VZCZCXRO8675
OO RUEHBC RUEHDE RUEHIHL RUEHKUK
DE RUEHKU #2953/01 2041534
ZNY SSSSS ZZH
O 231534Z JUL 06
FM AMEMBASSY KUWAIT
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5900
RUEATRS/DEPT OF TREASURY WASHDC IMMEDIATE
RHEHNSC/NSC WASHDC IMMEDIATE
INFO RUCNRAQ/IRAQ COLLECTIVE IMMEDIATE
RHMFISS/HQ USCENTCOM MACDILL AFB FL IMMEDIATE

S E C R E T SECTION 01 OF 04 KUWAIT 002953 
 
SIPDIS 
 
NOFORN 
SIPDIS 
 
FOR NEA/ARP, NEA/I, AND C; LONDON FOR TSOU; PARIS FOR ZEYA 
 
E.O. 12958: DECL: 07/21/2016 
TAGS: PREL PGOV EAID KU KUWAIT IRAQ RELATIONS
SUBJECT: KIMMITT/ZELIKOW VISIT TO KUWAIT:  GOK LEADERSHIP 
SUPPORTS IRAQ COMPACT; BLAMES HIZBALLAH FOR LEBANON CRISIS 
 
REF: A. WHITE HOUSE 211527Z JUL 06 
     ¶B. KUWAIT 2898 
 
Classified By: CDA Matt Tueller for reasons 1.4(b) and (d) 
 
¶1.  (S/NF)  Summary:  Treasury Deputy Secretary Kimmitt and 
State Department Counselor Zelikow, during a July 22 visit, 
briefed Kuwaiti Amir Shaykh Sabah, Deputy PM and FM Shaykh 
Dr. Mohammed, Finance Minister Bader Al-Humaidhi, Fawzi 
Al-Hunaif of the Kuwait Fund, and Director General of the 
Arab Fund Abdul Latif Al-Hamad (septel) on the Iraq Compact 
and sought GOK support for Iraq's economic reform.  Kuwaiti 
officials welcomed the Compact commenting that clear 
guidelines and expectations would facilitate international 
support to Iraq and speed its economic recovery.  As the 
meeting closed, the Amir quietly added, "the money will not 
be a problem.  We are concerned about stability."  The Amir 
also spoke at length on the need for Iraqis to assume more 
responsibility for security and acknowledge their need for 
American help.  On Lebanon, GOK officials blamed Hizballah, 
with support from Iran and to a lesser extent Syria, for the 
current crisis and expressed hoped that the Secretary's visit 
to the region would lead to an immediate solution.  The Amir 
informed the delegation of Kuwaiti humanitarian assistance to 
the Lebanese people and called for opening more corridors for 
the speedy delivery of relief supplies.  FM Shaykh Dr. 
Mohammed, in a separate meeting, was less optimistic about 
immediate prospects for resolving the crisis.  End Summary. 
 
 
¶2.  (C/NF)  Deputy Secretary Kimmitt opened his hour-long 
July 22 meeting with Amir Shaykh Sabah Al-Ahmed Al-Jaber 
Al-Sabah by offering the President's greetings and informing 
the Amir how much the President looked forward to his 
September visit.  DepSec Kimmitt told the Amir he last 
visited Kuwait in 1991 following the Iraqi invasion and 
occupation and was pleased to see that since that time, peace 
and prosperity have reigned in Kuwait.  He regretted that 
other parts of the region were in crisis and welcomed 
Kuwait's interest in and commitment to reversing the 
situation.  He restated U.S. engagement in the region and 
advised the Amir that the Secretary, accompanied by Counselor 
Zelikow, would travel to the region on July 23 to address the 
Israeli-Lebanese conflict. 
 
Iraq Compact Key to Economic Reform and Stability 
--------------------------------------------- ---- 
 
¶3.  (S/NF)  Turning to a more immediate concern for Kuwait, 
DepSec Kimmitt stressed the importance of international 
support to help Iraq complete its transition to a stable, 
peaceful country.  Commenting on his recent visit to Baghdad, 
he explained that Iraqi Prime Minister Maliki was focusing on 
three initiatives to help turn Iraq around:  security, 
national reconciliation, and the Iraq Compact for economic 
reform.  Iraq will identify benchmarks for its economic 
performance and seek international support, under UN 
leadership, to help it meet its targets.  He said that Maliki 
would travel to the UK, the U.S., and the UN in the coming 
week to launch the Compact, and technical work had begun on 
the Compact with a goal to sign the final Compact in the 
fall.  DepSec Kimmitt expressed appreciation for GOK support 
for Iraq's reform, said the U.S. looked forward to working 
with Kuwait on this and other initiatives, and delivered a 
copy of a POTUS letter to that effect (ref A). 
 
