DAS BUTLER ADVOCATES GREATER KUWAITI ENGAGEMENT

C O N F I D E N T I A L SECTION 01 OF 02 KUWAIT 000207 SIPDIS SIPDIS DEPT FOR NEA/ARP AND NEA/I E.O. 12958: DECL: 02/17/2018 TAGS: PREL PBTS ECON ETRD PTER KU IZ SUBJECT: DAS BUTLER ADVOCATES GREATER KUWAITI ENGAGEMENT WITH IRAQ REF: A. KUWAIT 0177 ¶B. KUWAIT 0112 Classified By: CDA Misenheimer for reasons 1.4(b) and (d) ¶1. (C) Summary: On February 18, NEA/I DAS Butler met with Under Secretaries in the GOK Ministry of Commerce and Industry (MOCI) and the MFA to advocate for greater Kuwaiti engagement with Iraq. Butler called for the GOK to send an Ambassador to Baghdad immediately, open an additional border crossing near Camp Bucca, participate in and finance salvage operations in the Khor Abdullah waterway, encourage private sector investment in Iraq, and discuss with the GOI disbursement of Kuwait's generous, but largely unspent, pledge of reconstruction assistance. MOCI U/S Rasheed Al-Tabtabaei cited security concerns in Iraq as a deterrent to Kuwaiti investment. MFA U/S Khaled Al-Jarallah said the GOK is waiting for Iraq to designate an Ambassador to Kuwait, but is ready to cooperate in Khor Abdullah operations and participate in a U.S.-sponsored visit to the border. Al-Jarallah also said the GOK opposes a reduction in Iraqi UN Compensation Commission (UNCC) payments to Kuwait and cautioned that Parliament will not approve Iraqi debt forgiveness at this time. End Summary. MOCI U/S on Trade with Iraq -------------- ¶2. (C) In a February 18 office call on MOCI U/S Rasheed Al-Tabtabaei, NEA/I DAS Lawrence Butler commented on Iraq's improved security environment and called on the GOK to encourage greater private sector investment there. U/S Al-Tabtabaei noted Kuwait's historical commercial ties with Iraq, especially Basra, and spoke of his vision for a new "Marshall Plan." He noted the need for more education, job creation and infrastructure development to lift the Iraqi people from their "miserable" state and encourage foreign investment. While he said that Kuwaitis "know their responsibility to Iraq," he cited mistrust of Iraq (stemming from the 1990 invasion) and the current security environment as psychological deterrents to increased Kuwaiti investment and engagement. ¶3. (C) DAS Butler noted that "trade follows the flag" and said the GOK should open an Embassy in Baghdad immediately to signal to Kuwait's private sector that "the door is open." Butler commented that Kuwait has the resources and knowledge to steer the growth of Iraq's economy to its advantage and noted that the only major foreign country economically involved in Iraq right now is Iran. Al-Tabtabaei said the Kuwaiti private sector would engage "sooner or later" and that it was looking forward to the return of Iraqi businessmen from abroad as a sign of Iraq's readiness for foreign investment. MFA U/S on Kuwaiti AMB, the Border, Assistance to Iraq, and Compensation/Debt -------------- ¶4. (C) On the same day, DAS Butler called on MFA U/S Khaled Al-Jarallah to encourage the GOK to send an Ambassador to Baghdad, to press for a new border crossing in the vicinity of Camp Bucca, and to encourage GOK involvement in salvage operations in the Khor Abdullah waterway. Al-Jarallah began by recognizing Iraq's improved security situation, particularly in Anbar Province, and said he was encouraged by the Awakening Councils' struggle against Al-Qaeda. Concerning the GOK Ambassador, the U/S noted that Iraq had not yet designated an Ambassador to Kuwait. He said when this happens, Kuwait will send its Ambassador to Baghdad "immediately." Al-Jarallah also acknowledged receipt of CDA's letter, with attached photos, concerning proposed Embassy sites in the Green Zone (ref A). ¶5. (C) Al-Jarallah did not comment on the proposed border crossing near Camp Bucca, but said he would participate in a U.S.-sponsored visit to the border within the first 10 days of March. On a related topic, Al-Jarallah raised the issue of Iraqi homes and farms that encroach on Kuwaiti territory between border markers 87-89, and said the GOK was waiting for the GOI to relocate their inhabitants to Iraq, reiterating that Kuwait would compensate the GOI for their relocation. ¶6. (C) The U/S said the GOK would observe and participate in salvage operations in the Khor Abdullah waterway and commented that the GOK had no problem financing these operations. He noted that the GOK leadership gave KUWAIT 00000207 002 OF 002 instructions to the MOI and MOD to move forward on this "essential issue." He also said Iraq had signaled its willingness to begin discussions concerning final demarcation of the maritime border in the waterway. He said the GOK was prepared to discuss this and many other issues concerning the future of Iraq and the region during the April Iraq Neighbors Ministerial Conference in Kuwait. A/DCM encouraged Al-Jarallah to work with the GOI on disbursement of the USD 575 million Kuwait has allocated for Iraq reconstruction. The U/S noted that the GOK is awaiting project proposals from the GOI, which will then trigger the release of these funds. ¶7. (C) Al-Jarallah noted Iraq's push to reduce its UNCC obligation to Kuwait from five percent of its oil revenue to one percent. He said, however, that Kuwait will have outstanding environmental remediation contracts until 2010, during which time the UNCC contribution must remain at five percent. On the subject of Iraqi debt forgiveness, Al-Jarallah said Kuwait's Parliament would not/not consider this issue, especially in light of the GOK's opposition to efforts by some MPs to forgive all private Kuwaiti debt. He said the time was not right to raise this issue. ********************************************* * 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/ ********************************************* * MISENHEIMER