VZCZCXRO6621
OO RUEHDE RUEHDIR
DE RUEHMK #1956/01 3261458
ZNY CCCCC ZZH
O 221458Z NOV 06
FM AMEMBASSY MANAMA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6045
INFO RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE PRIORITY
RUEATRS/TREASURY WASHDC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RHMFISS/HQ USCENTCOM MACDILL AFB FL PRIORITY
RHBVAKS/COMUSNAVCENT  PRIORITY

C O N F I D E N T I A L SECTION 01 OF 03 MANAMA 001956 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR NEA/ARP, EB/CBA 
STATE PASS USTR FOR J BUNTIN 
COMMERCE FOR 4520/ITA/MAC AND OGC/CLDP 
TREASURY FOR JROSE AND KRAMANATHAN 
 
E.O. 12958: DECL: 11/21/2016 
TAGS: ETRD ECON EINV PREL BEXP BA BILAT ECTRD
SUBJECT: A/S BOHIGIAN FINDS GOB, BUSINESS EAGER TO BENEFIT 
FROM FTA 
 
REF: MANAMA 1700 
 
Classified By: Ambassador William T. Monroe, Reasons 1.4(b) and (d). 
 
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SUMMARY 
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¶1. (C) Commerce Assistant Secretary for Market Access and 
Compliance David Bohigian November 16 called on senior GOB 
officials, addressed an AmCham-sponsored FTA event, and met 
with U.S. and Bahraini company executives to promote 
"friction-free" bilateral trade and highlight the U.S. as a 
dynamic and welcoming destination for foreign direct 
investment (FDI).  During the visit, the local business 
community's ongoing appetite for specific guidance on 
applying the benefits of the FTA was evident.  Bahrain 
remains slow off the mark in promoting awareness and 
understanding of the FTA.  We will continue to push them to 
do more.  End Summary. 
 
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COMMERCE MINISTER HIGHLIGHTS BILATERAL COOPERATION 
--------------------------------------------- ----- 
 
¶2. (C) Minister of Industry and Commerce Hassan Fakhro 
welcomed A/S Bohigian and delegation and praised the USG for 
ongoing technical assistance to Bahrain.  His recognition of 
the MEPI-funded Commercial Law Development Program (CLDP) was 
particularly laudatory.  Fakhro expected a new Companies Law, 
to which CLDP consultants had contributed heavily, to be 
passed in the next parliamentary session.  The Ambassador 
noted that visiting CLDP staff had recently described the law 
as world class. 
 
¶3. (C) Fakhro added that, in consultation with the National 
Institute of Standards and Technology, the GOB had drafted a 
new Standards Law that would also be submitted to parliament 
in the next session.  Assistant Undersecretary for Standards 
and Consumer Protection Abdul Razak Zainalabedin added that 
the GOB was meeting with the GCC Standards Committee to shape 
discussion on pending standards proposals. 
 
¶4. (C) On what the U.S. could do to deepen Bahraini 
investment in the U.S., Fakhro suggested that GOB officials 
would welcome a U.S. "roadmap" offering advice.  Fakhro also 
cited a need for good FTA success stories from Jordan and 
Asia that could provide examples of effective investment and 
joint-venture strategies. 
 
¶5. (U) Fakhro pointed to the Bahrain Investment Wharf (BIW), 
which he had officially launched the previous day, as an 
example of steps the GOB was taking to further its own 
interest in attracting FDI.  He noted that it would be 
located adjacent to the new Bahrain Industrial Park and could 
serve as an example of the public and private sectors working 
together in constructive competition for investment.  (Note: 
At the November 15 opening ceremony, BIW Chairman Ahmed Al 
Qattan described the FTA as a key feature in attracting FDI 
to Bahrain in general and the BIW in particular.  The BIW 
corporate brochure devotes significant space to the FTA.  End 
Note.) 
 
¶6. (C) A/S Bohigian asked about ongoing labor reform.  Fakhro 
acknowledged that Bahraini unemployment was a concern, but 
added that the GOB had moved to remedy unemployment.  (Note: 
The Prime Minister announced November 20 that just four 
percent of Bahrainis registered with the National Employment 
Project remained unemployed.  End Note). 
 
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EDB CHIEF EXECUTIVE SHARES VISION 
--------------------------------- 
 
¶7. (U) At the Economic Development Board (EDB), Shaikh 
Mohammed identified the three pillars to Bahrain's economic 
strategy: First, position Bahrain's private sector as an 
"engine of growth for the future;" second, direct the GOB's 
evolution from operator to regulator through privatization of 
the post office, port and airport, and third, promote the 
education and training of Bahrainis in order to achieve a 
more skilled, competitive workforce.  Shaikh Mohammed also 
said educating the public on the relevance of trade 
 
MANAMA 00001956  002 OF 003 
 
 
principles such as the protection of intellectual property 
rights (IPR) would be a priority.  He asked for U.S. 
assistance in developing a fresh public awareness campaign. 
 
