wikileaks ico  Home papers ico  Cables mirror and Afghan War Diary privacy policy Privacy
Identifier
Created
Classification
Origin
03ABUDHABI5390
2003-12-23 12:47:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Abu Dhabi
Cable title:  

2004 REPORT TO CONGRESS ON ALLIED CONTRIBUTIONS

Tags:  PREL MCAP MARR MASS TC 
pdf how-to read a cable
null
Diana T Fritz  03/20/2007 11:27:44 AM  From  DB/Inbox:  Search Results

Cable 
Text:                                                                      
                                                                           
      
UNCLASSIFIED

SIPDIS
TELEGRAM                                        December 23, 2003


To:       No Action Addressee                                    

Action:   Unknown                                                

From:     AMEMBASSY ABU DHABI (ABU DHABI 5390 - PRIORITY)        

TAGS:     PREL, MCAP, MARR, MASS                                 

Captions: None                                                   

Subject:  2004 REPORT TO CONGRESS ON ALLIED CONTRIBUTIONS        
            TO THE COMMON DEFENSE:  UAE SUBMISSION               

Ref:      None                                                   
_________________________________________________________________
UNCLAS        ABU DHABI 05390

SIPDIS
CXABU:
    ACTION: POL 
    INFO:   DAO P/M RSO AMB DCM ECON USLO PAO 
Laser1:
    INFO:   FCS PAO 

DISSEMINATION: POL
CHARGE: PROG

APPROVED: AMB:MMWAHBA
DRAFTED: POL:JFMAYBURY
CLEARED: A/DCM:HOLSIN-WINDECKER; USLO:KM; DAO:BK; ECON:OJ

VZCZCADI950
PP RUEHC RUEKJCS RUEKJCS RUEKJCS RUEKJCS RUEKJCS
RUEOBBA RHRMDAB RUEHZM RUCJACC RHEFDIA RUEKJCS RUEATRS RUEAIIA
RHEHNSC
DE RUEHAD #5390/01 3571247
ZNR UUUUU ZZH
P 231247Z DEC 03
FM AMEMBASSY ABU DHABI
TO RUEHC/SECSTATE WASHDC PRIORITY 2796
INFO RUEKJCS/SECDEF WASHINGTON DC//OSD/ISA/NP//
RUEKJCS/SECDEF WASHINGTON DC//OSD/ISA/NESA//
RUEKJCS/SECDEF WASHINGTON DC//OSD/ISA/AP//
RUEKJCS/SECDEF WASHINGTON DC//OSD/ISA/BTF//
RUEKJCS/SECDEF WASHINGTON DC//OSD/PA&E//
RUEOBBA/COMUSCENTAF SHAW AFB SC
RHRMDAB/COMUSNAVCENT
RUEHZM/GCC COLLECTIVE
RUCJACC/USCINCCENT MACDILL AFB FL
RHEFDIA/DIA WASHINGTON DC
RUEKJCS/CJCS NMCC WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEAIIA/CIA WASHINGTON DC
RHEHNSC/NSC WASHINGTON DC
						UNCLAS SECTION 01 OF 09 ABU DHABI 005390 

SIPDIS

STATE FOR PM/B AND NEA/ARP
DOD FOR OSD/PA&E AND OASD/ISA/NESA

SENSITIVE

E.O. 12958: N/A
TAGS: PREL MCAP MARR MASS TC
SUBJECT: 2004 REPORT TO CONGRESS ON ALLIED CONTRIBUTIONS
TO THE COMMON DEFENSE: UAE SUBMISSION

REF: STATE 305999

-----------------------------


1. (SBU) INTRODUCTION/SUMMARY


--------------------------



The UAE in 2003 continued its outstanding record as a
valuable strategic partner in the Global War on Terrorism
and in supporting key U.S. regional strategic policy goals.
Among the highlights of the UAE's contributions to the
common defense are:

-- Providing basing for USAF aerial refueling, intra-
theater lift, and Intelligence, Surveillance, and
Reconnaissance assets in support of Operation Enduring
Freedom (OEF), Operation Southern Watch (OSW), Operation
Iraqi Freedom (OIF), and Operation Horn of Africa (OHA);

