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 04 ABU DHABI 000073 
 
SIPDIS 
 
DEPT FOR COUNSELOR ZELIKOW, NEA/FO, EB/FO 
TREASURY FOR DEP/SEC KIMMITT AND DAS SAEED 
 
E.O. 12958: DECL: 01/08/2016 
TAGS: PREL EAID EFIN ECON IZ IR IS SY LE AE PK
SUBJECT: A/S WAYNE BRIEFS UAE LEADERSHIP ON STRATEGIC 
INVESTMENT INITIATIVE 
 
REF: 05 STATE 224430 
 
Classified By: Ambassador Michele J. Sison, 
reasons 1.4 (b and d). 
 
 ¶1. (C) Summary:  On the occasion of a condolence call for 
the death of Dubai Ruler and UAE Prime Minister and Vice 
President Sheikh Maktoum, Assistant Secretary for Economic 
and Business Affairs Tony Wayne and Ambassador Sison met 
January 6 with several top UAE officials to discuss the 
Strategic Investment Initiative, the Free Trade Agreement 
negotiations, and terror finance cooperation (latter two 
subjects  reported septel).  UAE officials welcomed further 
dialogue on the strategic initiative.  They also shared some 
of their own experiences with assistance to Iraq, Lebanon, 
and the Palestinians, and raised concerns of Iranian 
influence over Iraqi Shia.  End Summary. 
 
¶2. (C) In the course of a condolence call in Dubai January 6 
for the death of Dubai Ruler and UAE Prime Minister and Vice 
President Sheikh Maktoum, Assistant Secretary for Economic 
and Business Affairs Tony Wayne and Ambassador Sison had 
impromptu substantive discussions with Maktoum's younger 
brother and successor, Sheikh Mohammed bin Rashid al Maktoum 
(MbR), and Minister of State for Foreign Affairs Sheikh 
Hamdan bin Zayed al Nahyan.  They discussed the strategic 
investment initiative, Free Trade Agreement negotiations, and 
terror finance cooperation.  Later that day, A/S Wayne, 
Treasury DAS Ahmed Saeed, Ambassador Sison, EB/IFD/ODF 
Financial Economist Roland de  Marcellus, NEA/ARPI Deputy 
Director Steve Walker, and Acting Consul General Jillian 
Burns (notetaker) met Sheikh Abdullah bin Zayed al Nahyan, 
Minister of Information, to discuss these same issues. 
 
MbR Expresses Interest in Strategic Investment 
--------------------------------------------- - 
 
¶3. (C) MbR interrupted the receiving line of mourners to talk 
for 40 minutes in a televised photo opportunity with A/S 
Wayne and Ambassador, joined by Sheikh Hamdan.  Wayne and 
Ambassador presented the concept of the strategic investment 
initiative, to include a sustained dialogue with the Gulf, 
with initial focus on our first four priorities -- Iraq, 
Palestinian Authority, Lebanon, and Afghanistan.  The goal 
would be an investment in the stability and prosperity of the 
states themselves using assistance to promote these ends. 
The U.S. wants to build with Gulf states the kind of ongoing 
broad discussion we have with other partners, such as the EU 
where we discuss our assessments of the needs, of problems, 
and of the resources we will make available.  We would be 
looking for UAE,s views on the needs for these four 
countries/territories, how to strengthen the mechanisms used 
for assistance, how to best coordinate our efforts, and what 
kind of conditionality should accompany the aid. 
 
¶4. (C) Sheikh Mohammed said he believed in a strong 
partnership with the U.S.  He and Sheikh Hamdan expressed 
interest in the idea of enhanced engagement with the U.S. and 
a sustained and frank dialogue.  MbR stressed the importance 
of holding out economic promise as one of the means of 
combating terrorism and stabilizing the region.  He indicated 
he and other officials would have ideas on all four priority 
regions.  On Iraq, he stressed the importance of Sunni 
inclusion and cited progress with the U.S. approach after 
what he saw as initial U.S. hesitance to reach out to Sunnis. 
 He warned of the danger of Iran spreading its influence to 
Shia oil-rich areas in Iraq and upper Gulf.  Sheikh Hamdan 
emphasized the UAE's continuing support for former Iraqi 
Prime Minister Iyad Allawi, reporting that Allawi had 
telephoned the night before to brief on a meeting of Iraqi 
Sunnis.  Allawi will return to Abu Dhabi within the week for 
further consultations.  Noting the presence of Dubai-based 
Iraqi cleric Ahmad al Kubaysi at the condolence session, 
Ambassador urged UAE assistance in having Kubaysi issue 
statements calling for the cessation of violence in Iraq and 
encouraging peaceful resolution of political differences. 
 
