SHEIKH HAMED'S RAILWAY

UNCLAS ABU DHABI 003718 SIPDIS SENSITIVE STATE FOR NEA/ARP, NEA/RA, EB STATE PASS USTR E.O. 12958: DECL TAGS: ECON ETRD EFIN PREL PTER IZ TC SUBJECT: SHEIKH HAMED'S RAILWAY ¶1. (SBU) Summary: The Chairman of the Abu Dhabi Department of the Economy suggested to Ambassador on October 17 that the U.S. focus more of its regional efforts on economic reform. He asked for USG support for a railway that would stretch from the Gulf of Oman up to Jordan. End Summary. ¶2. (SBU) On October 17, Ambassador and EconChief met with Chairman of the Abu Dhabi Department of the Economy, Sheikh Hamed bin Zayed, to follow-up on his idea of building a trans-Arabian peninsula railway which could connect to the proposed EuroMed railway in Jordan. Sheikh Hamed had mentioned the concept briefly to USTR Zoellick last week and Abu Dhabi Deputy Crown Prince Mohammed bin Zayed had asked that he follow up with Ambassador. Before turning to his railway proposal, Sheikh Hamed encouraged the USG to focus its efforts in the Arab world on economic reform. In his view, he said, the region's highest priority was economic reform and job creation; democratic reform could follow. He noted rhetorically "people need jobs before they go to the polls." ¶3. (SBU) Sheikh Hamed then turned his discussion to the EU's proposal for a EuroMed railway project stretching from Morocco to Syria. He noted that he had told German Chancellor Gerhard Schroeder that the proposed route made little economic sense, because goods didn't flow over that route. He counter-proposed a railway that would stretch from the Indian Ocean up the Arabian Peninsula and to Jordan, where it could connect with a EuroMed railway network. This route would tie together the Asian and European markets. According to Sheikh Hamed, Schroeder liked the idea, but was unable to get EU support. ¶4. (SBU) Sheikh Hamed explained that the proposed railway would stretch from the port of Fujairah on the Gulf of Oman through the Emirate of Abu Dhabi and then through Saudi Arabia to Jordan. This route would bypass the vulnerable straits of Hormuz. He emphasized that Jordan could benefit either as the terminus of the railway or as the intersection between two major railway networks. According to Sheikh Hamed, Chinese, Indians, Saudi, and Kuwaiti investors were already expressing interest in the project. He asked for U.S. support for the project, both for as an economic development program and as a regional integration program and suggested that post send a participant to the MEED conference in Dubai on railway projects in the region for more information. ¶5. (SBU) Comment: Sheikh Hamed is an "up-and-comer" in the ranks of the ruling Al-Nahyan family, and is regarded as one of Abu Dhabi's economic reformers. He has laid out, in his railway proposal, an ambitious vision for regional economic integration and assistance to poorer countries (and regions in the UAE). Although we have yet to assess the commercial merits of this concept, it is clear that Hamed has the confidence of his elder half brother, Abu Dhabi Deputy Crown Prince Sheikh Mohammed bin Zayed. End Comment. Sison