US embassy cable - 05ABUDHABI834

C O N F I D E N T I A L SECTION 01 OF 03 ABU DHABI 000834 
 
SIPDIS 
 
STATE FOR NEA 
NSC FOR NEA STAFF 
 
E.O. 12958: DECL: 11/19/2008 
TAGS: EFIN, ECON, EAID, EINV, PREL, KPAL, IS, TC 
SUBJECT: EMIRATI BUSINESSMAN LOOKING TO INVEST IN WEST BANK 
AND GAZA 
 
 
Classified By: Ambassador Michele J. Sison for reasons 1.4 
(b & d). 
 
1. (C) Summary: Mohammed Al-Abbar, Chairman of Emaar, Dubai's 
largest publicly-traded real estate development company, 
called on DCM and Econ Chief to discuss his February 18 
meetings with Palestinian and Israeli leaders regarding his 
development proposals for the Gaza settlements to be 
evacuated by Israel.  Al-Abbar said that he could easily 
raise USD 100 million in "seed money" for this initial 
investment and that his goal was to "help the Palestinian 
people."  He denied press reports that he had offered the 
Israeli government USD 56 million to buy the 21 settlements 
that Israel proposes to evacuate, although he said that he 
would be happy to buy the settlements.  He is working with 
the U.S. firm Parsons to develop investment plans.  Although 
he stated that he had consulted with Dubai Crown Prince 
Sheikh Mohammed bin Rashid Al-Maktoum (MbR), before starting 
this process, apparently neither he nor MbR had consulted 
with the Abu Dhabi leadership, which has expressed concerns 
about the media publicity this proposal has already 
generated.  While we intend to raise this matter with UAE 
Minister of Information Sheikh Abdullah bin Zayed (AbZ), our 
assessment is that the UAEG would need a direct approach from 
the Palestinians before agreeing to this or any other similar 
investment proposals.  End Summary. 
 
2. (C) On February 20, Dubai developer, Chairman of Emaar 
Properties, and Director General of Dubai Department of 
Economic Development, Mohammed Al-Abbar called on DCM to 
discuss his February 18 meetings with the Israeli and 
Palestinian leadership about his proposal to develop the Gaza 
settlement sites to be evacuated by Israel and to ask for USG 
support for encouraging this and other Arab investment in the 
Palestinian territories.  He said that he had been working 
with longstanding "Jewish friends" in New York and with 
Labor-Meimad member of the Knesset and former Minister of 
Transportation Ephraim Sneh on ideas for developing 
investment opportunities in the West Bank and Gaza.  He added 
that he had engaged the U.S. engineering firm Parsons to 
conduct a feasibility study for the Gaza settlements. 
Al-Abbar explained that he wanted to set up an investment 
company that would be run as a trust for the Palestinian 
people and that he could easily raise USD 100 million in 
"seed money."  (Note: Emaar is Dubai's largest publicly 
traded real estate development company and is responsible for 
projects such as the multi-billion dollar Dubai Marina.) 
 
3. (C) Al-Abbar told DCM that he had visited Israeli 
industrial parks and would be interested in duplicating them 
in the Palestinian territories.  He added that he had also 
visited some of the Israeli settlements and would be 
interested in using the existing infrastructure to support 
new housing and industrial development.  He denied news 
reports that claimed he had offered USD 56 million to buy the 
settlements, saying that he had not raised the subject of 
money in his meetings. 
 
4. (C) Al-Abbar emphasized that his goal was to help the 
Palestinian people.  He explained that "we Arabs" talk 
expansively about the Palestinian cause, but do little to 
help the Palestinians tangibly.  Without job opportunities 
for the Palestinians provided by trade and investment, the 
Palestinians would grow to resent the richer Arab states and 
raise "the terrorists of the future."  Investment in the 
Palestinians, he said, was not only the right and moral 
action, but it made sense from a practical policy standpoint. 
 
5. (C) Al-Abbar said that Palestinian Authority President 
Mahmoud Abbas and Prime Minister Ahmed Quraya and Israeli 
Prime Minister Sharon and Deputy Prime Minister Peres had all 
expressed support for his Gaza investment plans.  He planned 
to use the existing infrastructure in the Israeli 
settlements, but not necessarily the existing houses.   He 
explained that Sharon and his people had told him that 
"official Israeli policy" was to demolish the homes, but that 
the Israelis were open to working with a respectable 3rd 
party (i.e. him) about preserving the infrastructure. 
According to Al-Abbar, Sharon added that Emaar could work 
under World Bank supervision to make sure that the 
development could work to the benefit of all of the 
Palestinians.  Al-Abbar stressed that he was most interested 
in preserving the infrastructure of the settlements rather 
than in preserving the homes, noting that he would need to 
increase housing density in the settlements by building 
apartment blocks in any case.  He cited greenhouses as an 
example of the type of infrastructure that he wanted to 
preserve, noting that they could potentially employ 100,000 
Palestinians.  He added that he was interested in developing 
affordable housing, industrial parks and tourism in the 
region, noting that "the coastline in Gaza is gorgeous." 
 
