This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 04 MANAMA 000138 
 
SIPDIS 
 
STATE FOR NEA, NEA/ARPI, NEA/RA, PM, PM/SNA 
DEFENSE FOR OSD/PA&E 
DEFENSE ALSO FOR OASD/ISA/EUR, OASD/ISA/NP, OASD/ISA/AP, 
OASD/ISA/NESA, AND OASD/ISA/BTF 
 
E.O. 12958: N/A 
TAGS: MARR MCAP PREL BA ECTRD BILAT
SUBJECT: BAHRAIN:  2005/2006 REPORT TO CONGRESS ON ALLIED 
CONTRIBUTIONS TO THE COMMON DEFENSE 
 
REF: 05 STATE 223383 
 
¶1. (U) SUMMARY: In contrast with its size, Bahrain makes an 
invaluable contribution to U.S. security objectives in the 
Gulf region by hosting and providing support to the U.S. 
Naval Forces Central Command/Fifth Fleet and the Naval 
Support Activity. In 2004 Bahrain was an important coalition 
partner in support of both Operation Enduring Freedom (OEF) 
and Operation Iraqi Freedom (OIF). Previously in 2002, in 
recognition of Bahrain's contributions to U.S. security 
efforts in the region, the U.S. granted Bahrain Major 
Non-NATO Ally (MNNA) status. In 2003, Bahrain once again 
demonstrated its support for U.S. security efforts in the 
region by providing critical basing and overflight rights to 
a large contingent of U.S. forces in support of OIF. During 
OIF, Bahrain also deployed troops and equipment to support 
the defense of Kuwait. Bahrain's small economy and dwindling 
oil reserves require that the government relies in part on 
assistance from its wealthier neighbors to meet its budgetary 
requirements, including infrastructure upgrades. 
Nevertheless, Bahrain annually absorbs an estimated USD 56 
million in recurring costs associated with the permanent 
presence of U.S. defense forces in the country. In 2004 and 
2005, post estimates these recurring costs at USD 56,919,000 
and USD 55,579,000 respectively.  End Summary. 
 
¶2. (U) GENERAL ASSESSMENT: The U.S., and particularly the 
U.S. Navy, has worked closely with Bahrain for more than 
fifty years. When the U.S. Fifth Fleet was re-commissioned in 
1995, Bahrain took the controversial step of being the first 
Gulf State to provide host government support for regionally 
"home-ported" U.S. Navy forces, and Bahrain remains the only 
country in the region which hosts a permanent component 
command headquarters, specifically, headquarters facilities 
for the Commander of Naval Forces, U.S. Central Command 
(COMUSNAVCENT). COMUSNAVCENT directs naval operations in the 
Arabian Gulf, Arabian Sea, and Gulf of Aden in support of 
Operations Enduring Freedom and Iraqi Freedom, CJTF Horn of 
Africa, as well as Maritime Interception Operations to enable 
freedom of navigation and to prevent oil smuggling, piracy 
and various other operations in support of the Global War on 
Terrorism. Bahrain's relatively stable and secure political 
environment allows deployed U.S. Navy ships to stop, 
replenish supplies, and provide crews much needed onshore 
rest and recreation opportunities. In 2004, 421 U.S. Navy 
ships called at Manama while 377 ships called in 2005. In 
addition to the activities of four home-ported minesweepers, 
Bahrain is currently the U.S. Navy's busiest overseas port. 
Additionally, U.S. military and military-contracted air 
traffic at Bahrain's International Airport and other local 
facilities encompassed 3521 landings in 2004 and 3415 
landings in 2005. Bahrain also provides air defense and force 
protection for all U.S. forces deployed here. Overall, given 
its limited resources, Bahrain contributes significantly to 
the common defense. Bahrain also displays exceptional 
leadership in moving forward with and supporting the GCC's 
mutual-defense agreement. 
 
