SCENESETTER: VISIT OF SECRETARY RICE TO BAHRAIN

S E C R E T SECTION 01 OF 03 MANAMA 001633

SIPDIS

FOR THE SECRETARY FROM THE AMBASSADOR
STATE ALSO FOR NEA/FO, NEA/ARPI

E.O. 12958: DECL: 11/07/2015
TAGS: PREL BA OVIP RICE CONDOLEEZZA
SUBJECT: SCENESETTER: VISIT OF SECRETARY RICE TO BAHRAIN

Classified By: Ambassador William T.Monroe. Reason: 1.4 (b)(d)


1. (C) We warmly welcome your November 11-12 visit to Manama
for the Forum for the Future meeting. The Bahraini
leadership, which values its relationship with the United
States and yearns for more high-level engagement, looks
forward to receiving you here. This will be your first
opportunity to meet newly-appointed Foreign Minister Shaikh
Khalid, and you will meet with King Hamid after the Forum.
Although Bahrain fully supports our effort in Iraq, the
King's recent letter to the President asking for an envoy to
come to Bahrain reflects anxiety that developments in Iraq,
especially Iranian involvement and Shia empowerment, could
have an adverse impact on this side of the Gulf.
Ahmadi-Nejad's recent belligerent comments have only added to
that anxiety.


2. (C) In this context, the King greatly appreciates USG
friendship, and the security afforded by the U.S. Naval
presence here (the Fifth Fleet/Navy Central Command has it
headquarters in Bahrain). Bahrain hopes early U.S.
ratification of the Free Trade agreement will strengthen ties
and boost an economy that does not benefit from the rich
oil/gas resources of its neighbors. Bahrain's relationship
with the U.S. has come under some criticism from certain
elements of the Bahraini public recently, most notably for
Bahrain's decision to close its Israeli boycott office under
USG FTA-related pressure, and as a result of continuing press
reports of allegations of mistreatment of Bahraini detainees
at Guantanamo. Increased media and parliamentary criticisms
of the U.S. are, ironically, a by-product of the King's
political reforms. These reforms, while criticized by Shia
opposition as insufficient, will receive a boost if, as
expected, the main Shia opposition society, which boycotted
the last election, decides to participate in next fall's
parliamentary vote. Still, finding a way to satisfy
Bahrain's Shia majority and gain its support for the King's
reforms will remain an overriding challenge for the
Government of Bahrain in the coming years.


3. (S) Key Issues:

-- Iraq: Iraq is a major concern for Bahrain, and it is the
reason behind King Hamid's recent request for discussions
with a U.S. presidential envoy. The King has been fully
supportive of the U.S./coalition effort in Iraq, although he
does look at it through the prism of a country with a Sunni
royal family and a Shia majority population. Bahraini
leaders have noted that Bahrain sits on the Sunni-Shia
sectarian divide, and worry that a rise in sectarian strife,
or even consciousness, in Iraq can influence attitudes in
Bahrain. Moreover, Bahraini officials regularly express
concern about Iranian inroads in Southern Iraq. Still,
Bahrain remains steadfastly supportive and is ready to be
helpful, although it lacks the financial resources to be a
major donor. Regionally, it participates in meetings of
Iraq's neighbors. Plans to upgrade its diplomatic
representation in Iraq were put on hold when Bahrain's
long-serving Charge d'Affaires, who had been extremely
helpful to U.S. officials in Baghdad, was wounded in July in
a kidnapping attempt just as he was about to be named
Ambassador. In his meeting with you, the King will reaffirm
his support for U.S. policy, while welcoming an opportunity
to give his perspective from the Gulf.

-- Iran: Bahrain, with its Shia majority population, has
traditionally worried more about Iran than Iraq. Although
Iran has been less active in Bahrain's domestic affairs in
recent years, it is widely believed to have helped fuel
violent Shia opposition activities in the 1990s, and the
government remains wary of Iranian intentions here. Earlier
this year, the government expressed concern when Shia
marchers displayed pictures of Khomeini and Khamenei during
Ashura processions. The election of Ahmadi-Nejad touched off
new alarm bells, raising concerns that his government will be
more aggressive towards smaller Gulf countries like Bahrain.
Bahraini officials blamed a reappearance of Khomeini/Khamenei
placards during last month's Al-Quds Day demonstration on
Ahmadi-Nejad's recent comments on Israel. King Hamid shares
our concerns about Iran's nuclear program, recognizing the
danger it poses for the Gulf, but strongly hopes that
military action will not be necessary -- both because of its
impact on Bahrain's Shia majority and because Bahrain would
be a prime location for Iranian retaliation.

-- Free Trade Agreement: Bahrain views the FTA it signed with
the U.S. in 2004 as an important symbol of its close ties
with the U.S., and a significant element in its effort to
develop and transform its economy, which does not benefit
from the oil riches of its neighbors. Bahrain shrugged off
harsh criticism by Saudi Arabia for its decision to move
forward on the FTA while the Saudi WTO accession languished,
and in fact Bahrain's determination to press ahead helped
rejuvenate Saudi accession talks. Bahrain's parliament
ratified the FTA nearly unanimously in July, although
Bahrain's subsequent decision to close down its Israeli
boycott office under USG pressure in order to help secure
Congressional ratification has generated sharp parliamentary
and public criticism. U.S ratification is currently hinged
on agreement on a few remaining labor issues, which are under
discussion. Failure to ratify the FTA before Congress
recesses -- and thus effectively postponing implementation
until 2007 -- would be a major disappointment for the Bahrain
Government.

