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UNCLASSIFIED

SIPDIS
TELEGRAM                                        December 23, 2003


To:       No Action Addressee                                    

Action:   Unknown                                                

From:     AMEMBASSY ABU DHABI (ABU DHABI 5390 - PRIORITY)        

TAGS:     PREL, MCAP, MARR, MASS                                 

Captions: None                                                   

Subject:  2004 REPORT TO CONGRESS ON ALLIED CONTRIBUTIONS        
            TO THE COMMON DEFENSE:  UAE SUBMISSION               

Ref:      None                                                   
_________________________________________________________________
UNCLAS        ABU DHABI 05390

SIPDIS
CXABU:
    ACTION: POL 
    INFO:   DAO P/M RSO AMB DCM ECON USLO PAO 
Laser1:
    INFO:   FCS PAO 

DISSEMINATION: POL
CHARGE: PROG

APPROVED: AMB:MMWAHBA
DRAFTED: POL:JFMAYBURY
CLEARED: A/DCM:HOLSIN-WINDECKER; USLO:KM; DAO:BK; ECON:OJ

VZCZCADI950
PP RUEHC RUEKJCS RUEKJCS RUEKJCS RUEKJCS RUEKJCS
RUEOBBA RHRMDAB RUEHZM RUCJACC RHEFDIA RUEKJCS RUEATRS RUEAIIA
RHEHNSC
DE RUEHAD #5390/01 3571247
ZNR UUUUU ZZH
P 231247Z DEC 03
FM AMEMBASSY ABU DHABI
TO RUEHC/SECSTATE WASHDC PRIORITY 2796
INFO RUEKJCS/SECDEF WASHINGTON DC//OSD/ISA/NP//
RUEKJCS/SECDEF WASHINGTON DC//OSD/ISA/NESA//
RUEKJCS/SECDEF WASHINGTON DC//OSD/ISA/AP//
RUEKJCS/SECDEF WASHINGTON DC//OSD/ISA/BTF//
RUEKJCS/SECDEF WASHINGTON DC//OSD/PA&E//
RUEOBBA/COMUSCENTAF SHAW AFB SC
RHRMDAB/COMUSNAVCENT
RUEHZM/GCC COLLECTIVE
RUCJACC/USCINCCENT MACDILL AFB FL
RHEFDIA/DIA WASHINGTON DC
RUEKJCS/CJCS NMCC WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEAIIA/CIA WASHINGTON DC
RHEHNSC/NSC WASHINGTON DC

UNCLAS SECTION 01 OF 09 ABU DHABI 005390 
 
SIPDIS 
 
STATE FOR PM/B AND NEA/ARP 
DOD FOR OSD/PA&E AND OASD/ISA/NESA 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: PREL MCAP MARR MASS TC
SUBJECT: 2004 REPORT TO CONGRESS ON ALLIED CONTRIBUTIONS 
         TO THE COMMON DEFENSE:  UAE SUBMISSION 
 
REF: STATE 305999 
 
----------------------------- 
¶1. (SBU) INTRODUCTION/SUMMARY 
----------------------------- 
 
The UAE in 2003 continued its outstanding record as a 
valuable strategic partner in the Global War on Terrorism 
and in supporting key U.S. regional strategic policy goals. 
Among the highlights of the UAE's contributions to the 
common defense are: 
 
-- Providing basing for USAF aerial refueling, intra- 
theater lift, and Intelligence, Surveillance, and 
Reconnaissance assets in support of Operation Enduring 
Freedom (OEF), Operation Southern Watch (OSW), Operation 
Iraqi Freedom (OIF), and Operation Horn of Africa (OHA); 
 
-- Providing other logistical and non-combat support for 
OEF, OSW, OIF, and OHA; 
 
-- Providing strategic lift estimated at $5 million for a 
Bulgarian infantry brigade deployed to Iraq as part of a 
Polish-led multinational division; 
 
