VZCZCXRO9932
RR RUEHROV
DE RUEHDS #2737/01 2491424
ZNR UUUUU ZZH
R 061424Z SEP 07
FM AMEMBASSY ADDIS ABABA
TO RUEHC/SECSTATE WASHDC 7707
INFO RUCNIAD/IGAD COLLECTIVE
RUEAIIA/CIA WASHINGTON DC
RUEKDIA/DIA WASHINGTON DC
RHEHNSC/NSC WASHDC
RHMFISS/CJTF HOA
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS SECTION 01 OF 02 ADDIS ABABA 002737 
 
SIPDIS 
 
SIPDIS 
 
USAID/W FOR A/AID 
DCHA/AA WGARVELINK, LROGERS 
AFR/AA LPIERSON, KALMQUIST 
AFR/EA KNELSON 
 
E.O. 12958: N/A 
TAGS: ETRD ENRG EAGR EINV PGOV PINR BIOS ET
SUBJECT: SHEIK AL AMOUDI DISCUSSES BUSINESS AND POLITICAL CLIMATE 
 
SUMMARY: In a meeting September 4 with Ambassador Yamamoto, Sheik 
Mohammed Hussein Ali Al-Amoudi, chairman of MIDROC Ethiopia and the 
80th wealthiest person in the world, offered his insights on the 
business climate in Ethiopia, his current and future investments and 
his thoughts on how to work with the Government of Ethiopia (GOE). 
Among Al-Amoudi's planned investments are a railway linking 
Ethiopia, Djibouti and Southern Somalia, and, if Washington agrees, 
upgrading the port of Berbera in Somaliland.  END SUMMARY 
 
----------------------------- 
SHEIK AL-AMOUDI'S INVESTMENTS 
----------------------------- 
¶1. Sheik Mohammed Hussein Ali Al-Amoudi is Ethiopia's most prominent 
business leader.  Born in Ethiopia to an Ethiopian mother and Yemeni 
father, he moved to Saudi Arabia in 1963.  His holdings are vast and 
multinational, ranging from the two largest refineries in northern 
Europe to Sheraton Hotels in Addis Ababa, Uganda and Djibouti. 
According to Forbes Magazine in 2007, he is the 80th wealthiest 
person, worth USD 8 billion.  MIDROC Ethiopia, his Ethiopian holding 
company counts at least 11 sub companies and includes a gold mine, 
air charter business, agricultural enterprises and various 
manufacturing and construction companies. 
 
¶2. Saying that he needs to work with the major players to become a 
player in the petroleum sector, he discussed his joint ventures.  In 
Nigeria, he is working with Exxon and Esso, while in Angola he has 
partnered with ELF and Total.  Other investments he named are a 
refinery in Morocco, offshore wells in Cote d'Ivoire producing 70 
thousand barrels per day and extraction efforts in Botswana. 
 
------------------------------------ 
POTENTIAL TRANSPORTATION INVESTMENTS 
------------------------------------ 
 
¶3. In addition to his oil and gas investments, the Sheik detailed 
his interest in two transportation projects: a railway linking 
Djibouti, Ethiopia and Southern Sudan and developing the Port of 
Berbera in Somaliland. The current rail link between Djibouti and 
Ethiopia is in poor repair.  Al-Amoudi stated that the current 
governments of Djibouti and Ethiopia suffer from a "gap" that is 
preventing progress on the rail project.  Despite the gap, Al-Amoudi 
informed the Embassy a group of Kuwaiti investors is performing a 
feasibility study on a Djibouti-Ethiopia-Southern Sudan railway.  He 
stated that the project will need international investment from 
entities like the World Bank and IMF as well as additional GOE and 
Government of Djibouti cooperation before it can be implemented. 
Ambassador Yamamoto commented that the rail link would be a benefit 
for economic development in Ethiopia. 
 
¶4. Al-Amoudi also stated his interest in developing the Port of 
Berbera in Somaliland.  He said that he would not move on that 
project without a green light from the USG - arguing that political 
sensitivities with the U.S. are more important than this business 
deal.  He mentioned that Somali officials are sometimes difficult to 
predict, and said that he would be working in Somaliland for 
"political" purposes rather than business ends. 
 
--------------------- 
INVESTING IN ETHIOPIA 
--------------------- 
 
¶6. The Sheik stated that his Ethiopian businesses are lead more by 
his heart than by his head.  He has opened a garments factory in 
Tigray which he expects to soon produce 90,000 blue jeans annually 
and is planning a cold storage and packing facility at Bole Airport 
and a catering facility to serve airlines. 
 
----------------------------------- 
ON A QUEST FOR IMAGE TRANSFORMATION 
----------------------------------- 
¶7. Al-Amoudi spoke of the challenges he has faced in establishing 
his businesses in post-Communist Ethiopia.  He said that while the 
reaction of the public to the introduction of American products was 
positive, it took longer (five or six years) for the GOE to change 
its attitude from one of socialism to one of capitalism-led growth. 
While he noted the need for further change of economic policies, he 
dodged the question of what policies are most needed or have the 
greatest chance of being implemented in the near term. 
 
¶8. Al-Amoudi mentioned several times that in order for conditions in 
Ethiopia to change, the young people have to change.  He shared that 
his activities to celebrate the Ethiopian Millennium (NOTE: Due to 
 
ADDIS ABAB 00002737  002 OF 002 
 
 
different calendars, Ethiopia celebrates the year 2000 on September 
¶11. END NOTE) are focused on young people and on image 
transformation.  To that end, he has recruited American musicians 
the Black Eyed Peas, Janet Jackson, Beyonce Knowles and 50 Cent for 
concerts between September and January.  He is also in negotiation 
with HBO to provide live coverage of the events.  He stated that his 
contributions for the Millennium are not business-based, but rather 
part of his efforts to change Ethiopia's image on the world stage. 
 
----------------- 
ADVICE ON THE GOE 
----------------- 
¶9. The Sheik urged the Ambassador not to give up on efforts because 
of a perceived lack of attention from the GOE.  He stated that the 
GOE is listening and considering input even if there is no immediate 
response.  He further cautioned that Ethiopians have a tremendous 
sense of pride, and that any advice from outsiders needs to keep 
this in mind. 
 
¶9. COMMENT: The opportunity to hear first-hand from Ethiopia's most 
influential business leader offers insight into potential economic 
development in the country. Al-Amoudi is known to be a supporter of 
the current regime and is thought to face fewer barriers in his 
business activities than other investors.  Additionally, his advice 
on keeping the Ethiopian sense of pride in mind echoes the 
sentiments of other sources and Post's tactics in engaging the GoE, 
and amplifies the need to keep the Ethiopian psyche in mind when 
conducting negotiations on sensitive issues.  Post would appreciate 
Washington's views on MIDROC's potential refurbishment of the 
Berbera port to convey to the Sheik. END COMMENT 
 
YAMAMOTO