US embassy cable - 05ABUDHABI2946

S E C R E T SECTION 01 OF 03 ABU DHABI 002946 
 
SIPDIS 
 
E.O. 12958: DECL: 06/30/2015 
TAGS: PREL, PGOV, ETRD, KMPI, KPAL, SA, WE, GZ, TC 
SUBJECT: PDAS CHENEY CONSULTS WITH SHEIKH HAMDAN ON KSA, 
 
REFORM, AND PALESTINIAN ASSISTANCE 
 
Classified By: AMBASSADOR MICHELE J. SISON, REASONS 1.4 (B) AND (D). 
 
1. (S) Summary: NEA Principal Deputy Assistant Secretary 
Cheney consulted with Deputy Prime Minister/Minister of State 
for Foreign Affairs Sheikh Hamdan bin Zayed (HbZ) on June 26 
on debt relief for Iraq, Saudi Arabia, political reform, 
assistance for the Palestinians, and free trade.  With 
respect to Saudi Arabia, HbZ said there was considerable 
tension over their common border and depicted the Saudis as 
bullies.  He told Cheney that the UAE leadership was 
committed to political reform, but would need time to 
increase public awareness about the coming changes.  Cheney 
said the U.S. understood that each country would move at its 
own pace, but stressed the importance of moving.  HbZ and 
Cheney exchanged views on ways to respond to Palestinian 
needs.  HbZ noted the experiences gained by the UAE in 
constructing housing for Palestinians in Gaza.  Cheney said 
she would suggest to Quartet Special Envoy for Gaza 
Disengagement Wolfensohn that he meet with UAE officials to 
learn from their experiences in providing humanitarian 
assistance in the West Bank and Gaza.  End Summary. 
 
2. (SBU) On June 26, HbZ met with NEA PDAS Cheney over lunch 
and reviewed regional issues and discussed progress on 
political reform in the UAE.  HbZ, who had sat in on Cheney's 
meeting with President Khalifa earlier in the day, was 
accompanied by his office director, Sultan Al Romeithi; Labor 
Minister Al Kaabi; MFA Under Secretary Abdullah Rashid Al 
Noaimi; MFA Assistant Under Secretary for Political Affairs 
Tariq Al Haidan; UAE Ambassador to Washington, Al Asri Al 
Dhahri; American Affairs Desk Officer Rowda Al Otaiba; and 
his sons Mohammed and Zayed.  PDAS Cheney was accompanied by 
the Ambassador; PAO and Pol Chief (notetaker). 
 
IRAQI DEBT REDUCTION 
-------------------- 
 
3. (C) After lunch, HbZ and Cheney moved to another parlor 
with a smaller group to discuss Iraq debt reduction and UAE 
relations with Saudi Arabia.  Cheney asked about the UAE's 
position on Iraq debt reduction and noted UAE silence at the 
International Conference on Iraq in Brussels. Despite the 
UAEG having committed to former Secretary Baker that it would 
write off nearly all of Iraq's debt and having given 
assurances that it would proceed on terms no less generous 
than those of the Paris Club, HbZ said that the GCC still 
needed to establish a common policy on Iraq debt.  In the 
absence of a unified GCC position, he could not say whether 
they would forgive 50 percent or 90 percent.  He underscored 
his point saying that it is unacceptable to us to take 
instruction from the U.S. or anyone else.  Hamdan said it was 
"in the interest of Iraq" that the GCC help them with debt 
reduction.  Cheney asked when he expected the GCC would adopt 
a common position.  HbZ replied that the GCC foreign 
ministers are scheduled to meet in September, and the GCC 
heads of state in December.  He suggested that it would be 
helpful for the USG to send a signal to GCC leaders before 
the September meeting.  Cheney said the USG had been--and 
would continue to send this message.  She stated that that it 
would be helpful to have a decision before the September GCC 
foreign ministers meeting. 
 
UAE/SAUDI BORDER DISPUTE 
------------------------ 
 
4. (S) HbZ raised the highly sensitive UAE-Saudi border 
dispute, telling Cheney that the Saudis wanted to discuss 
joint sovereignty over their common maritime border.  HbZ was 
emphatic that the UAE would not accept joint sovereignty "no 
matter what the consequences."  He said that the Saudis had 
"enough problems" without stirring up trouble over the border 
issue.  The Saudis had been obstructionists on a number of 
issues of importance to other GCC states, including the 
Qatar-UAE causeway, the Qatar-UAE gas pipeline, and the 
Qatar-Bahrain bridge, Hamdan complained.  The Saudis were 
unhappy with the causeway project because they do not like 
the fact that it bypasses them.  HbZ predicted that the 
Saudis' efforts to block commercial cooperation, economic 
development, and health issues would doom the GCC.  The UAEG 
has tried since 1975 to share its concerns about the border 
but the Saudis have not listened, HbZ said.  Hamdan said he 
would travel to Riyadh in July to meet again with Saudi 
Interior Minister Prince Nayef to follow up on Nayef's June 
19 visit to Abu Dhabi, but he was not optimistic about those 
talks.  "It might be a half-day and then I return," he said. 
One of the critical issues is the border dispute, including 
that of the Zararah oilfield.  HbZ underscored that he was 
raising the border issues with us to keep us abreast of the 
issue and not as a request for action yet. 
 
