there is a written constitution, that actually means something when it comes to how the country is ruled, and that it is a popular document is unique for this region and frankly astonishing. ¶7. (C/NF) Our approach to helping the Kuwaitis with democracy-building -- through MEPI, exchanges, and engagement on the ground -- has been guided by partnering with local organizations and quiet sustained dialogue with a wide range of political groups. While there is an occasional bleat from extremists about interference in domestic affairs, our role as an interested friend is widely accepted and welcomed. As in other predominately Muslim states, we need to continue to refine our thinking about how to deal most effectively with Islamist parties and organizations. In Kuwait, the Muslim KUWAIT 00001101 003 OF 003 Brothers and even many Salafis have, at least for now, bought into the democratic system and are active participants in it. Public Diplomacy -------------- ¶8. (SBU) We have seen a significant increase in our outreach and exchange programs in recent years through the ACCESS, YES, and a wide variety of new MEPI and International Exchange programs. These programs not only influence attitudes about the United States, they are life-changing experiences for participants. However, compared with the resources available for military and counter-terrorism programs, the resources for public diplomacy and personnel to manage them remain ridiculously small. As noted earlier in this report, people-to-people exchanges have a significant impact on our long-term security interests -- public diplomacy needs to be supported in this strategic context. ¶9. (SBU) Through a mission-wide effort we have turned around the post-9/11 drop in Kuwaitis studying in U.S. colleges and universities, but it has been slow going with lots of competition. The priority treatment and outreach to students by our consular personnel has been critical -- and recognized and appreciated by the Kuwaiti public and leadership. We also have an effective partnership with AMIDEAST for counseling and testing services. In coming years, we need to focus on stronger promotion of short-term specialized undergraduate and graduate studies in the U.S. We also need to encourage a much bigger flow of students and professionals from the United States to participate in exchange and cultural programs in Kuwait. ********************************************* * For more reporting from Embassy Kuwait, visit: http://www.state.sgov.gov/p/nea/kuwait/?cable s Visit Kuwait's Classified Website: http://www.state.sgov.gov/p/nea/kuwait/ ********************************************* * LeBaron