-- Hosting U.S. Navy logistical operation in support of 
the Fifth Fleet; 
 
-- Hosting the U.S. sea services at Jebel Ali Port (Dubai) 
and at Fujairah, with Jebel Ali being the premier U.S. Navy 
liberty port in the world and the only one in the region 
where a nuclear-powered aircraft carrier can be berthed 
pierside; 
 
-- Providing facilities and forces for direct action 
outside the UAE in support of OEF; 
 
-- Direct sharing in costs of U.S. deployments to the 
amount estimated at approximately $93 million; 
 
-- Indirect sharing of costs estimated at approximately 
$173 million; 
 
-- Maintaining an important defense sales relationship 
with the USG; 
 
-- Donating around $100 million to support humanitarian 
assistance and reconstruction efforts in Iraq and 
Afghanistan, including over $32 million provided through 
the UAE Red Crescent Authority (RCA); 
 
-- Providing assistance to the Palestinian people in the 
Occupied Territories, including $5 million in assistance to 
residents of the Gaza Strip in the first half of 2003 and 
providing about 300,000 meals during the month of Ramadan; 
 
-- Hosting numerous high-level military and civilian 
delegations, including Defense Secretary Rumsfeld, former 
USCENTCOM Commander General Franks, new USCENTCOM Commander 
General Abizaid, Air Force Secretary Roche, Chief of Staff 
of the Air Force General Jumper, and Vice Chief of Staff of 
the Air Force Moseley, as well as the State Department's 
Under Secretary for Arms Control and International Security 
John Bolton, Assistant Secretary for Political-Military 
Affairs Lincoln Bloomfield, and Assistant Secretary for 
Near Eastern Affairs William Burns. 
 
--------------------------- 
¶2. (SBU) GENERAL ASSESSMENT 
--------------------------- 
 
¶A. TRENDS/DEVELOPMENTS IN ECONOMIC AND POLITICAL 
FACTORS: 
 
-- POLITICAL DEVELOPMENTS:  Domestic political 
circumstances in the UAE have changed little over the 
past year.  The UAEG's loose federal structure, under 
the leadership of President Zayed bin Sultan Al-Nahyan, 
remains stable and there are no internal or external 
opposition groups.  In December, President Shaykh Zayed 
clarified the UAE succession by promoting his son Mohammed 
bin Zayed as Abu Dhabi Deputy Crown Prince.  Mohammed bin 
Zayed remains Armed Forces Chief of Staff.  Shaykh Zayed's 
eldest son, current Abu Dhabi Crown Prince Shaykh Khalifa 
bin Zayed, is expected to become the country's next 
president when his father departs the scene.  In October, 
Shaykh Zayed promoted another of his sons, Hamdan bin 
Zayed, as Deputy Prime Minister.  Hamdan bin Zayed remains 
the de facto Foreign Minister. 
 
In regional and international affairs, the UAE 
continued to demonstrate its unequivocal support for the 
Global War on Terrorism.  The UAE played a critical role in 
assisting the continuing investigation into the 9/11 
attacks and provided financial documents pertaining to the 
movement of terrorist funds.  The UAE Government 
implemented a law to criminalize money laundering, to 
include terrorist financing, in January 2002.  To date, the 
UAE Central Bank has frozen a total of $3.13 million in 18 
bank accounts in the UAE since 9/11.  The UAE implemented 
the anti-terrorism financing regulations passed by the UN 
Security Council.  Cooperation across the board -- from the 
financial realm through to military, security and 
intelligence  as been strong and sustained. 
The UAE provided logistical support for non-combat 
operations related to OEF and OIF.  As part of OIF, the UAE 
in late July provided strategic lift costing $5 million for 
a Bulgarian infantry brigade that was being deployed to 
Iraq as part of a Polish-led multinational division. 
Additionally, the UAE provided on short notice its frigate 
"Al Emarat" as a flagship of a GCC naval force in defense 
of Kuwait.  The UAE continued its generous humanitarian 
assistance to the Afghan people and in October 2003, the 
UAEG pledged $215 million in reconstruction assistance to 
Iraq. 
 