Sheikh Abdullah Also On Board 
----------------------------- 
 
¶5. (C) In a subsequent private meeting, A/S Wayne laid out 
for Sheikh Abdullah U.S. goals for a dialogue with the UAE on 
strategic investment for Afghanistan, Iraq, Lebanon, and the 
Palestinian Authority.  A/S Wayne mentioned our ongoing 
process of coordination, beginning with the invitation to the 
UAE CDA in Washington, Wayne and Saeed,s visit, and the 
planned upcoming visit by Treasury Deputy Secretary Kimmitt 
and Counselor Zelikow.  In preparation for that meeting, A/S 
Wayne suggested expert-to-expert level meetings either by 
phone or by videoconference to deepen mutual understanding on 
the four priority countries/territories.  He also sought 
UAE,s views how to best conduct this dialogue )- either 
bilaterally with each Gulf partner or as a U.S.-GCC dialogue. 
 A/S Wayne mentioned that in the course of 2006, there would 
be international/donors conferences for Afghanistan, Iraq, 
and possibly Lebanon and the Palestinian Authority.  Wayne 
stressed the importance of success of these conferences and 
the need for ongoing coordination and consultation. 
 
¶6. (C) Sheikh Abdullah welcomed the idea of a dialogue.  He 
raised the idea of ) in addition to country-by-country 
discussions ) pulling out issues common to all four 
priorities, such as education and health, to tackle 
thematically.  He cited the proposal for Wadi Arabia 
University, with Israel, Jordan, and the Palestinians all 
donating land, as a particularly innovative idea.  Abdullah 
was critical at the lack of improvement in the health 
conditions in Afghanistan and lamented living conditions in 
the West Bank.  Abdullah also questioned limiting the 
dialogue to just four priorities.  He said it is likely there 
will be countries that will need similar attention in the 
future. 
 
¶7. (C) A/S Wayne explained that Washington had concluded if 
we can get these four areas right, it will make a significant 
difference.  A/S Wayne commended UAE's generous assistance 
made to Pakistan after the earthquake.  He also noted that 
some issues are country-specific, such as the new compact 
between Afghanistan and its donors, which will be presented 
at the London conference in late January. 
 
Not Always Easy to Help 
----------------------- 
 
¶8. (C) Sheikh Abdullah mentioned some difficulties UAE had 
faced in offering assistance to Iraq, Lebanon, and the 
Palestinians. 
 
-- Iraq:  Abdullah cited the problems the UAE had faced when 
it hosted German training of Iraqi security forces.  Iraqis 
wanted the training in Iraq, the Germans did not, so instead 
the Iraqis claimed the training was not up to standard. 
 
-- Lebanon:  The UAE was helping Lebanon with equipment (not 
specified) and has offered training -- but doubted Lebanon 
would accept.  Abdullah also mentioned that in response to a 
recent request from Lebanese Prime Minister Siniora for oil 
products, the UAE had decided instead to transfer to the GOL 
$50 million (Note:  This is similar to the UAE's past 
assistance to Jordan to cover oil costs.)  UAE has had 
problems in the past with its assistance to Lebanon, such as 
when UAE offered demining assistance.  The Israelis would not 
turn over maps, claiming the Lebanese Forces had laid the 
mines but later lost the maps.  The Lebanese Minister of 
Defense tried to get them to waste significant parts of their 
budget on things they did not need, including a headquarters 
in Beirut and Hizbellah tried to limit the extent of 
de-mining. 
 
-- Palestinian Authority:  The UAE had made sizable donations 
to the Palestinians, but faced problems.  For instance, the 
PA had changed the location of the $100mn Sheikh Khalifa 
residential housing project three times, claiming problems 
with disputed ownership of the land. 
 
A/S Wayne commented that one goal of the dialogue would be to 
share such experiences to find better ways of getting things 
done. 
 