-- Providing other logistical and non-combat support for
OEF, OSW, OIF, and OHA;

-- Providing strategic lift estimated at $5 million for a
Bulgarian infantry brigade deployed to Iraq as part of a
Polish-led multinational division;

-- Hosting U.S. Navy logistical operation in support of
the Fifth Fleet;

-- Hosting the U.S. sea services at Jebel Ali Port (Dubai)
and at Fujairah, with Jebel Ali being the premier U.S. Navy
liberty port in the world and the only one in the region
where a nuclear-powered aircraft carrier can be berthed
pierside;

-- Providing facilities and forces for direct action
outside the UAE in support of OEF;

-- Direct sharing in costs of U.S. deployments to the
amount estimated at approximately $93 million;

-- Indirect sharing of costs estimated at approximately
$173 million;

-- Maintaining an important defense sales relationship
with the USG;

-- Donating around $100 million to support humanitarian
assistance and reconstruction efforts in Iraq and
Afghanistan, including over $32 million provided through
the UAE Red Crescent Authority (RCA);

-- Providing assistance to the Palestinian people in the
Occupied Territories, including $5 million in assistance to
residents of the Gaza Strip in the first half of 2003 and
providing about 300,000 meals during the month of Ramadan;

-- Hosting numerous high-level military and civilian
delegations, including Defense Secretary Rumsfeld, former
USCENTCOM Commander General Franks, new USCENTCOM Commander
General Abizaid, Air Force Secretary Roche, Chief of Staff
of the Air Force General Jumper, and Vice Chief of Staff of
the Air Force Moseley, as well as the State Department's
Under Secretary for Arms Control and International Security
John Bolton, Assistant Secretary for Political-Military
Affairs Lincoln Bloomfield, and Assistant Secretary for
Near Eastern Affairs William Burns.



--------------------------




2. (SBU) GENERAL ASSESSMENT


--------------------------





A. TRENDS/DEVELOPMENTS IN ECONOMIC AND POLITICAL
FACTORS:

-- POLITICAL DEVELOPMENTS: Domestic political
circumstances in the UAE have changed little over the
past year. The UAEG's loose federal structure, under
the leadership of President Zayed bin Sultan Al-Nahyan,
remains stable and there are no internal or external
opposition groups. In December, President Shaykh Zayed
clarified the UAE succession by promoting his son Mohammed
bin Zayed as Abu Dhabi Deputy Crown Prince. Mohammed bin
Zayed remains Armed Forces Chief of Staff. Shaykh Zayed's
eldest son, current Abu Dhabi Crown Prince Shaykh Khalifa
bin Zayed, is expected to become the country's next
president when his father departs the scene. In October,
Shaykh Zayed promoted another of his sons, Hamdan bin
Zayed, as Deputy Prime Minister. Hamdan bin Zayed remains
the de facto Foreign Minister.

In regional and international affairs, the UAE
continued to demonstrate its unequivocal support for the
Global War on Terrorism. The UAE played a critical role in
assisting the continuing investigation into the 9/11
attacks and provided financial documents pertaining to the
movement of terrorist funds. The UAE Government
implemented a law to criminalize money laundering, to
include terrorist financing, in January 2002. To date, the
UAE Central Bank has frozen a total of $3.13 million in 18
bank accounts in the UAE since 9/11. The UAE implemented
the anti-terrorism financing regulations passed by the UN
Security Council. Cooperation across the board -- from the
financial realm through to military, security and
intelligence as been strong and sustained.
The UAE provided logistical support for non-combat
operations related to OEF and OIF. As part of OIF, the UAE
in late July provided strategic lift costing $5 million for
a Bulgarian infantry brigade that was being deployed to
Iraq as part of a Polish-led multinational division.
Additionally, the UAE provided on short notice its frigate
"Al Emarat" as a flagship of a GCC naval force in defense
of Kuwait. The UAE continued its generous humanitarian
assistance to the Afghan people and in October 2003, the
UAEG pledged $215 million in reconstruction assistance to
Iraq.