The UAE remains committed to cooperation with other GCC 
States.  In October, the UAE and Oman formally resolved a 
long-standing border dispute.  At an October 13 meeting, 
the defense ministers of the GCC countries approved 
recommendations from Gulf Arab chiefs of staff to boost the 
5,000-strong Peninsula Shield force to 20,000 troops in 
¶2004.  The GCC members were scheduled to review this 
decision at their annual summit in late December.  The UAE 
commitment to Peninsula Shield is one full mechanized 
brigade, and that is expected to remain the same if and 
when Peninsula Shield is increased.  The UAE has continued 
to back GCC policies on Iran and Iraq.  The UAE permitted 
the basing of USAF tankers in support of OSW, OEF, OIR, and 
OHA.  The UAE's economic and trade relations with Iran 
continued to grow, but there was no change in political 
relations, which remain strained.  In April 2003, officials 
from the UAE and Iran expressed their readiness to broaden 
ties in cultural, political, economic and trade areas, but 
there were no official visits by senior government leaders 
during the year.  The UAE's attention remains focused on 
the contested Abu Musa and Tunb Islands, occupied by Iran 
but claimed by both Iran and the UAE.  The UAE continues to 
take the lead within the GCC in expressing concern about 
Iran's support for terrorism, its military build-up, 
pursuit of weapons of mass destruction, and interference in 
the internal affairs of other countries in the region.  The 
UAE publicly condemned terrorist attacks in Iraq, Saudi 
Arabia, and Turkey, while offering a strong public show of 
support for the Iraqi Governing Council and Iraq's interim 
government.   The UAE has provided assistance to the 
Palestinian people in the Occupied Territories, including 
$5 million in assistance to the residents of the Gaza Strip 
in the first half of 2003.  The UAE Red Crescent provided 
humanitarian assistance in 95 countries in 2003. 
 
ECONOMIC DEVELOPMENTS: The United Arab Emirates is a 
confederation of seven emirates.  Individual emirates 
retain considerable control over legal and economic 
matters, most significantly over ownership and 
disposition of oil and other natural resources, and 
resultant revenues.  Oil production and revenues from 
the sale of oil constitute the largest single component 
of GDP, accounting in 2002 for 30 percent of GDP and 
equaling roughly 50 percent of export and 90 percent of 
government revenue.  Rising or declining oil prices have 
a direct effect on GDP statistics. 
 
-- The great majority of the UAE's oil export income 
comes from Abu Dhabi emirate, though Dubai and Sharjah 
also produce and export a modest amount of oil and gas 
products.  The scarcity of oil and gas reserves in the 
UAE's northern emirates has led to continued attempts at 
economic diversification.  The non-oil sector of the 
UAE's economy actually accounts for more than twice the 
oil sector's direct contribution to GDP and this has 
helped insulate the country from the full effect of 
fluctuating oil prices. 
 
-- Traditionally, oil revenues, along with careful 
management of investments, have helped the UAE avoid 
some of the budgetary problems encountered by other GCC 
states.  The UAE has substantial foreign exchange 
reserves and the government has no foreign debt. 
Continued UAE consolidated budget deficits are financed 
primarily by liquidating or withdrawing interest from 
overseas assets.  There are no figures available for the 
amount of government assets held overseas, but many experts 
believe the Government of Abu Dhabi maintains $200 billion 
to $250 billion under the administration of the Abu Dhabi 
Investment Authority.  The UAEG continues to be reluctant 
to accept IMF recommendations to reform and rationalize 
fiscal policy through measures such as reduction of current 
expenditures and subsidies or instituting taxation.  The 
UAE is, however, working with the IMF to improve the 
quality of its statistics. 
 
