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Viewing cable 02KUWAIT5417, C) KUWAITI INTERESTS IN IRAQ

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Reference ID Created Released Classification Origin
02KUWAIT5417 2002-12-17 08:33 2011-08-30 01:44 CONFIDENTIAL Embassy Kuwait
This record is a partial extract of the original cable. The full text of the original cable is not available.
C O N F I D E N T I A L SECTION 01 OF 02 KUWAIT 005417 
 
SIPDIS 
 
FOR NEA/FO, NEA/NGA, NEA/ARP 
 
E.O. 12958: DECL: 12/14/2012 
TAGS: PREL ETRD EINV KU IZ
SUBJECT: (C) KUWAITI INTERESTS IN IRAQ 
 
REF: A. A) RIYADH 8176 
     B. B) KUWAIT 3081 
 
Classified By: (U) AMBASSADOR RICHARD H. JONES; REASON 1.5 (B, D) 
 
1.  (C) SUMMARY:  The GOK, increasingly confident that the US 
is determined to eliminate Saddam Hussein's regime, is more 
and more willing to let its public support show, even as it 
maintains its formal commitment to Arab League and GCC 
opposition to any pre-emptive strike on Iraq.  Prominent 
Kuwaiti merchant families see vast potential for investment 
and trade with a post-Saddam Iraq; given the unfavorable 
investment climate at home, they have a lot of liquidity to 
draw on.  Some still have family ties to southern Iraq and 
have been quietly sending financial aid to their kin via 
Jordan.  END SUMMARY. 
 
2.  (C) LETTING IT SHOW:  The GOK, increasingly confident 
that the US is determined to eliminate Saddam Hussein's 
regime, is more and more willing to let its support show 
publicly, even as it maintains its formal commitment to Arab 
League and GCC opposition to any strike on Iraq.  In recent 
weeks, the GOK openly hosted two prominent Iraqi opposition 
figures:  first Mohammed Baqer al-Hakim, head of the Shiite 
Supreme Council for the Islamic Revolution in Iraq (SCIRI), 
then Jalal Talabani, head of the Kurdish Patriotic Union of 
Kurdistan (PUK).  Both held meetings with senior 
ruling-family members including the First Deputy Prime 
Minister and Foreign Minister, Shaykh Sabah al-Ahmed al-Jaber 
al-Sabah, who is de facto ruler given the debility of the 
Amir and Crown Prince/Prime Minister.  The GOK also announced 
plans to send observers to the Iraqi opposition conference in 
London this week.  (Question for Embassy London:  were GOK 
reps evident?)  This trend was accelerated by Saddam's 
December 7 address to "the people in Kuwait," which sparked 
widespread outrage here (septel).  Supposedly an apology, it 
was in fact filled with insults, threats and incitement to 
violence. 
 
3.  (C) THE VISION THING:  Kuwait, following the Saudi line 
(ref A), will want post-Saddam Iraq to remain a unified 
country under Arab leadership, preferably Sunni -- although 
the GOK is less dogmatic on that point than the SAG.  We 
assess that Kuwait will want to be seen as contributing 
substantively to the reconstruction of Iraq, if only to 
deflect blame for the years of suffering its neighbor has 
endured.  The GOK already knows it will face intense pressure 
to forgive much of Iraq's debt, particularly the UN-endorsed 
compensation for Iraq's depredations during the 1990-91 
occupation; it will try to avoid opening itself to charges of 
seeking to keep the Iraqi people down after the Baath regime 
is gone. 
 
4.  (C) Some Kuwaitis worry that their country's value to the 
US will decline precipitously after regime-change in Iraq, 
especially if the USG devotes a huge investment to developing 
a 'new Iraq' as a model for the region.  This, however, does 
not begin to rival their desire for an end to the existential 
menace of Saddam -- more than anything else, the Kuwaitis 
want us to succeed quickly, with minimal loss of civilian 
lives and property.  Kuwaitis are probably less worried than 
most Arabs about facing US-inspired pressure for 
democratization, given their established tradition of a 
rambunctious democratically-elected parliament.  They also 
understand the point that a true democracy is built on strong 
institutions that protect minority rights through the rule of 
law. 
 
TRADE AND INVESTMENT 
-------------------- 
5.  (C) Conversations with Kuwaiti business leaders reveal 
palpable anticipation of trade and investment opportunities 
in a post-Saddam Iraq.  Kuwaiti merchants and 
service-providers are well placed to export supplies and 
equipment to Iraq, because of Kuwait's proximity to Basra, 
its developed infrastructure, and the family ties that still 
bind some entrepreneurs to southern Iraq despite the strains 
brought on by the Iraqi occupation and the subsequent 
sanctions:  some merchant families have quietly been sending 
financial aid to their kin in Iraq via Jordan.  Some 
entertain hopes of successfully asserting title to family 
property in southern Iraq.  At one time, our sources tell us, 
Kuwaitis owned some 38 million date-palms around Basra.  They 
all were lost during the Iran-Iraq war but Kuwaitis know the 
land could bear fruit again some day. 
 
6.  (C)  Kuwaiti investors have a great deal of liquidity 
resulting from higher-than-budgeted oil prices, UN 
Compensation Commission payments, and an unfavorable 
investment climate at home (ref B) and depressed equity 
markets worldwide.  An Iraq freed of the Baath regime looks 
attractive to them due to its wealth of natural resources 
(oil, water, fertile land), its educated workforce, and its 
familiarity based on proximity and the two countries' shared 
Arab and Muslim heritage.  One entrepreneur envisages 
building a new port near the border to handle some of the 
anticipated trade, given the crumbling state of many existing 
Iraqi facilities. Another expects to make a significant 
fortune selling paint and milk across the border.  We hear 
vague but credible reports of retailers stocking up on food 
and other consumer items, ready to supply Iraq with products 
it wants and needs. 
 
7.  (C) COMMENT:  The Kuwaitis are depending on us to prevail 
against Saddam, and to protect them in the process.  The more 
we look like winners and liberators, the more secure their 
own position becomes.  The Kuwaitis' worst nightmare is a US 
climb-down that would leave Saddam in power.  Next worst 
would be a protracted, bloody conflict that inflamed the 
passions of the wider Arab and Muslim worlds, even if we 
ultimately prevailed. 
JONES