The UAE remains committed to cooperation with other GCC
States. In October, the UAE and Oman formally resolved a
long-standing border dispute. At an October 13 meeting,
the defense ministers of the GCC countries approved
recommendations from Gulf Arab chiefs of staff to boost the
5,000-strong Peninsula Shield force to 20,000 troops in


2004. The GCC members were scheduled to review this
decision at their annual summit in late December. The UAE
commitment to Peninsula Shield is one full mechanized
brigade, and that is expected to remain the same if and
when Peninsula Shield is increased. The UAE has continued
to back GCC policies on Iran and Iraq. The UAE permitted
the basing of USAF tankers in support of OSW, OEF, OIR, and
OHA. The UAE's economic and trade relations with Iran
continued to grow, but there was no change in political
relations, which remain strained. In April 2003, officials
from the UAE and Iran expressed their readiness to broaden
ties in cultural, political, economic and trade areas, but
there were no official visits by senior government leaders
during the year. The UAE's attention remains focused on
the contested Abu Musa and Tunb Islands, occupied by Iran
but claimed by both Iran and the UAE. The UAE continues to
take the lead within the GCC in expressing concern about
Iran's support for terrorism, its military build-up,
pursuit of weapons of mass destruction, and interference in
the internal affairs of other countries in the region. The
UAE publicly condemned terrorist attacks in Iraq, Saudi
Arabia, and Turkey, while offering a strong public show of
support for the Iraqi Governing Council and Iraq's interim
government. The UAE has provided assistance to the
Palestinian people in the Occupied Territories, including
$5 million in assistance to the residents of the Gaza Strip
in the first half of 2003. The UAE Red Crescent provided
humanitarian assistance in 95 countries in 2003.

ECONOMIC DEVELOPMENTS: The United Arab Emirates is a
confederation of seven emirates. Individual emirates
retain considerable control over legal and economic
matters, most significantly over ownership and
disposition of oil and other natural resources, and
resultant revenues. Oil production and revenues from
the sale of oil constitute the largest single component
of GDP, accounting in 2002 for 30 percent of GDP and
equaling roughly 50 percent of export and 90 percent of
government revenue. Rising or declining oil prices have
a direct effect on GDP statistics.

-- The great majority of the UAE's oil export income
comes from Abu Dhabi emirate, though Dubai and Sharjah
also produce and export a modest amount of oil and gas
products. The scarcity of oil and gas reserves in the
UAE's northern emirates has led to continued attempts at
economic diversification. The non-oil sector of the
UAE's economy actually accounts for more than twice the
oil sector's direct contribution to GDP and this has
helped insulate the country from the full effect of
fluctuating oil prices.

-- Traditionally, oil revenues, along with careful
management of investments, have helped the UAE avoid
some of the budgetary problems encountered by other GCC
states. The UAE has substantial foreign exchange
reserves and the government has no foreign debt.
Continued UAE consolidated budget deficits are financed
primarily by liquidating or withdrawing interest from
overseas assets. There are no figures available for the
amount of government assets held overseas, but many experts
believe the Government of Abu Dhabi maintains $200 billion
to $250 billion under the administration of the Abu Dhabi
Investment Authority. The UAEG continues to be reluctant
to accept IMF recommendations to reform and rationalize
fiscal policy through measures such as reduction of current
expenditures and subsidies or instituting taxation. The
UAE is, however, working with the IMF to improve the
quality of its statistics.

-- The Emirate of Abu Dhabi, which finances the UAE's
military expenditures, continues to build significant
infrastructure, particularly in the power and water
sector, where privatization/outsourcing efforts
continue. Several large-scale projects, including the
UAE Offsets Group's "Dolphin" project (to pipe Qatari
Gas to Abu Dhabi and Dubai) and massive greenfield
utility developments in Fujeirah and Shuweihat in Abu
Dhabi Emirate, are moving to execution.