-- The Emirate of Abu Dhabi, which finances the UAE's 
military expenditures, continues to build significant 
infrastructure, particularly in the power and water 
sector, where privatization/outsourcing efforts 
continue.  Several large-scale projects, including the 
UAE Offsets Group's "Dolphin" project (to pipe Qatari 
Gas to Abu Dhabi and Dubai) and massive greenfield 
utility developments in Fujeirah and Shuweihat in Abu 
Dhabi Emirate, are moving to execution. 
 
¶B.  TRENDS/DEVELOPMENTS IN AID, PEACEKEEPING OPERATIONS 
AND HUMANITARIAN ASSISTANCE: 
 
-- The UAEG provided generous assistance to Iraq, donating 
around $100 million to support humanitarian assistance and 
reconstruction efforts in Iraq, including over $32 million 
provided through the UAE Red Crescent Authority in 2003. 
The UAE also pledged $215 million to Iraqi reconstruction 
(25% representing money already spent, and the rest for new 
power generation projects.  The UAE built a water treatment 
plant with a 200,000-gallon capacity in Basra, evacuated 
nearly 40 wounded children and their parents to the UAE for 
medical treatment, and rebuilt six hospitals in Iraq, to 
provide a few examples of the type of assistance.  The UAE 
-- via the federal Red Crescent Authority, Dubai Crown 
Prince Muhammad Bin Rashid Al-Maktoum's Charitable 
Foundation and Sharjah Charity International  rovided 
robust assistance to the people of Afghanistan, estimated 
at over $150 million in the last two years.  This includes 
over $50 million in humanitarian assistance and a $50 
million assistance-in-kind grant to the Afghan national 
army.  The UAEG is working to identify projects that would 
fill its $30 million pledge made in Tokyo in 2002. 
 
-- Operation Emirates Solidarity, a $50 million program 
funded by the UAE for demining operations in southern 
Lebanon, continued in 2003.  The two governments are 
working with the United Nations and private contractors to 
complete the operation, which was launched in May 2002. 
Two commercial companies cleared 3.9 million square meters 
of land, removing and destroying 30,904 anti-personnel 
mines, 1,476 anti-vehicle mines, and 1,400 UXO between May 
2002 and May 2003.  It is conservatively estimated that 
130,000 mines, left by the various parties who contributed 
the Lebanese civil war, need to be removed before life in 
the south of the country can return to normal.  The UAEG 
will spend well above the initial $50 million as they 
pledge to do more demining in southern Lebanon. 
 
-- The UAEG also continued its generous humanitarian 
assistance program to the victims of violence in the 
Occupied Territories.  The UAE federal Red Crescent 
Authority, for example, provided $5.2 million in assistance 
to Palestinians in the first half of 2003 and provided 
about 300,000 meals during the month of Ramadan to 
residents of the West Bank and the Gaza Strip. 
 
-- The UAEG maintained its generous levels of development 
assistance in the form of direct grant aid and concessional 
loans to primarily Arab and Muslim countries, including the 
Palestinians, Egypt, Jordan, Morocco, Oman and Pakistan. 
 
---------------------------- 
¶3. (SBU) DIRECT COST SHARING 
---------------------------- 
 
All figures in this report are in U.S. dollars.  All UAE 
Dirham figures were converted at the rate of 3.66 Dirhams 
per one U.S. dollar. 
 
¶A.  Rents:  The UAEG neither leases nor rents any 
privately owned land or facilities for use by U.S. forces. 
 
¶B.  Labor:  The UAE hired laborers and funded construction 
work at Al Dhafra and Al Minhad Air Bases to upgrade 
facilities for use by U.S. forces, as well as by Canadian 
and French forces.  This included road-building, force 
protection fences, gates, utilities upgrade, and project 
site preparations.  It is not possible to estimate the size 
of this work force or its cost to the UAE. 
 