GOK Welcomes Compact, Notes Previous Frustration on Aid 
--------------------------------------------- ---------- 
 
¶4.  (C/NF)  Shaykh Sabah responded that despite what the 
former Iraqi Government did to Kuwait, the GOK has always 
considered the Iraqi people victims and felt an obligation to 
"liberate" them.  He reviewed Kuwaiti assistance to Iraq, 
citing a $60 million grant for school and hospital 
assistance, and $500 million in reconstruction loans at an 
interest rate of 1.5 percent.  Complaining that the GOI has 
not yet spent any of the money, he asserted Iraq needed 
stability and security not more aid.  He further claimed 
militias were selling oil and said Iraq had adequate natural 
resources -- oil, gas, water, arable land -- but needed to 
better manage them. 
 
¶5.  (S/NF)  Following the meeting with the Amir, DepSec 
Kimmitt accompanied by Counselor Zelikow and CDA, had a 
thirty-minute side meeting with Foreign Minister Shaykh Dr. 
Mohammed Al-Sabah Al-Salem Al-Sabah.  Kimmitt briefed the FM 
 
KUWAIT 00002953  002 OF 004 
 
 
on the timeline for the Iraq Compact and on the work already 
done by the GOI and others to establish the commitments the 
Iraqis would make in order to receive international support. 
Kimmitt stressed the importance of having a strong 
demonstration of support from the Gulf Arab countries.  The 
FM said that this was exactly the way he had advised GOI DPM 
Barham Saleh to proceed and he was encouraged to hear that 
the Compact would constitute a binding agreement to force the 
GOI to make the tough decisions that needed to be made.  The 
GOK had grown frustrated at competing and conflicting 
requests for assistance from a parade of Iraqi ministers and 
individuals with unclear motives and agendas.  Committing the 
GOI to a reform program would be an important step forward. 
 
 
¶6.  (S/NF) DepSec Kimmitt thanked the Minister for Kuwait's 
willingness to send a representative to the cancelled Iraq 
Compact steering group meeting (the GOK had been prepared to 
send Ambassador-designate Gen (ret) Ali Mu'min and Dr. Nabil 
Jafer Abdul Rahim of the Kuwait Fund for Arab Economic 
Development).  He asked if the FM had any insights into Saudi 
reluctance to accept the Iraqi invitation.  Shaykh Dr. 
Mohammed said that Iraqi insistence on holding the meeting in 
Baghdad had not gone down well with the SAG.  He confessed he 
himself had doubts about the wisdom of the Baghdad venue and 
asked if it would not be better to hold the steering group 
meeting on the sidelines of UNGA, or in some other more 
accessible location.  DepSec Kimmitt said the Baghdad 
location was an Iraqi decision and that it sent a powerful 
signal of international confidence in the new government. 
Counselor Zelikow noted that the USG had been prepared to 
provide full transportation and security support to 
delegations in order to support the GOI desire to hold the 
meeting in Baghdad.  Shaykh Dr. Mohammed said that you would 
get a certain level of representation in Baghdad, but not 
necessarily senior-level. 
 
¶7. (C/NF) In an earlier meeting with Finance Minister Bader 
Al-Humaidhi and Kuwait Fund Director of Operations Fawzi 
Al-Hunaif, DepSec Kimmitt and Counselor Zelikow reviewed in 
greater detail the concept for the Iraq Compact, laid out a 
timeline for critical steps, and encouraged the active 
participation of the GOK as a member of the core group. 
DepSec Kimmitt expressed confidence in the Iraqi team led by 
DPM Saleh and said the Iraqis were "off to a strong start" on 
their macroeconomic fundamentals, establishing stand-by 
agreements with the IMF, building sufficient foreign 
reserves, establishing control of government finances, 
stabilizing the dinar, and beginning to address the problems 
of corruption and inflation. 
 