B. TRENDS/DEVELOPMENTS IN AID, PEACEKEEPING OPERATIONS
AND HUMANITARIAN ASSISTANCE:

-- The UAEG provided generous assistance to Iraq, donating
around $100 million to support humanitarian assistance and
reconstruction efforts in Iraq, including over $32 million
provided through the UAE Red Crescent Authority in 2003.
The UAE also pledged $215 million to Iraqi reconstruction
(25% representing money already spent, and the rest for new
power generation projects. The UAE built a water treatment
plant with a 200,000-gallon capacity in Basra, evacuated
nearly 40 wounded children and their parents to the UAE for
medical treatment, and rebuilt six hospitals in Iraq, to
provide a few examples of the type of assistance. The UAE
-- via the federal Red Crescent Authority, Dubai Crown
Prince Muhammad Bin Rashid Al-Maktoum's Charitable
Foundation and Sharjah Charity International rovided
robust assistance to the people of Afghanistan, estimated
at over $150 million in the last two years. This includes
over $50 million in humanitarian assistance and a $50
million assistance-in-kind grant to the Afghan national
army. The UAEG is working to identify projects that would
fill its $30 million pledge made in Tokyo in 2002.

-- Operation Emirates Solidarity, a $50 million program
funded by the UAE for demining operations in southern
Lebanon, continued in 2003. The two governments are
working with the United Nations and private contractors to
complete the operation, which was launched in May 2002.
Two commercial companies cleared 3.9 million square meters
of land, removing and destroying 30,904 anti-personnel
mines, 1,476 anti-vehicle mines, and 1,400 UXO between May
2002 and May 2003. It is conservatively estimated that
130,000 mines, left by the various parties who contributed
the Lebanese civil war, need to be removed before life in
the south of the country can return to normal. The UAEG
will spend well above the initial $50 million as they
pledge to do more demining in southern Lebanon.

-- The UAEG also continued its generous humanitarian
assistance program to the victims of violence in the
Occupied Territories. The UAE federal Red Crescent
Authority, for example, provided $5.2 million in assistance
to Palestinians in the first half of 2003 and provided
about 300,000 meals during the month of Ramadan to
residents of the West Bank and the Gaza Strip.

-- The UAEG maintained its generous levels of development
assistance in the form of direct grant aid and concessional
loans to primarily Arab and Muslim countries, including the
Palestinians, Egypt, Jordan, Morocco, Oman and Pakistan.



--------------------------




3. (SBU) DIRECT COST SHARING


--------------------------



All figures in this report are in U.S. dollars. All UAE
Dirham figures were converted at the rate of 3.66 Dirhams
per one U.S. dollar.



A. Rents: The UAEG neither leases nor rents any
privately owned land or facilities for use by U.S. forces.



B. Labor: The UAE hired laborers and funded construction
work at Al Dhafra and Al Minhad Air Bases to upgrade
facilities for use by U.S. forces, as well as by Canadian
and French forces. This included road-building, force
protection fences, gates, utilities upgrade, and project
site preparations. It is not possible to estimate the size
of this work force or its cost to the UAE.



C. Katusa Labor: N/A



D. Utilities: Electricity, water and sewer were provided
at no cost to the 380th AEW at Al-Dhafra Air Base, and to
Minhad Air Base. Utilities at the port facilities at Jebel
Ali in Dubai and in Fujairah were included in the annual
lease fees paid by the U.S. Navy. The majority of the
utilities increase is attributed to the increased tempo of
operations from these bases and facilities due to OSW, OIR,
OEF, and OHA.

For CY03, the estimated figures for Al Dhafra and Minhad
are:

Electricity: $800,000; Water: $195,000



E. Facilities: Beginning in CY04, the UAE will have costs
associated with joint use of facilities of Gulf Air Warfare
Center, including office space, ramp and hangar space,
support shops, and ranges.



F. Facilities Improvement Program: N/A



G. Relocation Construction: In CY04, we expect to see
support for construction of a new U.S. aircraft ramp at Al
Dhafra Air Base funded by the U.S. The cost is $47
million. The UAE has given the U.S. the land, and has
given us the land to build a new fuel storage and transfer
facility. The UAE did site preparation, provided fill
material because of high water table level, built road for
U.S. sole use, installed perimeter fence with gates, built
new main entrance gate to facilitate U.S. operation,
restructured Al Dhafra Air Base force protection measures,
provided vehicle search area, demolished existing outdated
structures, and installed utilities.

