US embassy cable - 04ABUDHABI2171

C O N F I D E N T I A L SECTION 01 OF 02 ABU DHABI 002171 
 
SIPDIS 
 
DEPT FOR NEA/RA, NEA/ARP, INR/EC, EB/IEP, EB/CBA 
USDOE FOR INT'L AFFAIRS  OBURN, ALSO CALIENDO 
USDOC FOR 1000/OC/ 
USDOC FOR 4520/ITA/IEP/ONE 
USDOC FOR 4530/ITA/MAC/ONE/DGUGLIELMI 
4500/ITA/MAC/DAS/WILLIAMSON 
3131/CS/OIO/ANESA 
 
E.O. 12958: DECL 06/30/09 
TAGS: ECON, PGOV, PREL, TC 
SUBJECT: UAE: TALK ABOUT TOWN 
 
REF: ABU DHABI 1016 
 
1. (U) Classified by Charge d'Affaires, a.i. Richard A. 
Albright, for reasons 1.5 (B) and (D). 
 
2. (U) The "Talk About Town" series by the U.S. Mission in 
the UAE -- Embassy Abu Dhabi and Consulate General Dubai -- 
is provided on a periodic basis, and intended to report on 
local business atmospherics and commercial developments in 
the UAE.  Although uncorroborated by UAE officialdom and 
anecdotal in nature, the cables provide Washington 
audiences with the information we hear frequently in the 
majlises and living rooms throughout the UAE. 
 
----------------------- 
A Palace Fit for Kings 
----------------------- 
 
3. (SBU) Local sources confirmed with Econoff that the name 
of the government-owned Bani Yas Palace, currently under 
construction along the Corniche in Abu Dhabi, has been 
changed to the "Emirates Palace" to portray the diverse 
tribal backgrounds of the Emirates. Although the Bani Yas 
is the most prominent tribe in Abu Dhabi (by virtue of its 
most famous tribal son, President Zayed), it does not 
encompass the heritage of all nationals. The extravagant 
Emirates Palace, costing $1.2 billion to build, will serve 
as a seven star hotel and convention center. It is being 
erected especially to host the GCC Summit that will be held 
in Abu Dhabi in December. On a related note, rumor has it 
that Abu Dhabi Crown Prince Shaykh Khalifa ordered the 
removal of two massive roundabouts leading to the Emirates 
Palace (including the local-favorite "Falcon Roundabout" in 
front of the Intercontinental Hotel) to create a clear line 
of sight as one approaches the Palace. Other sources claim 
that the roundabouts are in actuality being removed for 
safety reasons. 
 
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Dangerous Liaisons 
------------------- 
 
4. (U) UAE English-language newspaper Gulf News reported 
that the UAEG officially denied stories by Israeli media 
claiming extensive talks with Israel were underway about 
opening a liaison office in Abu Dhabi. Israeli army radio 
and the Israeli Haaretz newspaper had reported that 
negotiations regarding the liaison office were already at 
an advanced stage and lawyers were now concentrating on 
issues such as security and location. However, UAE Defense 
Minister and Dubai Crown Prince Shaykh Mohammed bin Rashid 
Al Maktoum refuted the allegation as baseless, stating to 
the press June 26 that "the UAE has no intention nor a plan 
to normalize ties with Israel until the Palestinian issue 
is totally resolved in a just and comprehensive way, which 
will return to Arabs all their rights." Gulf News reported 
that another government source dismissed the rumor as 
"Israeli propaganda," claiming "Israel is trying to gain 
some assets for the so-called Gaza separation plan." 
 
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More Shopping? 
--------------- 
 
5.  (U) Local business people claim that Shaykha Fatima has 
ordered construction of yet another mall in Abu Dhabi, to 
be located near the Intercontinental Hotel. The mall will 
compete with the existing Abu Dhabi and Marina Malls, as 
well as the upcoming Khalidiya Mall, and will also include 
residential living space. Adding to this shopping 
extravaganza, Marina Mall will also be expanding its 
capacity by 40 percent to include an ice-skating rink and a 
tower-top restaurant. According to a marketing 
representative at Marina Mall, the mall construction is 
part of an initiative by the Tourism Board to lure tourists 
to Abu Dhabi, who would otherwise go to Dubai. 
 
------------------------------------ 
Property for Sale, Laundry Included 
------------------------------------ 
 
6.  (C) In a recent meeting with Dubai PolEconoff, MENA 
Division Risk Manager at Citigroup Raj Dvivedi (please 
protect), commented on Dubai's planned offshore banking 
center, the Dubai International Financial Center (DIFC), on 
money-laundering, and on the property market.  First, 
Dvivedi said Citi would probably set up shop in the DIFC, 
moving 60 to 80 back office jobs from Bahrain to the DIFC. 
Separately, Divendi said that he believed the "number one 
risk in Dubai is money-laundering and property." Without 
elaborating further, he added that there is a lot of 
speculation in the property market, with many snapping up 
multiple properties solely with the aim of "flipping" them 
for a quick profit. Although Divendi's comments are 
nebulous at best, many of our contacts note that Dubai is 
over-building, and high property prices are not necessarily 
indicative of genuine demand. Many here (including the 
UAEG) recognize the emerging property market in Dubai as a 
potential new vehicle for money laundering. 
 
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Begging: A Regional Profession 
------------------------------- 
 
7.  (U) According to press, UAE authorities are attempting 
to crack down on a band of roughly 100 beggars that are 
exploiting the sympathies of UAE residents. The beggars, 
the majority of whom are Saudi and Omani nationals, have 
taken permanent refuge in the UAE and claim to be 
supporting families back home. Although begging is a banned 
practice in the UAE, members of the group have demonstrated 
no intention of halting their profitable operations. The 
men's GCC nationality allows them to easily evade arrest or 
shift location whenever questioned by UAE police for their 
suspicious behavior, which includes taking refuge in 
mosques and emerging during evenings to begin their begging 
escapades. When asked why they have chosen the UAE as their 
final destination, a Saudi member of the band responded 
that it is due to the generosity of UAE people; donations 
to the group are constant and plentiful. The phenomenon of 
targeting generous UAE residents is not a new one. In 
Ramadan, swoons of beggars from Sudan, Oman, and 
surrounding countries flock to the UAE, eager to benefit 
from the increased level of alms giving during the holy 
month of fasting. 
 
8.  (U) This cable has been coordinated with ConGen Dubai. 
 
Albright