¶8. (C/NF) FinMin Al-Humaidhi's initial concerns were related 
to security.  He said that although the GOK had all the 
requisite technical expertise and financial resources to 
support development efforts, he did not see how it was 
possible to implement projects in Iraq given the present lack 
of security.  DepSec Kimmitt responded that within the 
International Zone, the security environment was difficult 
but acceptable and that the UN had successfully implemented a 
number of projects outside the IZ.  Like the FM, Al-Humaidhi 
complained that with each successive change of Government in 
Iraq, GOI priorities for reconstruction changed to reflect 
the particular sectarian or tribal interests of those in key 
posts and that the  GOK had yet to receive any official 
correspondence from the GOI on specific aid projects.  DepSec 
Kimmitt and Counselor Zelikow explained that the very purpose 
of creating the Compact was to establish a strategic list of 
priorities and detailed plans that the GOI would be compelled 
to adhere to by the international community.  DepSec Kimmitt 
also explained that the first order of business would be to 
create an effective and equitable structure for the oil 
sector to be embodied in an oil/gas law. 
 
No Movement on Debt but Supportive of Reconstruction 
--------------------------------------------- ------- 
 
¶9. (C/NF) When asked by DepSec Kimmitt if the GOK needed any 
assistance on the issue of Iraqi debt, the Finance Minister 
tersely responded that he had no need for further technical 
information or analysis.  He said all matters regarding Iraqi 
debt to Kuwait were well documented and available in the 
public domain.  When asked if he had any deeper political 
concerns, the Minister responded, "Unfortunately, things are 
moving very slowly in Iraq."  He said that Kuwait had a 
strong interest in a secure, stable, and economically viable 
Iraq, but reiterated his concerns over the dominance of 
 
KUWAIT 00002953  003 OF 004 
 
 
sectarian interests. The Minister emphasized that the GOK 
does not discriminate among sects in its approach to aid, 
citing Kuwaiti support to Shi'a communities following violent 
incidents in Kerbala and Najaf.  The FinMin concluded that 
Regional Institutions should also play a lead role in 
reconstruction, referring to the Arab Fund and the Inter-Arab 
Investment Guarantee Corporation, both resident in Kuwait. 
 
Amir on U.S. Military:  Pull Back, But Don't Pull Out 
--------------------------------------------- -------- 
 
¶10.  (S/NF)  The Amir also used his meeting with DepSec 
Kimmitt to propose giving the Iraqi Government more 
responsibility as one way of promoting stability.  In his 
view, the U.S. has made some mistakes over the past three 
years -- the Saddam Hussein trial in which his defense team 
has "polished and prepared him for a new role," and the 
dissolution of the army, for example -- and is now mistakenly 
viewed as an occupation force and part of the problem.  By 
backing off and allowing greater autonomy in the Baghdad 
area, as has been done in the north and the south, Iraqis 
would have to assume greater authority which would help to 
ferret out insurgent forces and quell Iraqi-on-Iraqi 
violence.  He stressed the importance of developing the Iraqi 
army and police forces and urged the U.S. to continue to play 
a consultative role. 
 
¶11.  (S/NF)  DepSec Kimmitt agreed that it was essential for 
Iraqis to assume a greater leadership role and advised the 
Amir that the military had responded well to training and was 
steadily playing an enhanced role on security issues.  Rear 
Admiral Moeller noted that training of Iraqi police forces 
also continued, but had been hampered by corruption, poor 
leadership, and a lack of accountability.  Under new 
leadership in the Ministry of Interior, progress was 
expected.  DepSec Kimmitt asserted that economic reform would 
help to improve the security situation and the Compact was 
part of this effort.  It was important for the Iraqi 
Government to establish reform priorities, to pay for what it 
could, and to make clear to the international community where 
it needed help.  Strict adherence to such a plan would help 
Iraq to progress using its abundant resources and the talent 
and energy of the Iraqi people.  Success would also attract 
private sector investment.  Responding to the Amir's 
suggestion that Iraqis should have to ask the U.S. to remain, 
so they would stop referring to U.S. troops as occupiers, 
DepSec Kimmitt and Counselor Zelikow said PM Maliki had made 
clear his desire for U.S. support.  In fact, PM Maliki and 
other Iraqi officials tended to be more worried that the U.S. 
would withdraw its forces too soon. 
 