The UAE has offered to provide funds from a source not
associated with the Defense Cooperation Agreement account
to fund the relocation of the main camp at Al-Dhafra Air
Base from the west side of the base to the east side. The
UAE has provided substantial fill material, grading, and
the use of its facilities there (three large warehouses
with associated sunshades and other buildings), laying down
of a new access road with a private gate for the U.S.
facility. The current site will be returned to the UAE
once relocation is complete in CY04, using FY03 MILCON
already authorized for the construction of semi-permanent
structures. The approximate one-time cost to prepare this
new foundation and use of the UAE warehouses and sunshades,
and other items is:

Al-Dhafra AB Main Camp Relocation: $20,000,000

The UAE has offered to provide money from the Defense
Cooperation Agreement account to fund the NAVCENT move of
its facilities from Fujairah International Airport to
Minhad Air Base outside of Dubai. The approximate one-time
cost to build this facility and outfit it with suitable
equipment is:

Minhad AB Furbishment: $22,000,000



H. Vicinity Improvements: N/A



I. Miscellaneous: OSD generated donations to support
stand-up of the Afghan National Army (ANA) was sizable:

ANA Assistance-in-Kind Donation: $50,000,000


-- Total of Direct Cost Sharing: $92,995,000 (estimated)



--------------------------




4. (SBU) INDIRECT COST SHARING


--------------------------





A. Rents: An area of approximately 85 acres was secured
at Minhad Air Base in May CY01 for development by the
USG as an additional site for the current cargo
operation at Fujairah International Airport. In
November CY02, the UAE provided 21 acres of land at Al-
Dhafra for the USG to construct hangars and ramp space
to operate its assets and is now home of KC-10
operations. According to Abu Dhabi Supply and Landing
services, the fair market value of the land is 385
Dirhams per square meter.
Al Dhafra Air Base Camp/West: $ 44,700,000
Al Dhafra Air Base Camp/East: $ 44,700,000
Al Dhafra East Ramp : $ 12,000,000
Al Dhafra KC-10 West Ramp : $ 12,000,000

Total Rents for CY03: $112,000,000

Facilities:
-- The U.S. Navy has been provided a dedicated deepwater
(14 meter) berthing space in the Jebel Ali Port Complex
for the berthing of its aircraft carriers. As of December
2003, there have been more than 625 port calls in the UAE.
Due to the current operations tempo, use of Dubai as a
liberty port was substantially increased in CY03. Use of
the Jebel Ali Port Complex represents a unique, valuable
resource for the Navy. The carrier berth (10/11) and berth
66, where the Navy logistics site is maintained were
provided without lease. When ships visit, only port fees
were charged. It should be noted that when not in use by
the U.S. Navy, the port allows commercial ships to use the
berth. Additionally, land has been given to the Navy next
to the carrier berth to allow them to set up an R&R
facility with shops, fast food outlets and recreational
facilities for sailors to use while on port liberty. The
following figures were provided by Jebel Ali Port Authority
for potential annual revenue gained if land was
commercially developed, and if the carrier berth was a
dedicated commercial berth.
Port Land Site: $1,500,000
50 Days at Berth 10/11: $ 622,000
192 Days at Berth 66: $2,602,000

-- The UAE has provided other invaluable support for
OEF and OIF, including the use of facilities in various
locations. For example, the U.S. Navy was allowed to use
the port of Fujairah, strategically situated on the Gulf of
Oman, to offload supplies for transport by land to Dubai,
rather than transiting the Straits of Hormuz.

Estimated Value of UAE Forward Operation Bases:
$20,114,751



B. Tax Concessions/Customs/Tolls/Duties:

Fees and charges (numbers in brackets indicate fees
levied):

-- Landing and cargo fees levied: ($900,000)
-- Port fees and cargo handling levied: ($1,500,000)
-- Taxes and customs duties waived: $3,000
-- Visa issuance charges levied: ($4,000)
-- Overflight authorizations waived: $2,565,000



C. Miscellaneous:

-- During every U.S. Navy aircraft carrier port visit,
the Dubai police provide 24-hour police security
presence at the Navy berth. Following the terrorist
attack on the USS Cole in Yemen in October, 2000, the
Dubai authorities increased security for U.S. Navy ship
visits, providing boat patrols, EOD police dogs and UAE
Naval and Coast Guard support, as well as the use of
port facilities to support U.S. security detachment
personnel observation posts and command center. Security
requirements were increased at both Jebel Ali and Fujairah
port and airport. The estimated cost for security provided
by host government at all three facilities is:
Est. Cost for Jebel Ali and Fujairah sites: $320,000

-- Note that while costs cannot be assessed, the UAE
Port Authority provides emergency medical and fire
fighting services at Fujairah International Airport and
Jebel Ali Port. UAE Military Police are also provided
at Fujairah International Airport.

