NEA A/S WELCH'S MARCH 14 DISCUSSION OF WESTERN

C O N F I D E N T I A L ALGIERS 000498

SIPDIS

SIPDIS

E.O. 12958: DECL: 03/14/2016
TAGS: PREL PBTS EINV ETRD AG WI
SUBJECT: NEA A/S WELCH'S MARCH 14 DISCUSSION OF WESTERN
SAHARA AND BILATERAL ISSUES


Classified By: Ambassador Richard W. Erdman,
for reasons 1.4 (b) and (d)

SUMMARY
--------------


1. (C) In his March 14 meeting with NEA A/S David Welch, PM
Ouyahia said principles mattered in the world, and Algeria
looked to the UN to stick by its principles on the Western
Sahara, whose situation was a result of decolonization.
Welch said the U.S. did not want to discard the UN process,
but dealing with the realities of the situation was a
challenge that the U.S. and Algeria would need to work on
together. Finally, Ouyahia noted the progress Algeria had
made in creating a climate favorable to foreign investment
and encouraged more investment by U.S. firms. Welch affirmed
that the bilateral relationship was both important and
rapidly changing as evidenced by the growing number of U.S.
visitors and increased interest from U.S. investors. Septel
to report discussion of the peace process, Sudan, Iraq, and
Iran. (End Summary.)

OUYAHIA OFFERS FAMILIAR PERSPECTIVE ON WESTERN SAHARA
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2. (C) On the issue of the Western Sahara, Ouyahia noted he
had accompanied President Bouteflika to Washington for his
November 2001 meeting with President Bush and said the U.S.
should not forget that Algeria supported former Secretary of
State Baker in the whole course of the development of his
plan. Baker delivered good proposals, with a referendum
setting the stage for Sahrawi self-determination. Algeria
strongly encouraged the Polisario to set aside its fears and
support the plan. Unfortunately, said Ouyahia, Morocco
refused to accept the Baker Plan, and the UN Secretary
General's Personal Representative Van Walsum was telling the
UN Security Council that the realities today were different
and that Algeria needed to be more involved in finding a
solution to the dispute.


3. (C) Ouyahia said he wanted to stress a couple of points.
First, Algeria still looked to the UN to stick by its
principles. Principles mattered in the world. Second, the
issue in this dispute was one of decolonization. As such,
Algeria would not be a direct party to any negotiations; this
issue was for the Sahrawi people and Morocco to decide.
Ouyahia maintained that Algeria had given its full support to
the UN and UNSC since 1986 and emphasized that President
Bouteflika had said "at least 100 times that Algerians do not
want to see a single Algerian die for one inch of land
outside our national territory." On the subject of Western
Sahara, Welch said the U.S. respected the UN process and did
not want to discard it. That remained the U.S. view, but
dealing with the realities of the situation was the challenge
in front of us. We could not leave it the way things were,
but there was no clear direction on where to go.
Independence was unlikely in Welch's view. Welch offered
that the U.S. and Algeria work together to bridge the gaps in
this area.

BILATERAL RELATIONS MOVING FORWARD WELL
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4. (C) On the subject of working together, Ouyahia turned to
the Algerian-U.S. bilateral relationship and said it was
moving forward very well. Algeria had nearly fully won the
battle against terrorism on the ground, but 150,000 had died
and many more Algerians had suffered during the 1990s from
terrorism. This history explained, said Ouyahia, why
Algerians showed solidarity and support with the U.S. at both
the official and popular levels after September 11, 2001.
Ouyahia characterized the outpouring as spontaneous and
argued that "terrorism does not know borders, states, colors
or religions." Terrorism anywhere in the world, therefore,
was a threat to the international community and to Algeria.


5. (C) Ouyahia hoped that the overall improvement in
domestic security would encourage U.S. firms to invest.
Algeria was working to reform its economy by increasingly
opening the country to capitalism, ridding itself of the
vestiges of socialism, and investing in infrastructure

development. In this regard, he was pleased that a U.S. firm
like Bechtel was interested in participating in construction
of the $7 billion East-West highway project. (Note: Working
at highest levels, Embassy played a key role in convincing
GOA to shift from a build-operate-transfer model to a
sovereign financing approach and 2) to embrace an evaluation
model that would give weight to factors of quality,
integrity, and proven performance. The bids will be opened
March 28 and all recent signals suggest Bechtel has a good
chance of being awarded at lest one of the $2.5 billion
segments.) Welch agreed the bilateral relationship with
Algeria was important to the U.S. and that the relationship
was rapidly changing, noting that the growing number of U.S.
official visitors was one effective measure of the change and
interest from U.S. investors another.


6. (U) A/S Welch has cleared this message.

ERDMAN