A.1 MAJOR POLITICAL DEVELOPMENTS:  Bahrain is a strong ally 
going through the political strains of democratization.  It 
held peaceful municipal council and National Assembly 
elections in 2002.  A new bicameral legislature with one 
elected and one appointed house convened in December 2002. 
This is the first elected legislature to sit in Bahrain since 
¶1975.  Four major political societies dominated by Bahrain's 
leading Shia opposition group boycotted the parliamentary 
elections, but after a period of confrontation, each of the 
boycotting groups has registered with the government as a 
political society and there are indications that they are 
seriously weighing participation in the next round of 
parliamentary elections, in October 2006.  Bahrain will also 
hold municipal elections in May 2006. Bahrain offers public 
support for each stage of Iraq's political transformation and 
provides humanitarian support and technical training to build 
capacity in Iraq's finance and banking sectors. 
 
A.2.  MAJOR ECONOMIC DEVELOPMENTS:  Bahrain's USD 11.6 
billion (2005 estimate) economy remains oil dependent, 
although Bahrain is not an oil-rich country.  Bahrain 
produces some 38,000 barrels per day of oil and receives 
150,000 barrels per day from Saudi Arabia, half of the 
production of the nearby offshore Abu Sa'afa field. Grant 
assistance from other GCC states, primarily Saudi Arabia, 
Kuwait, and the United Arab Emirates, is an important source 
of income.  Sustained high global oil prices have enabled 
Bahrain to invest in upgrading its physical infrastructure 
and to invest in capital projects such as a new port, 
expansion of Aluminum Bahrain's (ALBA) production capacity, 
renovation of the GOB's oil refinery, and the construction of 
a Formula One racetrack and associated facilities.  These 
investments are consistent with the Government's efforts to 
diversify the economy through development of competitive 
industrial and services sectors, especially financial, 
transportation, and hospitality.  Per capita GDP is roughly 
estimated at USD 20,500 for this country of approximately 
688,000.  The United States and Bahrain signed a free trade 
agreement in September 2004 and the legislatures of both 
countries ratified the agreement by the end of 2005. 
President Bush signed the agreement into law in January 2006. 
 Entry into force is pending Bahrain's implementation of 
provisions in the agreement dealing with intellectual 
property rights protection. 
 
¶B. MAJOR DEFENSE CONTRIBUTIONS: Most importantly, the GOB has 
provided (and continues to provide) indispensable support for 
deployment of U.S. forces. In support of OEF and OIF, the GOB 
provided beddown for U.S. forces, critical aircraft 
overflight and landing clearances, as well as ship clearances 
and dockage. Since the commencement of OIF, Bahrain has 
provided key storage facilities along with troops and 
equipment for increased force protection requirements. 
 
While the Government of Bahrain is undergoing a process of 
economic liberalization and diversification, it remains 
committed to a strong and capable defense force. This 
commitment is reflected in both the national budget and in 
the King's policies. The largest portion of the budget, USD 
750 million, or 16.1 percent of the total, goes toward 
national and regional defense, of which USD 630 million is 
the MOD budget.  (The National Guard and other security 
elements account for the remainder.)  During the GCC 
Millennium Summit the King spearheaded passage of a common 
defense agreement, which affirmed "the principal of joint 
security by means of beefing up cooperation and 
coordination." Bahrain continues to upgrade its military 
capabilities in order to enhance its own as well as GCC 
Defense Force capabilities. 
 
In 2004, Bahrain coordinated the delivery of 20 M109A5 
artillery pieces and began the process of upgrading its 
Multiple Launch Rocket Systems and F-16 aircraft. Of special 
note, in 2004, Bahrain made major improvements to its air 
defense posture by programming and finalizing procurement of 
a TPS 59 Radar system, all required training and associated 
communications, control and support infrastructure. This 
important upgrade not only supports regional defense but also 
provides force protection for U.S. service personnel 
stationed in Bahrain. Furthermore, the GOB is a regional 
leader with regard to both the U.S. SECDEF's Cooperative 
Defense Initiative (CDI) and U.S. Consequence Management 
programs. Regarding CDI, the BDF has begun the process for 
shared early warning as well as integration of coastal radar 
for passive defense. Annually the BDF also hosts bi-lateral 
and multi-national exercises, improving interoperability and 
shared defense through training.  Bahrain was a front-runner 
in cooperative defense in support of the Qatari Armed Forces 
during Eagle Resolve 05 (consequence management exercise) as 
the State of Qatar prepares for the 2006 Doha Asian Games. 
 