-- The UAE Air Force provided considerable security to
the forces at the Al-Dhafra, Al-Bateen and Minhad Air
Bases through the infrastructure of the bases, security
personnel and HAWK missile batteries in the area.

-- UAE Contributions to the Air Warfare Center (AWC): A
joint CENTAF (USAF) and UAE Air Force and Air Defense
Initiative to initially provide out of CONUS training
for fighter units in the Gulf. UAE has contributed the
main schoolhouse ($8 million) to house the facility at
Al-Dhafra AB and is now providing additional funds ($26
million) to upgrade other facilities and fill them with
necessary furnishings and equipment.

Value of AWC Facilities provided: $34,000,000

TOTAL VALUE OF INDIRECT COST SHARING (WHERE CAPTURED):

$173,726,751 (estimated)



--------------------------



--------------------------




5. (SBU) GRANT AID/PEACEKEEPING AND HUMANITARIAN ASSISTANCE


--------------------------



--------------------------





A. Grant Aid:
-- There is very little information publicly available
on UAE spending, and only very general categories of
spending are published by the UAE Central Bank.
Published reports through 1996 indicate that the UAE
gave foreign aid equivalent to 3.5 percent of GDP.

-- One of the primary vehicles for administering the
UAE's foreign aid program, the Abu Dhabi Fund for
Development (ADFD), was established in 1971 as an
autonomous national development institution of the
Government of Abu Dhabi. Overall, 56 countries have now
benefited from the ADFD's assistance programs. The ADFD
also acts as an administrator of development assistance
extended directly by the Government of Abu Dhabi. The
primary objective of the fund is to offer aid to
undeveloped and developing countries in the Arab World
by extending project loans, guarantees, grants for
technical assistance or feasibility studies, and equity
participation in projects. Its emphasis has been on
projects that upgrade infrastructure, improve health and
educational facilities and generate employment
opportunities. Funding is typically made available in the
form of concessionary loans, usually offered at a low
interest rate, a long repayment schedule, and long grace
period. The ADFD has provided r managed for the Abu
Dhabi government bout $19.25 billion in development
assistance since 1971.



B. UN Peacekeeping and Other Humanitarian Operations:

-- UAE Institutional Arrangements for Peacekeeping and
Other Humanitarian Operations: The UAE's contributions
to international operations are usually handled via the
UAE Red Crescent Authority (RCA) and the Zayed
Foundation. Both are nominally NGOs and they enjoy
close links with UAEG officials and receive highly
publicized donations from the ruling family.
Established in 1992, the Zayed Foundation is entirely
funded by President Zayed and to date has funded
humanitarian assistance programs overseas valued at
slightly over $100 million. The RCA receives donations
from the ruling family and members of the public. The RCS
worked closely with the UAE Armed Forces during the Kosovo
crisis.

Other Humanitarian Operations:

-- The UAE -- via the RCA, the MBR Charitable Foundation
and Sharjah Charity International -- has already
provided over $50 million in humanitarian assistance to
the Afghan people. The RCA has constructed a refugee camp
in Chaman in Pakistan which houses between 10,000-40,000
refugees, and includes a 50-bed hospital, mosque and
playground. The RCA also has established an air bridge to
fly humanitarian assistance and medical supplies to
refugees on the Iranian-Afghan and Pakistani-Afghan
borders and has provided $365,000 in direct funding and
equipment for the Afghan Red Crescent Society hospital
in Kabul. The RCA is also distributing relief supplies
inside Afghanistan. Shaykh Mohammed bin Rashid's
Charitable Foundation has established three refugee camps
in the Spin Boldak area in eastern Afghanistan while
Sharjah Charity International has built one camp in the
same region. The camps inside Afghanistan each house
between 5,000-10,000 refugees.