6. (C) Al-Abbar stressed that he had consulted with Dubai 
Crown Prince Sheikh Mohammed bin Rashid Al-Maktoum (MbR) 
before beginning this process and that MbR had given him a 
green light.  In fact, he said, MbR had praised his proposal 
at a recent majlis (community meeting), encouraging others to 
invest in Palestine.  However, Al-Abbar said that the 
unwelcome media coverage (al-Jazeera and BBC) surrounding his 
recent meetings in Israel had raised concerns among the Abu 
Dhabi leadership.  He explained that the Palestinians had 
initially publicized his visit, and then PM Sharon's staff 
had leaked the story of his meeting with Sharon.  Neither of 
these presented an insurmountable problem, he said.  The 
Palestinian publicity made sense and he could deny the Sharon 
meeting if necessary.  However, he felt he also needed to 
meet with DPM Peres and this is where the situation became 
complicated.  Al-Abbar explained that he had considered not 
meeting with Peres, knowing that Peres was a "headline 
grabber."  He finally decided that he would meet with Peres, 
but would make every effort to avoid the press.  He went to 
Peres' office and saw no press outside the office.  However, 
when he entered Peres' office, he found Peres with the 
photographers waiting in his office to capture the meeting. 
Al-Abbar said that after meeting Peres he called MbR to 
explain that he had been "caught on camera." 
 
7. (C) After seeing what the media was putting out about his 
visit, Al-Abbar decided he would issue a press release 
explaining that Emaar would be establishing an office in 
Palestine, under the "instructions" of MbR, "to stroke MbR's 
ego."  Unfortunately, he noted, MbR had called him, "sounding 
uncomfortable" and instructed him not/not to issue any press 
release.  MbR told him that Abu Dhabi Crown Prince Sheikh 
Mohammed bin Zayed Al-Nahyan (MbZ) had expressed concern 
about the potential backlash of any more publicity.  Al-Abbar 
speculated that MbR had decided to back away from his public 
support for this project in order not to offend "the money 
man" in Abu Dhabi.  Calling MbZ "crazy about security" he 
said that MbZ was concerned that the appearance of doing 
business with Israel at this time could expose the UAE to a 
terrorist attack.  Al-Abbar said he had also received a 
somewhat agitated phone call from UAE Minister of Information 
Abdullah bin Zayed (AbZ) expressing concern about the media 
exposure and Al-Abbar,s plan send out a press release 
without coordinating it with the UAEG.  Al-Abbar added that 
Sheikh Abdullah bin Zayed planned to visit the Gaza Strip on 
March 3 and suggested that he may also have wanted to avoid 
being upstaged by an Emaar announcement.  These conversations 
dissuaded Al-Abbar from putting out a statement. 
 
8. (C) DCM encouraged Al-Abbar to discuss his plan with 
Sheikh Abdullah, noting that perhaps he and AbZ could 
formulate a way to package this investment proposal to 
address UAEG concerns.  For example, perhaps the UAEG and 
Palestinian Authority could consider a statement and/or 
mechanism for promoting Arab investment in the Palestinian 
territories.  This would allow the UAEG to claim "ownership" 
or credit for promoting investment that helped the 
Palestinans and would allow Al-Abbar to pursue his project. 
Al-Abbar said that he would discuss this with Sheikh Abdullah. 
 
9. (C) Comment:  Al-Abbar was once a part of MbR's inner 
circle -- a prominent technocrat of equal ranking with rivals 
Mohammed Al-Gergawi of the Executive Office and Sultan bin 
Sulayim of Nakheel and Dubai Ports, Customs and Free Zone 
Corporation. In recent years his star has fallen, and unlike 
his rivals he is now never present in MbR's meetings with 
foreign officials.  While his company Emaar is a huge player 
in the booming Dubai real estate scene, Al-Abbar himself is 
viewed locally as being somewhat shaky and erratic in his 
judgments.  His deep admiration for, and frequent contacts 
with, Israel make him something of an anomaly on the local 
scene; there have been some suggestions that he plays this up 
with USG contacts as a hedge against a possible further 
decline in his standing with MbR,s inner circle. 
 
10. (C) Comment continued: In his meeting with the DCM, 
Al-Abbar was clearly concerned that the publicity surrounding 
his trip and meeting with Sharon had left him exposed, and he 
was looking for cover.  He told the DCM that he had raised 
his concerns by phone with NEA PDAS Cheney, who had steered 
him to the Embassy.  As the lead developer of Dubai,s real 
estate boom, Emaar has the financial and technical ability to 
develop housing and economic infrastructure in the Gaza 
settlements and the potential to bring along other investors. 
 But there is a good possibility that such a high-profile 
initiative by this particular individual could prove to be 
too much for the UAEG to stomach at this juncture.  Al-Abbar 
has provoked the ire of the UAE leadership with his 
publicized meetings with the Israeli leadership.  In doing 
so, he wandered into the extremely contentious issue of 
compensating the Israelis for settlements considered to be 
illegal. 
 
11. (C) Comment continued: Meanwhile, a February 21 editorial 
in the semi-official Al-Ittihad newspaper accused Al-Abbar of 
running his own foreign policy and said this was 
unacceptable.  Even the progressive and open-minded Minister 
of Planning and Economy, Sheikha Lubna Al-Qassimi, was 
skeptical about its prospects, telling CG Dubai that she 
doubted very seriously that Al-Abbar's initiative had been 
coordinated with the UAEG, and predicting that "if he is 
planning on using Emaar funds for this, there will be a lot 
of anger from Emaar stock holders."  With the predilection of 
Abu Dhabi,s ruling family to fly under the radar screen on 
all matters having to do with Israel, we expect that Abu 
Dhabi would want some cover before allowing such a high 
profile investment to proceed. 
 
12. (C) Comment continued: Given the close ties between 
Palestinian President Abu Mazin and Abu Dhabi's ruling 
family, Department may want to consider an approach to the PA 
about this project in particular, and about promoting Arab 
investment in general.  While we intend to raise this matter 
with Sheikh Abdullah, our assessment is that the UAEG would 
need a direct approach from the Palestinians before agreeing 
to support this or other investment proposals.  End Comment. 
SISON