Challenge of Lebanon 
-------------------- 
¶9. (C) On Lebanon, A/S Wayne stressed the need for a 
framework for a new Lebanon donors' conference to ensure 
Lebanon follows through on pledged reforms, unlike after 
Paris II.  DAS Saeed stressed that the IMF was the only 
organization with the capacity to monitor the large sum of 
money that Lebanon needs.  Saeed was optimistic that the 
market would react positively to IMF involvement, and 
interest rates on debt would go down.  Abdullah was skeptical 
that the GOL was willing to make the necessary reforms.  In 
his view, the GOL did not believe the international community 
would follow through with sustained pressure out of fear of 
the fragility of the government, caused by pressures from 
Syria, Hizballah, Israel, and internal factional conflict. 
A/S Wayne agreed the GOL was fragile and that Syria was a 
huge problem.  DAS Saeed said Lebanon provided an opportunity 
to prove the effectiveness of good coordination.  Wayne added 
that sometimes the parties want outside pressure as cover for 
doing good things, and Abdullah agreed this was the case with 
former Palestinian Minister of Finance Salam Fayyad.  (Note: 
Abdullah recently confirmed to us that the UAE leadership had 
provided $1mn to Fayyad's Huriyyeh party after Abu Mazen had 
personally interceded.) 
 
If We Forgive Iraqi Debt, Will the 
Money end up in Iranian Coffers? 
---------------------------------- 
 
¶10. (C) A/S Wayne raised the issue of Iraq debt forgiveness, 
asking for an update of UAE activity.  He cited Minister of 
State for Finance Khirbash,s stated position that the UAE 
would work with the Iraqis to forgive the debt.  Wayne 
expressed appreciation for UAE willingness to work according 
to Paris Club terms.  Sheikh Abdullah indicated that the Iraq 
debt issue was not fully resolved yet internally within the 
UAE political structure.  He called it a very sensitive 
issue, given the significant concern over "who calls the 
shots in Iraq today," and the extent of Iran,s role there. 
He wondered if the GCC would get credit from the Iraqi people 
if they cancel the debt or would Iran manage to get a hold of 
the funds in their renewed attempts at calling for war 
reparations, to the tune of $100 billion.  DAS Saeed said the 
U.S. would not have canceled Iraqi debt if we suspected in 
any way that it would end up in Iran.  Abdullah indicated the 
UAE was waiting to see what kind of regime emerged in Iraq ) 
particularly whether or not it would be a "copycat" of 
Iran,s regime ) before finalizing their decisions on any 
agreement. 
 
GCC-Iran relations, Saudi Arabia 
-------------------------------- 
 
¶11. (C) When asked about the December 19 GCC communique, 
which had been tepid on the subject of Iran, Sheikh Abdullah 
claimed its tone actually sent a signal of the issue's 
importance.  He said UAE and Kuwait wanted something stronger 
in the communique, but King Abdullah asked to leave it out to 
give him a chance to follow up with Iran.  He said it was an 
unusual gesture that the Iranian Supreme Leader sent his 
advisor and former Foreign Minister Velayati to Riyadh with a 
letter to King Abdullah.  He heard it was quite a positive 
letter, in which the Supreme Leader assured the king that he 
could deal with President Ahmadinejad.  Sheikh Abdullah 
commented that that has yet to be seen.  Sheikh Abdullah also 
reiterated the Gulf's concerns about the environmental safety 
of the Bushehr nuclear reactor and danger of fallout. 
 
¶12. (C) Sheikh Abdullah also briefed on his trip the previous 
week to Riyadh to discuss the issue of UAE's Peninsula Shield 
Rotation Brigade.  He said the GCC countries were considering 
bringing their troops home and just maintaining a command and 
control center in Riyadh that could recall troops for 
exercises or emergencies.  (Note: Since the 1991 Gulf War, 
every GCC country has provided troops to Hafr al Batin in 
order to protect Saudi Arabia from Iraqi invasion.) 
 
Comment 
------- 
 
¶13. (C) Overall, the UAE leadership seemed receptive to the 
idea of a strategic investment dialogue, noting that greater 
coordination with the U.S. would be desirable.  They look 
forward to more details from our side.  Embassy recommends 
that between now and a visit by Counselor Zelikow and DepSec 
Kimmitt, DVC or telephonic consultation with the UAEG )- 
possibly at the level of MinState Finance Khirbash and MFA 
Director International Cooperation Ambassador Abdul Jalil -- 
be arranged. 
 
¶14. (U) A/S Wayne has cleared on this telegram.  Dubai cable 
being sent out by Abu Dhabi due to the Eid holiday. 
SISON