¶C.  Katusa Labor:  N/A 
 
¶D. Utilities:  Electricity, water and sewer were provided 
at no cost to the 380th AEW at Al-Dhafra Air Base, and to 
Minhad Air Base.  Utilities at the port facilities at Jebel 
Ali in Dubai and in Fujairah were included in the annual 
lease fees paid by the U.S. Navy.  The majority of the 
utilities increase is attributed to the increased tempo of 
operations from these bases and facilities due to OSW, OIR, 
OEF, and OHA. 
 
For CY03, the estimated figures for Al Dhafra and Minhad 
are: 
 
Electricity: $800,000; Water: $195,000 
 
¶E. Facilities:  Beginning in CY04, the UAE will have costs 
associated with joint use of facilities of Gulf Air Warfare 
Center, including office space, ramp and hangar space, 
support shops, and ranges. 
 
¶F.  Facilities Improvement Program:  N/A 
 
¶G. Relocation Construction:  In CY04, we expect to see 
support for construction of a new U.S. aircraft ramp at Al 
Dhafra Air Base funded by the U.S.  The cost is $47 
million.  The UAE has given the U.S. the land, and has 
given us the land to build a new fuel storage and transfer 
facility.  The UAE did site preparation, provided fill 
material because of high water table level, built road for 
U.S. sole use, installed perimeter fence with gates, built 
new main entrance gate to facilitate U.S. operation, 
restructured Al Dhafra Air Base force protection measures, 
provided vehicle search area, demolished existing outdated 
structures, and installed utilities. 
 
The UAE has offered to provide funds from a source not 
associated with the Defense Cooperation Agreement account 
to fund the relocation of the main camp at Al-Dhafra Air 
Base from the west side of the base to the east side.  The 
UAE has provided substantial fill material, grading, and 
the use of its facilities there (three large warehouses 
with associated sunshades and other buildings), laying down 
of a new access road with a private gate for the U.S. 
facility.  The current site will be returned to the UAE 
once relocation is complete in CY04, using FY03 MILCON 
already authorized for the construction of semi-permanent 
structures.  The approximate one-time cost to prepare this 
new foundation and use of the UAE warehouses and sunshades, 
and other items is: 
 
Al-Dhafra AB Main Camp Relocation:  $20,000,000 
 
The UAE has offered to provide money from the Defense 
Cooperation Agreement account to fund the NAVCENT move of 
its facilities from Fujairah International Airport to 
Minhad Air Base outside of Dubai.  The approximate one-time 
cost to build this facility and outfit it with suitable 
equipment is: 
 
Minhad AB Furbishment:  $22,000,000 
 
¶H.  Vicinity Improvements:  N/A 
 
¶I.  Miscellaneous:  OSD generated donations to support 
stand-up of the Afghan National Army (ANA) was sizable: 
 
ANA Assistance-in-Kind Donation:  $50,000,000 
 
 
-- Total of Direct Cost Sharing:  $92,995,000 (estimated) 
 
------------------------------ 
¶4. (SBU) INDIRECT COST SHARING 
------------------------------ 
 
¶A. Rents:  An area of approximately 85 acres was secured 
at Minhad Air Base in May CY01 for development by the 
USG as an additional site for the current cargo 
operation at Fujairah International Airport.  In 
November CY02, the UAE provided 21 acres of land at Al- 
Dhafra for the USG to construct hangars and ramp space 
to operate its assets and is now home of KC-10 
operations.  According to Abu Dhabi Supply and Landing 
services, the fair market value of the land is 385 
Dirhams per square meter. 
Al Dhafra Air Base Camp/West: $ 44,700,000 
Al Dhafra Air Base Camp/East: $ 44,700,000 
Al Dhafra East Ramp         : $ 12,000,000 
Al Dhafra KC-10 West Ramp   : $ 12,000,000 
 
