VZCZCXYZ0017
PP RUEHWEB

DE RUEHKU #0150/01 0530718
ZNR UUUUU ZZH
P 220718Z FEB 10
FM AMEMBASSY KUWAIT
TO RUEHC/SECSTATE WASHDC PRIORITY 4637
INFO RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RHEBAAA/DEPT OF ENERGY WASHDC PRIORITY

UNCLAS KUWAIT 000150 
 
SENSITIVE 
SIPDIS 
 
STATE FOR NEA/ARP, EEB/CBA 
COMMERCE FOR ADVOCACY CENTER AND ITA - REICHELT 
 
E.O. 12958: N/A 
TAGS: ETRD EINV ENRG ECON EPET KU
SUBJECT: KUWAITI CHAMBER OF COMMERCE CHAIRMAN ON 
OPPORTUNITIES FOR U.S. BUSINESSES 
 
 ¶1. (SBU) In the context of the Kuwaiti parliamentary passage 
of a four year $104 billion development plan (including 
approximately $80 billion in oil sector projects), Ambassador 
met with Kuwait Chamber of Commerce Chairman Ali Al-Ghanim to 
discuss potential opportunities for U.S. businesses. 
Al-Ghanim freely admitted that there would be no way that the 
GoK could spend $104 billion on development over the next 
four years, but stressed that there would be opportunities. 
 
¶2. (SBU) Al-Ghanim explained that the projects were not new. 
What Deputy Prime Minister for Economic Affairs Sheikh Ahmad 
Al-Fahad had done, he explained, was to go to the planning 
board and pull out all of the stalled development projects 
and proposals and package them for the government and for 
parliament.  Sheikh Ahmad did not study the capacity of the 
GoK or the private sector to absorb the projects in a limited 
time frame.  Furthermore, Al-Ghanim noted, there were 
demographic challenges.  Kuwaitis made up a third of the 
population.  If the GoK tried to implement all the 
infrastructure projects called for in the next four years, it 
would need to import massive quantities of foreign labor and 
Kuwaitis would drop "to 10 percent" of the population. 
 
¶3. (U) Al-Ghanim stressed that Kuwait would need strong 
foreign companies able to provide management and technical 
skills to implement projects.  He added that good political 
relations between the U.S. and Kuwait helped U.S. companies. 
Although he said U.S. companies could bid on projects in 
their own name, the mechanism he recommended would be to 
establish joint ventures with Kuwaiti partners.  The key 
example, he suggested, was the Equate join venture between 
Dow Chemical and the Kuwaitis.  It included a Kuwaiti State 
owned company, a foreign investor (Dow), and the Kuwaiti 
private sector.  The foreign company brought technical skills 
to the table and the Kuwaitis brought their understanding of 
the local and regional market.  Al-Ghanim added that the 
joint venture partners could look beyond Kuwait to serve the 
broader region. 
 
¶4. (U) With regard to specific sectors, Al-Ghanim stated that 
the power sector, the construction sector, and harbor 
construction all presented good opportunities.  If the 
privatization law were passed, he suggested, there would be 
opportunities to manage power and wastewater utilities or to 
manage airports.  He offered to host U.S. trade delegations 
and to work to facilitate cross border business interests. 
Ambassador suggested that it might be worthwhile to bring a 
delegation of Kuwaiti companies and government officials 
responsible for implementing the development plan to key U.S. 
export centers. 
 
¶5.  (U) The four year development plan is split 54% 
government sector and 46% private sector.  Among other 
things, it provides for private sector participation in 
downstream petroleum, agriculture and in power and water 
projects.  It calls for privatizing the transportation and 
shipping sectors as well as for the construction of a new 
container terminal, a railway (and metro), and starting 
construction on a new business hub (Silk City).  It also 
includes about $80 billion in upstream and downstream oil 
sector investments (including major projects such as 
retendering a fourth refinery project and upgrading Kuwait's 
existing refineries to produce cleaner fuels for exports. 
 
¶6. (SBU) Comment:  It is still an open question as to how 
much Kuwait can implement of its development strategy.  There 
are legal issues (including outdated tender laws), economic 
issues (Kuwaiti banks are still nervous about providing 
financing for projects), and political issues (potential 
parliamentary opposition and concerns about who gets which 
piece of the pie).  For its part the Chamber of Commerce has 
come under attack as being an "illegal" organization 
(septel).  That said, we are seeing more guarded optimism in 
the business community here that "this time there might be 
progress."  Post would be interested in the modalities of 
bringing a "reverse trade mission" of potential Kuwaiti 
consumers to the U.S. to better educate U.S. businesses in 
the potential (and challenges) of doing business here.  If 
possible, we would propose doing so in the November-December, 
2010 timeframe.   End Comment. 
 
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For more reporting from Embassy Kuwait, visit: 
visit Kuwait's Classified Website at: 
 
http://www.intelink.sgov.gov/wiki/Portal:Kuwa it 
 
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WILLIAMS