EMIRATI BUSINESSMAN LOOKING TO INVEST IN WEST BANK

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