COMOROS, NEW MIDDLE EAST TOURISM DESTINATION?

UNCLAS ANTANANARIVO 001191 SIPDIS SENSITIVE SIPDIS DEPT FOR AF/E AND AF/FO PARIS FOR D'ELIA E.O. 12958: N/A TAGS: EFIN ECON PREL CN SUBJECT: COMOROS, NEW MIDDLE EAST TOURISM DESTINATION? ¶1. (SBU) SUMMARY: Recent press reports suggest a surge in tourism investment interest in the Comoros, most notably Dubai World and a Saudi delegation. While promising for the embattled Sambi government, the timing and certainty of most of these investments are unclear. Still, in a tiny impoverished nation with few resources, tourism holds the potential to substantially bolster the Comoros economy. END SUMMARY. ¶2. (SBU) Even while the IMF declares the economy in sharp decline and the Union Government broke, Comoran President Sambi is actively courting Middle East investors in tourism. A recent investment delegation to the Comoros, led by the Saudi Islamic Development Bank, reportedly explored multimillion dollar hotel investments in the islands. Given the Comoros is still in arrears to the Bank and expects to reschedule its debt, this visit was more accurately described privately as a "first contact" on potential investment interest. Union Vice President Idi Nadhoim, the most worldly and sophisticated of Sambi's inner circle, has publicly touted the Union Government's success in promoting tourism investment. He and other officials frequently travel, mostly to Arab League member states, on investment promotion missions. ¶4. (SBU) According to Planning Commissioner Alfeine Tadjiddine, Kuwait Holdings is already renovating the Itsandra Hotel in Moroni, one of two functioning establishments at international standards. The same group reportedly plans a major new resort in the undeveloped northern tip of Grande Comore. Dubai World recently secured the rights to the long-closed Galawa Hotel along the northwest coast of Grande Comore; press reports suggest the group will invest USD 70 million in the coming years. The old structures at the Galawa have already been demolished to make way for new construction. ¶5. (SBU) In a meeting with PolEcon Chief, Tadjiddine was cautious about most of the announced investments. She confirmed the Itsandra should re-open in early 2008, but had no details about the other projects. Tadjiddine expected little to come of the Saudi visit, given the looming debt. She reported Kuwait Holdings had also expressed interest in the Port of Moroni. Dubai World is also reportedly exploring tiny Moheli, site of a unique marine nature reserve. Tadjiddine candidly admitted that the one project with a significant dollar figure, the USD 70 million Dubai World proposal for the Galawa, had an unclear timeline for construction. BNP Paribas Refuses Dubai World Account? - - - - - - - - - - - - - - - - - - - - - ¶6. (SBU) French Ambassador Job, when asked about all of these "new investments," emphasized most were little more than promises. Job stated that in the case of Dubai World's Galawa Investment, he had learned from Paris that the company attempted to place some of the financing for the project with French bank BNP-Paribas. The bank refused the transfer of some millions of dollars, Job said, because Dubai World could not adequately guarantee the provenance of the money. Potential Development Impacts - - - - - - - - - - - - - - - ¶7. (SBU) The Comoros, if not politically unstable, would be an idyllic tropical tourist destination. The beaches, volcano, Livingstone bats, sea turtle nesting grounds and other natural attractions are stunning. With a population of only 700,000, a vibrant hotel and related tourism industry could provide employment for a substantial proportion of Comoros' mostly idle population. The Itsandra and Galawa renovations demonstrate "concrete" investments. The others seem to remain only promises for now, perhaps from investors waiting for the end of the Anjouan crisis to take a chance on the Comoros. MARQUARDT