Total Rents for CY03:      $112,000,000 
 
Facilities: 
-- The U.S. Navy has been provided a dedicated deepwater 
(14 meter) berthing space in the Jebel Ali Port Complex 
for the berthing of its aircraft carriers.  As of December 
2003, there have been more than 625 port calls in the UAE. 
Due to the current operations tempo, use of Dubai as a 
liberty port was substantially increased in CY03.  Use of 
the Jebel Ali Port Complex represents a unique, valuable 
resource for the Navy.  The carrier berth (10/11) and berth 
66, where the Navy logistics site is maintained were 
provided without lease.  When ships visit, only port fees 
were charged.  It should be noted that when not in use by 
the U.S. Navy, the port allows commercial ships to use the 
berth.  Additionally, land has been given to the Navy next 
to the carrier berth to allow them to set up an R&R 
facility with shops, fast food outlets and recreational 
facilities for sailors to use while on port liberty.  The 
following figures were provided by Jebel Ali Port Authority 
for potential annual revenue gained if land was 
commercially developed, and if the carrier berth was a 
dedicated commercial berth. 
Port Land Site:     $1,500,000 
50 Days at Berth 10/11:  $  622,000 
192 Days at Berth 66:  $2,602,000 
 
-- The UAE has provided other invaluable support for 
OEF and OIF, including the use of facilities in various 
locations.  For example, the U.S. Navy was allowed to use 
the port of Fujairah, strategically situated on the Gulf of 
Oman, to offload supplies for transport by land to Dubai, 
rather than transiting the Straits of Hormuz. 
 
Estimated Value of UAE Forward Operation Bases: 
 $20,114,751 
 
¶B.  Tax Concessions/Customs/Tolls/Duties: 
 
Fees and charges (numbers in brackets indicate fees 
levied): 
 
-- Landing and cargo fees levied:  ($900,000) 
-- Port fees and cargo handling levied: ($1,500,000) 
-- Taxes and customs duties waived:  $3,000 
-- Visa issuance charges levied:    ($4,000) 
-- Overflight authorizations waived:     $2,565,000 
 
¶C. Miscellaneous: 
 
-- During every U.S. Navy aircraft carrier port visit, 
the Dubai police provide 24-hour police security 
presence at the Navy berth.  Following the terrorist 
attack on the USS Cole in Yemen in October, 2000, the 
Dubai authorities increased security for U.S. Navy ship 
visits, providing boat patrols, EOD police dogs and UAE 
Naval and Coast Guard support, as well as the use of 
port facilities to support U.S. security detachment 
personnel observation posts and command center.  Security 
requirements were increased at both Jebel Ali and Fujairah 
port and airport.  The estimated cost for security provided 
by host government at all three facilities is: 
Est. Cost for Jebel Ali and Fujairah sites:  $320,000 
 
-- Note that while costs cannot be assessed, the UAE 
Port Authority provides emergency medical and fire 
fighting services at Fujairah International Airport and 
Jebel Ali Port.  UAE Military Police are also provided 
at Fujairah International Airport. 
 
-- The UAE Air Force provided considerable security to 
the forces at the Al-Dhafra, Al-Bateen and Minhad Air 
Bases through the infrastructure of the bases, security 
personnel and HAWK missile batteries in the area. 
 
-- UAE Contributions to the Air Warfare Center (AWC):  A 
joint CENTAF (USAF) and UAE Air Force and Air Defense 
Initiative to initially provide out of CONUS training 
for fighter units in the Gulf.  UAE has contributed the 
main schoolhouse ($8 million) to house the facility at 
Al-Dhafra AB and is now providing additional funds ($26 
million) to upgrade other facilities and fill them with 
necessary furnishings and equipment. 
 