¶8. (C) Shaikh Mohammed said a comprehensive ten-phase 
national land reform plan commissioned by the EDB had just 
been completed for the Crown Prince's review.  The plan, 
produced by U.S. firm Skidmore, Owings and Merrill, provides 
a framework for the strategic development of Bahrain's land 
resources.  The lack of a transparent land acquisition regime 
has been a perennial complaint among Bahrain's business 
community.  In addition to commercial land development, the 
plan also addresses Bahrain's housing needs. 
 
¶9. (C) Shaikh Mohammed also mentioned that the EDB is 
planning trade missions to raise Bahrain's profile with U.S. 
investors.  The next trade mission could occur sometime 
during the first quarter of 2007, perhaps at the end of 
February or beginning of March.  He said he was particularly 
interested in attracting more manufacturing to Bahrain.  The 
Ambassador noted the recently announced investment of a U.S. 
automotive parts manufacturer as a step toward that goal. 
(Note: Tactics Middle East (TME) announced plans to build a 
$60 million car parts factory in Bahrain.  The local press 
quotes a TME official as citing the FTA as a draw for 
investment in Bahrain.  End Note.) 
 
---------------------------------------- 
AMCHAM EVENT POINTS TO NEED FOR GUIDANCE 
---------------------------------------- 
 
¶10. (C) In an AmCham-sponsored FTA promotional breakfast, A/S 
Bohigian said the U.S. welcomes Bahraini investment and noted 
that the majority of U.S.-international trade takes place 
with our FTA partners.  He called on the business community 
to pursue the full benefits of the FTA in the interest of 
furthering "friction-free" trade in Bahrain and the region. 
A/S Bohigian responded to questions from the audience 
following his remarks.  As was the case during Commerce 
Deputy Assistant Secretary Holly Vineyard's visit, several 
questions illustrated an ongoing desire among many in the 
local business community for specific guidance on benefiting 
from the FTA (reftel). 
 
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PRIVATE SECTOR SEES PROMISE 
--------------------------- 
 
¶11. (C) In a meeting with Microsoft, Country Manager Sherif 
Bayoumi and Services Manager Ghassan Mteirek noted that their 
positive relations with the GOB were strengthened by 
Microsoft's community initiatives.  Through its "Partners in 
Learning" program, for example, Microsoft has provided IT 
training to eight thousand Bahraini teachers - 80 percent of 
the teaching population.  Mteirek acknowledged receiving 
strong support from the GOB on software IPR protection.  It 
remains a problem, but Mteirek noted that independent 
industry statistics place Bahrain's software piracy rates 
among the lowest in the region. 
 
¶12. (C) A/S Bohigian's meeting with Microsoft took place 
during the company's first day in its new offices.  Pointing 
to still unpacked boxes, his hosts explained that their new, 
larger office space was needed to accommodate the relocation 
of its MENA region headquarters from Turkey to Bahrain. 
Bayoumi said Microsoft had selected Bahrain for its favorable 
investment climate and regionally competitive cost of living. 
 
¶13. (C) A/S Bohigian told senior investment bankers 
representing Citigroup, Arcapita, Investcorp and Kuwait 
Finance House Bahrain (KFH-Bahrain) that the $12 trillion 
U.S. economy represented a dynamic and welcoming destination 
for ongoing FDI.  The bankers reported gnerally strong 
interest on the part of their comanies in pursuing bilateral 
investment opportunites.  Arcapita, Investcorp and 
KFH-Bahrain eachhold a number of U.S. investments and are 
open t considering more.  KFH-Bahrain Project Developmen 
Manager Osama Al Khajah said Second Deputy Chairman Waleed 
Rashdan had traveled to Colorado October 22 at the invitation 
of Bahraini Ambassador Nasser Belooshi to study renewable 
energy-related joint venture opportunities. 
 
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MANAMA 00001956  003 OF 003 
 
 
COMMENT 
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¶14. (C) A/S Bohigian's visit to Bahrain showcased positive 
U.S.-Bahraini relations.  Meetings highlighted the eagerness 
of GOB officials to enhance the Bahraini investment climate 
and support the success of the FTA.  However, the need to 
respond to widespread Bahraini uncertainty over how to 
capitalize on the benefits of the FTA persists.  A range of 
U.S. officials, including A/S Bohigian and the Ambassador 
have explained that, while the FTA opens doors, it is up to 
the private sector to walk through them.  While some local 
initiatives, including the AmCham, the MEPI-funded 
Entreprenuership Center, and the Embassy's own outreach 
efforts, are promoting awareness and understanding of the 
FTA, the Bahraini side has been slow off the mark.  The plan 
to send a trade and investment mission to the U.S. in early 
2007 is an encouraging sign.  We will continue to push the 
Bahrainis to do more.  End comment. 
 
 
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Visit Embassy Manama's Classified Website: 
http://www.state.sgov.gov/p/nea/manama/ 
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MONROE