5. (SBU) Comment: Under terms of the 1974 border treaty 
between Saudi Arabi and the UAE, the UAE gave up its claim to 
the Zararah oil field (in exchange, Saudi Arabia dropped its 
claims to the Buraimi oasis region, located near the eastern 
edge of UAE territory and recognized the UAE).  The Zararah 
field (known in Saudi Arabia as the Shaybah oilfield) spans 
the UAE-Saudi border and contains 15 billion barrels of 
proven oil reserves and 25 trillion cubic feet of untapped 
gas reserves.  Although 10 to 20 percent of the oil reserve 
lies within UAE territory, the 1974 agreement specified that 
oil finds along a common border would go to the country where 
the largest part of the field was located, thus giving Saudi 
Arabia economic rights to the entire reservoir.  Earlier this 
year, tension emerged between the UAE and Saudi Arabia over a 
decision by the UAE and Qatar to build a causeway connecting 
the two countries over the Khor Al Odeid waters.  Under the 
1974 agreement, Abu Dhabi had surrendered this strip of land 
that linked it to Qatar.  Abu Dhabi insists it gave up the 
onshore stretch but not the territorial waters. 
 
6. (U) Comment continued:  In Sheikh Zayed's waning months 
and since his November 2004 death, UAE officials have 
resurfaced long simmering criticism of the 1974 treaty signed 
by Sheikh Zayed under duress to obtain Saudi recognition. 
The UAE feels it negotiated the 1974 treaty from a position 
of weakness.  The 1974 agreement was the price the UAE 
(established in 1971) had to pay to obtain Saudi recognition 
and a measure of security.  The UAE proposed amending to the 
treaty to allow the UAE to develop Zararah up to 10 
kilometers inside the Saudi border.  We understand that the 
Saudis may be proposing to split cross-border hydrocarbons 
evenly.  End Comment. 
 
REFORM IN THE UAE 
----------------- 
 
7. (C) During their lunch meeting, PDAS Cheney asked HbZ for 
his views about expanding democracy in the UAE.  HbZ said 
that the UAE was "firmly committed" to move toward elections 
at the local, consultative level, as well as at the federal 
level.  However, he emphasized that this would be part of a 
"common strategy to move together" as one country so as to 
avoid each of the seven emirates proceeding separately.  HbZ 
said that Emiratis currently have an open majlis system that 
allows them to visit their sheikhs and leaders to discuss 
their concerns with them.  The leadership is committed to 
create a more formal participatory form of government that 
would include elections, he said.  "We are working on it," he 
assured Cheney.  HbZ said that the matter was being studied 
but that it would take time before the government would 
introduce political reforms.  He did not specify a timeframe. 
 
8. (C) Commenting on democratization in other Gulf countries, 
HbZ gave a positive assessment of Oman, Bahrain, and Qatar, 
but expressed concern about Kuwait because of the strong 
influence of fundamentalists who "burden" the government and 
"impede" the development of Kuwaiti society.  As for Saudi 
Arabia, HbZ said he was concerned that fundamentalists could 
control election outcomes, which could have disturbing 
consequences in the region. 
 
9. (C) HbZ told Cheney that he had had a favorable reaction 
to the Secretary's recent travel to the Middle East.  He 
applauded the Secretary's efforts to explain what the U.S. 
was doing to improve its image in the world.  He said he 
appreciated the Secretary,s speech in Cairo.  HbZ said the 
people of the Middle East wanted to realize their aspirations 
and dreams, but their governments needed to proceed 
judiciously.  There cannot be a one-size-fits-all approach to 
reform because each society is unique. 
 
10. (C) HbZ said he believed that governments still had a 
long way to go to increase awareness of public issues as a 
prelude to democratic changes.  PDAS Cheney underscored a 
point the Secretary made in her Cairo speech that change 
should not be, and cannot be, imposed on societies from 
outside.  Change will come at a pace "that makes sense for 
the individual countries," Cheney said. 
 
ASSISTANCE FOR THE PALESTINIANS 
------------------------------- 
 
11. (C) HbZ and Cheney also discussed the UAE's bilateral 
assistance to the Palestinian Authority.  HbZ, who presides 
over the UAE Red Crescent Society and its program of 
humanitarian support for the Palestinian people, noted the 
UAE,s donations of general care and specialized care 
hospitals, medicine, and salaries for health care workers. 
He said that the UAE prefers to work directly with the 
Palestinian Authority and the Israeli government, rather than 
through other NGOs.  Cheney asked HbZ if the UAE had 
experienced difficulties convincing Palestinians to move into 
the houses that the UAE had built.  HbZ said the UAE had 
encountered problems with Palestinians not wanting to move 
far away from their communities in Rafah, but that the 
problem had been solved elsewhere. 
 
12. (C) Cheney offered to brief Quartet Special Envoy for 
Gaza Disengagement Wolfensohn about the UAE's positive 
experience in providing assistance to the Palestinians in 
Gaza and recommend that he meet with the UAE's leadership to 
consult further.  HbZ liked the idea and said Wolfensohn 
should meet with MFA, Red Crescent, and Abu Dhabi Development 
Fund officials. 
 
FREE TRADE AGREEMENT 
-------------------- 
 
13. (C) At the lunch, Cheney briefed HbZ on Middle East Free 
Trade Area (MEFTA) progress.  She said that it was important 
for the U.S. to open up markets, which would have a positive 
impact on economic development.  The U.S. wants to encourage 
intraregional trade and bilateral trade. Cheney noted that 
the U.S. bilateral trade agreements were more advantageous to 
trading partners than European trade agreements because the 
Europeans did not give full access to their markets when the 
agreements were concluded.  HbZ acknowledged that the Gulf 
Cooperation Council has been waiting 17 years for a trade 
agreement with the EU without result because the Saudis have 
not been helpful.  HbZ asked if Cheney thought the GCC 
should, as the Saudis have been advocating, move only as a 
bloc.  Cheney said no.  She explained that the USG would 
continue to negotiate individual FTAs and encourage 
neighboring countries to "dock" on to each other's agreements 
in order to facilitate intraregional trade. 
 
14. (U) This message was cleared by PDAS Cheney. 
SISON