Perhaps the most notable initiative of the BDF to enhance 
interoperability is the commencement of restructuring their 
ground force units.  With BDF air and naval units already 
closely resembling US Command, Control and Force structure, 
the ground force units are being melded into a two brigades, 
closely emulating US Army Brigade Combat Teams.  With one 
envisioned as a heavy brigade and the other a light, the BDF 
ground forces could more easily integrate into bilateral or 
multilateral operations. 
 
¶C. PEACEKEEPING CONTRIBUTIONS. Not applicable. 
 
¶D. CONTRIBUTIONS TO OEF/OIF: In direct support of OEF and 
OIF, Bahrain in 2003 deployed 1500 troops, a tank battalion 
task force, and its frigate the RNBS Sabha to defend Kuwait. 
Bahrain also flew combat air patrol (CAP) over Kuwait and 
Bahrain, and continues to keep F-16's on 24-7 strip alert. 
 
Although the contributions of 2003 to OEF and OIF have been 
scaled back as a result of the end of major combat 
operations, the Bahrainis continue to support coalition 
efforts against insurgency in many ways.  Bahrain continues 
to allow over-flight, use of naval and aerial port facilities 
as needed and also authorize the use of training ranges and 
facilities for several smaller, specialized units flowing 
into the Areas of Responsibility for OEF and OIF.  In 2005, 
Bahrain provided material support to a regional force 
participating in OEF.  Most importantly, their ideology in 
fighting the Global War on Terror is consistent with that of 
the US. 
 
¶3. (U) 2001 GOB DIRECT COSTS SHARING/ASSISTANCE IN SUPPORT OF 
U.S. DEFENSE PRESENCE IN BAHRAIN: 
 
¶A. RENTS: The GOB does not pay for any lodging expenses 
associated with the permanent stationing of U.S. forces in 
Bahrain. 
 
¶B. LABOR: The GOB does not pay any labor costs associated 
with U.S. defense presence in Bahrain. 
 
¶C. KATUSA LABOR: Not applicable to Bahrain. 
 
¶D. UTILITIES: The GOB does not pay for any utilities 
associated with the permanent stationing of U.S. forces in 
Bahrain. 
 
¶E. FACILITIES: None. 
 
¶F. FACILITIES IMPROVEMENT: None. 
 
¶G. RELOCATION CONSTRUCTION: None. 
 
¶H. VICINITY IMPROVEMENT: None. 
 
¶I. MISCELLANEOUS: None. 
 
¶4.  (U) 2001 GOB INDIRECT COSTS SHARING/ASSISTANCE IN SUPPORT 
OF U.S. DEFENSE PRESENCE IN BAHRAIN: 
 
¶A. VIP SECURITY/SECURITY FOR GENERAL OFFICERS OR EQUIVALENT 
DIGNITARIES: The GOB provides the use of official vehicles, 
drivers, and security personnel, and escort officers for all 
senior, official visits to Bahrain, including the U.S. 
military. During 2004, and 2005, the GOB hosted scores of 
General Officers or equivalent dignitaries. If the U.S. 
government had paid for this service, as we do in other 
countries, we estimate the cost to the U.S. taxpayer would 
have been close to USD 1.2 million annually. 
 
¶B. There is no Status of Forces Agreement (SOFA) between the 
United States and Bahrain, but the two countries signed a 
Defense Cooperation Agreement (DCA) in 1991.  The DCA was 
amended in 2002 and runs through 2016.  As host nation to 
COMUSNAVCENT/Fifth Fleet, the GOB permitted numerous U.S. 
Navy ship visits to Bahrain with associated shore leave by 
U.S. service men and women. 
 
¶C. LEASED LAND: In 1997 the Naval Support Activity occupied 
23 acres. Currently, it uses 143 acres of prime commercial 
real estate in Manama (79 acres), Mina Salman port (39 
acres), and Bahrain International Airport (25 acres). The 
total USG lease costs for the land and buildings are USD 7 
million. We estimate the GOB's foregone rent at USD 30 
million. Furthermore, the U.S. has rent-free use of 156 acres 
of land and facilities at Bahrain's air force base. We 
estimate the GOB's foregone rent for the use of this property 
to be USD 8.5 million. 
 