Blame Hizballah and Iran, Not the Lebanese Government 
--------------------------------------------- -------- 
 
¶12.  (S/NF)  Turning to Lebanon, the Amir said he had told 
Energy Secretary Bodman and Commerce Secretary Gutierrez that 
Lebanon's only problem was Hassan Nasrallah (ref B), who bore 
responsibility for the recent destruction of Lebanon.  He 
accused Hizballah of only being concerned about Hizballah 
and, unlike Israel, would not seriously consider talks about 
releasing the kidnapped soldiers, amending the 
Lebanese-Israeli borders, or a European troop presence.  He 
asserted the GOL should not be blamed for what Hizballah has 
done with the support of Iran and Syria.  He expressed 
concern about Iran's role in Lebanon and said the future for 
Lebanon would be clearer after August 22 when Iran is 
expected to respond to the P5 1 incentive package.  DepSec 
Kimmitt agreed with the Amir's views on Iranian involvement 
saying Iran does not want stability and security and it was 
incumbent on the international community to counter the GOI. 
He told the Amir the overriding goals for Lebanon were to 
resolve the current crisis, rebuild Lebanon, and put it on a 
path toward stability.  The Amir seconded the need for an 
urgent solution to the crisis and hoped the Secretary's visit 
would be productive.  Restating Kuwaiti concern for the 
Lebanese people, he informed the delegation that Kuwait was 
prepared to assist the GOL with infrastructure reconstruction 
and had also donated $20 million in humanitarian assistance, 
although he was concerned about the existing humanitarian 
corridors.  He said Cyprus was too far away, causing delays 
in the provision of needed supplies, and recommended a 
corridor through Syria with the GOL checking supplies. 
Counselor Zelikow welcomed Kuwait's humanitarian support to 
Lebanon and advised the Amir that for security reasons, using 
Syria was problematic. 
 
 
KUWAIT 00002953  004 OF 004 
 
 
¶13.  (S/NF) In response to the FM,s question, during the 
side meeting Counselor Zelikow ran through expectations and 
agenda for the Rome meeting on Lebanon.  He summarized the 
outcome that most parties wanted to see as "saving Lebanon 
while defeating Hizballah."  Shaykh Dr. Mohammed said that 
the current crisis in Lebanon was expediting the inevitable 
-- a showdown between the legitimate government of Lebanon 
and Hizballah.  He said he was not optimistic about the 
outcome.  Lebanon was going to go through real turmoil. 
Hizballah was deeply entrenched with a constituency not 
limited to Shi,a in the south.  The Foreign Minister 
concluded with the observation that it was a daunting task 
for Lebanon to organize itself in the face of Hizballah and 
allow legitimate authority to emerge on top. 
 
Support Abu Mazen 
----------------- 
 
¶14.  (C/NF)  The Amir further noted his disappointment with 
developments in Palestinian areas.  He stated that Abu Mazen 
is ready to negotiate with Israel, but was prevented from 
doing so.  He urged the U.S. to support Abu Mazen, suggesting 
that a high-level visit could be a "confidence-booster." 
 
Meeting Participants 
-------------------- 
 
¶15.  (U)  U.S. Delegation: 
 
--  Robert Kimmitt, Deputy Secretary of Treasury 
--  Philip Zelikow, Counselor of the State Department 
--  Rear Admiral Robert Moeller, CENTCOM 
--  Evangelia Bouzis, NSC Director for Iraq 
--  J. Alexander Monsarrat, State Department 
--  Vickie Alvo, Department of Treasury 
--  CDA Matthew H. Tueller, Embassy Kuwait 
--  Natalie E. Brown, Embassy Kuwait (notetaker) 
--  Steve Conlon, Embassy Kuwait (notetaker) 
 
¶16.  (U)  While in Kuwait, the delegation, in three separate 
meetings, met: 
 
--  Kuwaiti Amir Shaykh Sabah Al-Ahmed Al-Jaber Al-Sabah 
--  Deputy Prime Minister and Foreign Minister Shakyh Dr. 
Mohammed Al-Sabah Al-Salem Al-Sabah 
--  Finance Minister Bader Al-Humaidhi 
--  Shaykh Nasser Sabah Al-Ahmed Al-Sabah, Minister of Amiri 
Diwan Affairs 
--  Fawzi Al-Hunaif, Director of Operations, Kuwait Fund for 
Arab Economic Development 
 
¶17.  (U) This cable was cleared by DepSec Kimmitt and 
Counselor Zelikow. 
 
********************************************* * 
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/ 
********************************************* * 
TUELLER