Value of AWC Facilities provided:  $34,000,000 
 
TOTAL VALUE OF INDIRECT COST SHARING (WHERE CAPTURED): 
 
$173,726,751 (estimated) 
 
--------------------------------------------- -------------- 
¶5. (SBU) GRANT AID/PEACEKEEPING AND HUMANITARIAN ASSISTANCE 
--------------------------------------------- -------------- 
 
¶A.  Grant Aid: 
-- There is very little information publicly available 
on UAE spending, and only very general categories of 
spending are published by the UAE Central Bank. 
Published reports through 1996 indicate that the UAE 
gave foreign aid equivalent to 3.5 percent of GDP. 
 
-- One of the primary vehicles for administering the 
UAE's foreign aid program, the Abu Dhabi Fund for 
Development (ADFD), was established in 1971 as an 
autonomous national development institution of the 
Government of Abu Dhabi.  Overall, 56 countries have now 
benefited from the ADFD's assistance programs.  The ADFD 
also acts as an administrator of development assistance 
extended directly by the Government of Abu Dhabi.  The 
primary objective of the fund is to offer aid to 
undeveloped and developing countries in the Arab World 
by extending project loans, guarantees, grants for 
technical assistance or feasibility studies, and equity 
participation in projects.  Its emphasis has been on 
projects that upgrade infrastructure, improve health and 
educational facilities and generate employment 
opportunities.  Funding is typically made available in the 
form of concessionary loans, usually offered at a low 
interest rate, a long repayment schedule, and long grace 
period.  The ADFD has provided  r managed for the Abu 
Dhabi government  bout $19.25 billion in development 
assistance since 1971. 
 
¶B.  UN Peacekeeping and Other Humanitarian Operations: 
 
-- UAE Institutional Arrangements for Peacekeeping and 
Other Humanitarian Operations:  The UAE's contributions 
to international operations are usually handled via the 
UAE Red Crescent Authority (RCA) and the Zayed 
Foundation.  Both are nominally NGOs and they enjoy 
close links with UAEG officials and receive highly 
publicized donations from the ruling family. 
Established in 1992, the Zayed Foundation is entirely 
funded by President Zayed and to date has funded 
humanitarian assistance programs overseas valued at 
slightly over $100 million.  The RCA receives donations 
from the ruling family and members of the public.  The RCS 
worked closely with the UAE Armed Forces during the Kosovo 
crisis. 
 
Other Humanitarian Operations: 
 
-- The UAE -- via the RCA, the MBR Charitable Foundation 
and Sharjah Charity International -- has already 
provided over $50 million in humanitarian assistance to 
the Afghan people.  The RCA has constructed a refugee camp 
in Chaman in Pakistan which houses between 10,000-40,000 
refugees, and includes a 50-bed hospital, mosque and 
playground.  The RCA also has established an air bridge to 
fly humanitarian assistance and medical supplies to 
refugees on the Iranian-Afghan and Pakistani-Afghan 
borders and has provided $365,000 in direct funding and 
equipment for the Afghan Red Crescent Society hospital 
in Kabul.  The RCA is also distributing relief supplies 
inside Afghanistan.  Shaykh Mohammed bin Rashid's 
Charitable Foundation has established three refugee camps 
in the Spin Boldak area in eastern Afghanistan while 
Sharjah Charity International has built one camp in the 
same region.  The camps inside Afghanistan each house 
between 5,000-10,000 refugees. 
 
-- The UAEG donated $50 million for the demining of 
southern Lebanon.  Two commercial companies cleared 3.9 
million square meters of land, removing and destroying 
30,904 anti-personnel mines, 1,476 anti-vehicle mines, and 
1,400 UXO between May 2002 and May 2003. 
 
¶C. Force Contribution for UN Operations:  N/A 
¶D. Current Contingency Operations:  During OIF, the UAE 
operated a hospital in Baghdad that required military 
escorts.  There were logistical costs associated with 
establishing a hospital and transportation in Baghdad 
during combat operations.  During OEF, OIF, OSW, and HOA, 
there were daily overflight operations.  The UAE provided a 
strategic lift to a Bulgarian battalion of their Polish 
brigade being deployed to Iraq after the Iraq war. 
 