-- Guantanamo Detainees: The big story in Bahrain this week
has been the return of three of six Bahraini detainees held
at Guantanamo. Since they were first taken to Guantanamo
some four years ago, the detainees have not been a big issue
in U.S.-Bahrain relations, and the government had not pressed
hard for their return. Recently, however, the issue took on
a higher profile as parliamentarians, human rights activists,
and others pressed for their return and criticized the
government for its ineffectiveness in securing agreement from
Bahrain's close friend and ally to bring them home. Press
reports of torture allegations and suicide attempts by one
Bahraini detainee and a hunger strike by another put the
government further on the defensive. The November 5 transfer
of the three detainees will alleviate some of the pressure,
although focus will now shift to the three still there (who
include the high-profile suicide case and the hunger striker).

-- Counterterrorism: Bahrain's mishandling of six Sunni
terror suspects in the summer of 2004 generated concern in
Washington about Bahrain's resolve in confronting Sunni
terrorism and precipitated the withdrawal of all U.S. Navy
dependents (some 1,000) from Bahrain. Since then, the
government has shown greater determination to deal with, and
cooperate on, our CT concerns. While the Sunni terror
suspects remain free and in legal limbo as the
constitutionality of the charges against them is considered,
the government has attempted to keep them under surveillance,
and has improved cooperation in other areas, critical as we
deal with Sunni extremist networks on island. In a hopefully
positive sign, the King recently appointed former Ambassador
to the U.S. Shaikh Khalifa as head of the Bahrain National
Security Agency. The Minister of Interior is seeking USG
assistance in helping Bahrain stand up a new Joint
Counterterrorism Center. Passage of a new anti-terrorism
law, which would facilitate terrorism prosecutions, is
stalled in the parliament, in part on human rights concerns
that it would revive aspects of the now defunct internal
security act, which was used in the 1990s to crack down on
Shia protesters. A well-regulated banking system facilitates
cooperation on terror financing, although enforcement remains
a concern.

-- Political Reform: King Hamid is proud that Bahrain has
been a leader in introducing political reform in the Gulf,
and greatly appreciates public USG recognition of his
efforts. That said, political reform in Bahrain is a work in
progress. Bahrain's Shia have long been disgruntled by
political and economic inequalities in Bahrain, and Bahrain's
main Shia political society -- Al-Wifaq -- boycotted the 2002
parliamentary elections, contending that the political
structure put in place denied them the ability to compete
fairly. Principal concerns were an appointed upper house,
which could block measures by the elected lower house, and
gerrymandering, which overrepresented the Sunni minority.
The King has argued that these measures were necessary to
protect the rights of the minority in the short term, and
that any changes could and should be made inside the
parliament. In the meantime, the parliament itself has
started to play a more meaningful role, most notably in the
budget process and in bringing accountability to the
government and its ministers. Al-Wifaq, apparently
calculating that it can be more effective inside the
parliament and unable to make the King budge on reforms
outside the parliamentary process, appears to have decided to
participate in the 2007 elections, and will announce its
decision on participation in January. More extreme elements
in Al-Wifaq, who have been aggressive in leading protests and
demonstrations against the government over the past year --
mostly over the issue of unemployment, which effects Shia
disproportionately -- oppose any move towards participation,
have broken away from Al-Wifaq, and can be expected to
continue demonstrating against the government. The USG has
been active in promoting democratic reform in Bahrain with
MEPI programs, most notably through NDI, which has an office
in Bahrain and has worked to reach out to all elements in
Bahrain. Among NDI's programs has been promotion of women's
participation in the electoral process, something that has
the support of the Royal Court.


4. C) Key points to make in your meeting with the King:

-- Thank the King for Bahrain's active participation in the
G8/BMENA reform initiative, and for stepping up and
volunteering to co-host the second meeting of the Forum for
the Future. Note in particular the hard work of the Foreign
Minister and his team in organizing this major event, and
brief the King on key results of this Forum, including the
Foundation for the Future.

-- Recognize the long history of cooperation between our two
countries, as reflected in Bahrain's status as a Non-NATO
Major Ally and the support Bahrain provides for our U.S. Navy
presence in the region. Thank the King for Bahrain's support
for OEF, OIF, and U.S. policy in Iraq.

-- Brief the King on the latest developments in Iraq, and
solicit his views on the situation there as seen from the
Gulf.

-- Brief the King on Iran.

-- Commend the King's steps on political and economic reform,
and encourage Bahrain to continue on this path of reform.

-- Commend Bahrain for its decision to be the first in the
Gulf to negotiate a Free Trade Agreement with the U.S., and
pledge full Administration backing for U.S. ratification of
the FTA as soon as possible.
MONROE