¶D. CUSTOMS: The Naval Support Activity pays some Customs fees 
on certain imported goods, while other imports are exempt 
from import duties. We estimate cost savings to the USG from 
foregone duty to be USD 800,000. 
 
¶E.  FACILITIES: The GOB has absorbed expenses incurred by 
U.S. military forces at both its port and military and 
commercial airfields, specifically dock space, airfield and 
airport ramp space. For 2004 we estimate these expenses to be 
USD 16,419,000 (USD 11,367,000 for uncharged ship docking 
fees, USD 5,052,000 for uncharged BAH landing and parking 
fees). In 2005 we estimate these expenses to be USD 
15,079,000 (USD 10,179,000 for uncharged ship docking fees, 
USD 4,900,000 for uncharged BAH landing and parking fees). 
 
¶5. (U) GRANT AID, PEACEKEEPING, HUMANITARIAN ASSISTANCE, 
COUNTER-PROLIFERATION, AND NUCLEAR THREAT REDUCTION: 
 
¶A. GRANT AID: Bahrain does not usually provide annual 
budgetary outlays for foreign assistance. However, in 2003 
the GOB provided USD 500,000 budget assistance via the World 
Bank for projects to assist the Afghan government. Bahrain 
has also made pledges of in-kind assistance to help rebuild 
Iraq's banking sector. In 2005, Bahrain contributed USD 2 
million to the Pakistan relief efforts in the aftermath of 
the earthquake.  Bahrain continued to show their cooperation 
and partnership with the U.S. in 2005 by contributing USD 5 
million to the Hurricane Katrina relief efforts. 
 
¶B. PEACEKEEPING: Not applicable. 
 
¶C. UN OPERATIONS: Negligible. 
 
¶D. CONTINGENCY OPERATIONS: Not applicable. 
 
¶E. MILITARY ASSISTANCE: Not applicable. 
 
¶F. COUNTER-PROLIFERATION: A co-signer to the 1996 CTBT 
Treaty, Bahrain has a public policy of support for 
international efforts to counter all weapons of mass 
destruction, including nuclear weapons. 
 
¶6. (U) DATA ON ECONOMICS: GDP for Bahrain was USD 10.93 
billion in 2004, and USD 11.58 billion in 2005. 
 
¶7. (U) DATA ON DEFENSE: 
 
¶A. DEFENSE BUDGET: The exact Bahrain defense budget in 
unknown, but is estimated to be approximately USD 629.0 
million in 2004 and USD 630.0 million in 2005. 
 
Actual outlays for 2004 were: 
- Large Aircraft IR Countermeasures, USD 43 million FMF 
- TPS 59 Air Surveillance Radar, USD 38.6 million FMF/FMS 
- 20 M109A5 Howitzers, USD 13.4 million FMS 
 
Projected outlays for 2005-2008 are: 
- F-16 Common Configuration Implementation Upgrade, USD 300 
million FMS 
- 9 UH-60M Blackhawk helicopters, USD 220 million FMF/FMS 
- JDAM software upgrade, USD 21 million FMS 
- Multiple Launch Rocket System Fire Control upgrade, USD 20 
million FMS 
- 180 Javelin Anti Armor Missiles with 60 Launchers, USD 14 
million FMF 
- 250 TOW II RF Missiles, USD 10 million FMS 
- RBNS SABHA Frigate Sonar repair/upgrade, USD 3.2 million FMF 
- 1 Avenger missile launcher, USD 3.2 million FMF 
- F-16 Joint Mission Planning System, USD 3 million FMS 
- RBNS SABHA Frigate communications upgrade, USD 2.1 million 
FMF 
- 6 M1025 HMMWVs, USD 651 thousand FMS 
- 150 PVS-7 NVDs, USD 200 thousand FMS 
 
¶B. DEFENSE PERSONNEL: The BDF has approximately 12,000 active 
duty personnel. 
 
¶7. POCs for AMEMBASSY Manama are Pol/Econ Chief Steve Bondy 
at (973) 17 242-908 and LtCol RJ Colson, USMC at (973) 17 
242-954. 
 
MONROE