¶E. Military Assistance:  N/A 
 
¶F.  Counter proliferation Contributions:  A USG 
interagency team visited the UAE in December 2003 to 
conduct a nonproliferation/export controls workshop on 
weapons of mass destruction awareness with a wide range of 
UAEG officials. 
 
----------------------------- 
¶6. (U) GROSS DOMESTIC PRODUCT 
----------------------------- 
 
¶A. UAE nominal GDP in 2002 was USD 70 billion. 
¶B. The UAE Ministry of Planning projects a growth rate of 
4.7% in 2003.  We believe that this reflects a robust 
growth in oil prices and the non-oil sector. 
 
----------------------------- 
¶7. (SBU) DEFENSE EXPENDITURES 
----------------------------- 
 
¶A. Defense Expenditures for 2003, Projected Outlays for 
2004-2007 
 
-- There has been no information published on the CY03 
defense budget.  However, UAEG defense expenditures for 
salaries and fixed costs average $2 billion per year, and 
procurement varies according to program requirements and 
oil prices, according to informed sources. 
 
Major Defense Expenditures in 2003: 
 
-- As part of the $8 billion F-16 deal, the UAE is 
purchasing (via FMS) training, weapons and associated 
support amounting to $1.5 billion.  The first aircraft will 
be delivered to the U.S. training base in March 2004 and 
then to the UAE in November 2004; 
 
-- The UAE is in the process of upgrading its Mirage 
fighter fleet and has purchased 32 additional 2000 Mirage-9 
fighters.  Most of the 32 Mirage 2000-9's were delivered in 
CY03.  The contract for the new Mirages, unveiled in CY98, 
was $3.2 billion.  The deal to upgrade the 30 Mirage 2000-5 
aircraft already in service is worth $6 billion; 
 
Projected outlays for 2004-2007: 
 
The UAE is three-quarters of the way through a ten-year 
program of military modernization (1995-2005) which, 
according to press reports, should result in the 
acquisition of $15 billion worth of equipment. 
Following are elements: 
-- Negotiations are under way for the French to sell six 
patrol boats worth $600 million; 
 
-- 12 68-meter Baynunah Class Guided Missile Boats 
programmed for delivery through 2006; 
-- 6 CH-47A twin rotor heavy lift helicopters that could be 
used in special operations roles were acquired from Libya. 
The UAE Armed Forces is currently evaluating the upgrade of 
these air frames to CH-47F, at an estimated cost of $180 
million. 
-- 1 130-meter ex-Kortenouaer Class Frigate currently 
under negotiation with the Netherlands; 
 
-- An unknown number of 90-meter multi-role Corvettes; 
 
-- 3 CASA 295 Fixed Wing Maritime Patrol Aircraft with 
ASW/SIGINT capability programmed for delivery through 
2008; 
 
-- 2 206/7-type diesel submarines under negotiation with 
Germany; 
 
-- 1 Oiler/Replenishment Ship, Chinese constructed, with 
Dutch systems, still to be funded; 
 
-- As a follow-on to the F-16 deal, the UAE is 
considering purchasing aerial refueling tankers, 
cargo aircraft, and command and control; 
 
-- The UAE already is an extensive user of U.S. military 
training programs;  all U.S. military training is paid 
via FMS cases worth approximately $63 million. 
 
¶B. Defense Personnel: 
-- Civilians:  Negligible 
 
-- Active Duty: 62,000 (no projections available for next 
five years) 
 
-- Committed Reserves:  Negligible. 
 
----------------------- 
¶8. (U) POINT OF CONTACT 
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Point of Contact is Joel Maybury, Political 
Officer 
 
Voice:   971/2/443-6691, ext. 2408 
Fax:     971/2/443-4771 
E-mail:  MayburyJF@state.gov 
Class:   MayburyJF2@state.sgov.gov 
 
WAHBA