TAKING STOCK OF UAE ASSISTANCE TO IRAQ

C O N F I D E N T I A L SECTION 01 OF 03 ABU DHABI 003476

SIPDIS

STATE FOR NEA/ARP, NEA/RA, NEA/NGA, IO/UNP, AND EB FOR
JOHN FINN

E.O. 12958: DECL 07/27/03
TAGS: EAID PREL PGOV PHUM IZ TC
SUBJECT: TAKING STOCK OF UAE ASSISTANCE TO IRAQ

REFS: A) STATE 214593
B) ABU DHABI 3423
C) ABU DHABI 2877


1. (U) Classified by Ambassador Marcelle M. Wahba,
for reasons 1.5 (b) and (d).


2. (U) Summary. UAE assistance to Iraq -- both
pledged and delivered -- has been significant. UAE
Chief of Staff Shaykh Muhammad bin Zayid Al-Nahyan
(MbZ) confirmed to the Ambassador in July that total
UAE assistance to Iraq has exceeded $50 million, and
he expects this figure to rise to USD $80 million by
the end of 2003 (see ref B). This figure obviously
doesn't include the considerable private donations to
Iraq provided by senior royal family members --
numbers for these individual contributions usually are
not made public. Post is aware, however, that UAE
First Lady Shaykha Fatima donated USD $2 million to
the UAE Red Crescent Authority in April for the Iraqi
people.


3. (U) Summary continued. The UAE Red Crescent
Authority (RCA) has undertaken robust humanitarian
operations within Iraq, as has the Shaykh Mohammed Bin
Rashid Al-Maktoum Charity and Humanitarian Foundation
(whose patron is the UAE Defense Minister and Dubai
Crown Prince) in Dubai. These two quasi-governmental
charities currently serve as the umbrella
organizations for the rest of the UAE's NGO's relief
efforts in Iraq, and have largely coordinated their
activities in Iraq with the Mission. Itemizations of
the UAE's contributions to Iraq are keyed to ref A.
End summary.

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UAE Humanitarian Assistance
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4. (U) The UAE Red Crescent Authority (RCA) Secretary
General Sana'a Al-Kitbi recently provided Post with a
running tally of the humanitarian supplies and
services provided to the people of Iraq since November
2002 (see ref C). Among the many operations
undertaken by the RCA in Iraq, the organization spent
USD $826,000 in pre-war stockpiling of food and
medical supplies to villages and hospitals throughout
Iraq, USD $5.5 million in emergency humanitarian aid
(more than 1700 tons of medical equipment, food
parcels and water tankers) to Iraq during and
immediately after the war, and donated a number of
heavy trucks to aid other NGOs in Iraq with the
distribution of their assistance.


5. (U) The RCA began an "air bridge" of humanitarian
flights to Baghdad, Basrah, and Mosul in April to
support Iraqi hospitals and dispatch about 255 tons of
medicines, medical items, children's nutrients and
other necessities. As of June, the RCA had sponsored
17 such flights at a cost of more than USD $1.6
million. Post receives notification from the RAMCC
that these RCA flights to Iraq continue on an almost
daily basis.


6. (U) The RCA has not yet estimated the total cost
of evacuating in May nearly 40 wounded children and
their parents to the UAE for medical treatment. The
Humanitarian Operations Center (HOC) in Kuwait asked
the RCA to arrange for and cover all costs associated
with the special medical evacuation flights -- the
first of which was a presidential Amiri flight --
accommodations and food for the parents while in the
UAE, all related medical treatment and rehabilitation,
and a return trip home once the patients have
recovered.


7. (U) The RCA also provided emergency food and
shelter to hundreds of Iraqis who were stranded in
Dubai at the onset of the war in Iraq. The stranded
Iraqis remained in Dubai until the beginning of June,
at which time the RCA paid for the Iraqis to return to
Iraq overland via Jordan.

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UAE Reconstruction Activities In Iraq
--------------


8. (U) The RCA continues to contribute millions of
dollars to rebuild Iraq's infrastructure --
particularly Iraq's health and water and sanitation
sectors. The RCA built a water treatment plant with
200,000-gallon capacity in Basrah, and has begun
construction of three other water treatment plants
with 25,000-gallon capacity in the surrounding areas.
The UAE Red Crescent Authority continues to provide
20,000 gallons a day of potable water to the residents
of Basrah, according to press reports. The RCA also
donated a generator for the Saba Nissan water station
on the Tigris River that provides clean water to
approximately 1.5 million people.


9. (U) In May, the RCA began the complete renovation
and refurbishment of six hospitals in Iraq. A UAE
medical team headed this effort, and remains in Iraq
to manage the administration of the Shaykh Zayid
Hospital in Baghdad -- which the RCA rehabilitated in
April. The RCA's hospital rehabilitation program has
cost more than USD $12 million to date.

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UAE Aids Iraq's Economic Recovery
--------------


10. (C) The UAEG already has provided specific
proposals for participation in Iraq's economic
recovery. UAE officials committed in writing to
provide training to Iraqi Central Bank officials in
banking operations, banking supervision and
examination, and anti-money laundering detection and
investigation. Combating terrorist financing through
its formal and informal financial networks has been a
major goal of the UAEG since 2000, and an area in
which the UAEG has made tremendous strides. The UAE
was the first Arab country to become a member of the
elite Egmont Group of Financial Intelligence Units,
and could well serve as a model for Iraq's own
financial system. The UAEG also has offered to
provide training in trade financing to Iraqi bankers.


11. (C) The Abu Dhabi-based Arab Monetary Fund (AMF)
also has offered to help develop responsible fiscal
and monetary policy in Iraq, carve out a supervisory
role for the Iraq Central Bank, and help establish a
liberalized trade regime that would lead to Iraq's
eventual accession to the WTO. The AMF has expertise
in a broad range of economic topics, as well as a
formal agreement with the WTO to provide training on
trade-related issues to its Arab membership -- which
includes Iraq.


12. (C) UAE officials have indicated that they could
dispatch experts from the Abu Dhabi National Oil
Company (ADNOC) to assist in the near term
reconstruction of the Iraqi oil sector. Although the
UAE could assist the Iraqi Oil Ministry in oil
exploration, refining, processing, distribution and
management, Abu Dhabi realistically will be Baghdad's
competitor in this sector over the long-term.

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Frozen Iraqi Assets In The UAE
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13. (C) As usual, we have obtained exemplary
cooperation from the UAE Central Bank regarding the
freezing of assets related to the former Saddam regime
in the UAE. The UAEG confirmed in a May 6 conference
call of the informal contact group on Iraq
reconstruction that the UAE Central Bank is now
managing the day-to-day operations of the single
branch of Rafidain Bank in the UAE. Rafidain Bank in
the UAE has operated on a limited basis since the 1990
Iraqi invasion of Kuwait. According to official UAE
statistics, the bank maintains total assets of USD
$18.8 million, USD $17.3 million of which are frozen
in the United States and Germany. The Governor
recently told Econchief that, due to asset seizure in
the United States, the capital adequacy requirements
at the bank have dropped below legal limits and the
UAEG would like to close the branch -- but will check
with the USG before doing so.


14. (C) The UAE Central Bank Governor last week told
Econchief that UAE authorities had not located
significant assets related to the Saddam regime in the
UAE. The Bank had frozen a sum of money belonging to
Iraqi Airways since Desert Storm, but has not yet
transferred the assets to the Development Fund for
Iraq. The Central Bank is drafting a letter to
Treasury Secretary Snow concerning these accounts.

Wahba