-- The UAEG donated $50 million for the demining of
southern Lebanon. Two commercial companies cleared 3.9
million square meters of land, removing and destroying
30,904 anti-personnel mines, 1,476 anti-vehicle mines, and
1,400 UXO between May 2002 and May 2003.



C. Force Contribution for UN Operations: N/A


D. Current Contingency Operations: During OIF, the UAE
operated a hospital in Baghdad that required military
escorts. There were logistical costs associated with
establishing a hospital and transportation in Baghdad
during combat operations. During OEF, OIF, OSW, and HOA,
there were daily overflight operations. The UAE provided a
strategic lift to a Bulgarian battalion of their Polish
brigade being deployed to Iraq after the Iraq war.



E. Military Assistance: N/A



F. Counter proliferation Contributions: A USG
interagency team visited the UAE in December 2003 to
conduct a nonproliferation/export controls workshop on
weapons of mass destruction awareness with a wide range of
UAEG officials.



--------------------------




6. (U) GROSS DOMESTIC PRODUCT


--------------------------





A. UAE nominal GDP in 2002 was USD 70 billion.


B. The UAE Ministry of Planning projects a growth rate of
4.7% in 2003. We believe that this reflects a robust
growth in oil prices and the non-oil sector.



--------------------------




7. (SBU) DEFENSE EXPENDITURES


--------------------------





A. Defense Expenditures for 2003, Projected Outlays for
2004-2007

-- There has been no information published on the CY03
defense budget. However, UAEG defense expenditures for
salaries and fixed costs average $2 billion per year, and
procurement varies according to program requirements and
oil prices, according to informed sources.

Major Defense Expenditures in 2003:

-- As part of the $8 billion F-16 deal, the UAE is
purchasing (via FMS) training, weapons and associated
support amounting to $1.5 billion. The first aircraft will
be delivered to the U.S. training base in March 2004 and
then to the UAE in November 2004;

-- The UAE is in the process of upgrading its Mirage
fighter fleet and has purchased 32 additional 2000 Mirage-9
fighters. Most of the 32 Mirage 2000-9's were delivered in
CY03. The contract for the new Mirages, unveiled in CY98,
was $3.2 billion. The deal to upgrade the 30 Mirage 2000-5
aircraft already in service is worth $6 billion;

Projected outlays for 2004-2007:

The UAE is three-quarters of the way through a ten-year
program of military modernization (1995-2005) which,
according to press reports, should result in the
acquisition of $15 billion worth of equipment.
Following are elements:
-- Negotiations are under way for the French to sell six
patrol boats worth $600 million;

-- 12 68-meter Baynunah Class Guided Missile Boats
programmed for delivery through 2006;
-- 6 CH-47A twin rotor heavy lift helicopters that could be
used in special operations roles were acquired from Libya.
The UAE Armed Forces is currently evaluating the upgrade of
these air frames to CH-47F, at an estimated cost of $180
million.
-- 1 130-meter ex-Kortenouaer Class Frigate currently
under negotiation with the Netherlands;

-- An unknown number of 90-meter multi-role Corvettes;

-- 3 CASA 295 Fixed Wing Maritime Patrol Aircraft with
ASW/SIGINT capability programmed for delivery through
2008;

-- 2 206/7-type diesel submarines under negotiation with
Germany;

-- 1 Oiler/Replenishment Ship, Chinese constructed, with
Dutch systems, still to be funded;

-- As a follow-on to the F-16 deal, the UAE is
considering purchasing aerial refueling tankers,
cargo aircraft, and command and control;

-- The UAE already is an extensive user of U.S. military
training programs; all U.S. military training is paid
via FMS cases worth approximately $63 million.



B. Defense Personnel:
-- Civilians: Negligible

-- Active Duty: 62,000 (no projections available for next
five years)

-- Committed Reserves: Negligible.



--------------------------




8. (U) POINT OF CONTACT


--------------------------



Point of Contact is Joel Maybury, Political
Officer

Voice: 971/2/443-6691, ext. 2408
Fax: 971/2/443-4771
E-mail: MayburyJF@state.gov
Class: MayburyJF2@state.sgov.gov

WAHBA