Identifier
Created
Classification
Origin
07MANAMA121
2007-02-08 14:45:00
CONFIDENTIAL
Embassy Manama
Cable title:  

CROWN PRINCE AND DEPUTY SECRETARY OF COMMERCE

Tags:  PREL ECON ETRD ELAB BA ECTRD 
pdf how-to read a cable
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FM AMEMBASSY MANAMA
TO RUCPDOC/DEPT OF COMMERCE WASHDC IMMEDIATE
RUEHC/SECSTATE WASHDC IMMEDIATE 6398
INFO RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE PRIORITY
RUEHAM/AMEMBASSY AMMAN PRIORITY 1293
RUEHRB/AMEMBASSY RABAT PRIORITY 1001
RHMFISS/HQ USCENTCOM MACDILL AFB FL PRIORITY
RHBVAKS/COMUSNAVCENT PRIORITY
C O N F I D E N T I A L SECTION 01 OF 02 MANAMA 000121 

SIPDIS

SIPDIS

E.O. 12958: DECL: 02/08/2017
TAGS: PREL ECON ETRD ELAB BA ECTRD
SUBJECT: CROWN PRINCE AND DEPUTY SECRETARY OF COMMERCE
SAMPSON DISCUSS TRADE, INVESTMENT

Classified By: Ambassador William T. Monroe for reasons 1.4 (b) and (d)
.

-------
Summary
-------

C O N F I D E N T I A L SECTION 01 OF 02 MANAMA 000121

SIPDIS

SIPDIS

E.O. 12958: DECL: 02/08/2017
TAGS: PREL ECON ETRD ELAB BA ECTRD
SUBJECT: CROWN PRINCE AND DEPUTY SECRETARY OF COMMERCE
SAMPSON DISCUSS TRADE, INVESTMENT

Classified By: Ambassador William T. Monroe for reasons 1.4 (b) and (d)
.

--------------
Summary
--------------


1. (C) Crown Prince Shaikh Salman told Deputy Secretary of
Commerce Sampson February 4 that Bahrain has been and will
continue to be a close friend of the United States, and he
expressed his pleasure that the U.S.-Bahrain Free Trade
Agreement (FTA) was being implemented. He said he would
accompany an AmCham trade mission on its stop in Chicago in
early March. The goal of the country's labor reform program,
he explained, is to unify the local and expatriate labor
markets in Bahrain. Foreign workers would gain the right of
freedom of movement among employers while businesses would
pay a fee for the work permit for each foreign worker. The
fees would enter a fund dedicated to training Bahrainis to
improve their skill sets. The CP said the Bahrain Investors
Center had been a boon to promoting small and medium
businesses by simplifying the registration process. In
response to the CP's question about accumulation of
value-added among U.S. FTA partners for exports to the United
States, Dr. Sampson said this subject could be an issue to
discuss at a planned conference on the Middle East Free Trade
Area to take place on the margins of the Dead Sea World
Economic Forum in May. End Summary.

--------------
Bahrain A Close Friend of the U.S.
--------------


2. (C) Crown Prince Shaikh Salman bin Hamad Al Khalifa
welcomed Deputy Secretary of Commerce Sampson to Bahrain
February 4 and expressed his country's appreciation for the
United States protecting the security and stability of the
region for over 60 years. He affirmed that Bahrain has been
and will continue to be a close friend of the United States.
Dr. Sampson replied that the U.S. looks forward to building
up the bilateral economic relationship to be as strong and
deep as the strategic relationship. He said the U.S.
believes that building trade with, and within, the region is
critical to the long-term stability and security of the Gulf.

The Crown Prince said he was pleased implementation of the
FTA was moving forward. Dr. Sampson noted that bilateral
trade had topped $1 billion for the first time in 2006. The
Ambassador added that overall U.S. trade and investment with
the region was growing substantially.


3. (C) The Crown Prince noted that he would visit the United
States soon and planned to accompany a trade mission of the
American Chamber of Commerce in Bahrain on its stop in
Chicago in early March. Dr. Sampson said he would try to
meet up with the delegation in Houston, following its visit
to Chicago. He praised the AmCham delegation, saying it
would increase the visibility of Bahrain in the United States
and allow for networking between business people. He offered
the services of USDOC's export assistance centers to promote
trade between the two countries.

--------------
Unifying Bahrain's Labor Market
--------------


4. (C) In response to the Deputy Secretary's question, the
CP said Bahrain's labor reform program was going well, noting
that parliament had passed almost all required legislation.
The only outstanding item to be addressed is a law to
decrease severance packages for fired employees. The essence
of the reform plan is to unify the local and expatriate labor
markets in Bahrain. The requirement for expat laborers to
have sponsors was eliminated, giving them the right of
freedom of movement among employers. The fee paid by an
employer for a work permit for a foreign worker would
increase, resulting in two outcomes. One, the costs for a
(more expensive) Bahraini worker and a (cheaper) foreign
worker would be in greater balance and, two, funds raised by
the permits would be used to train Bahrainis to improve their
skill sets.


5. (C) Shaikh Salman admitted that a major challenge remains
gaining the buy-in of employers. He said the government
should not force businesses to hire people or put employees
into jobs they are not qualified to perform, which is
inevitable with the Bahrainization program. Employers will

MANAMA 00000121 002 OF 002


be offered incentives to participate in the labor reform
program, such as their gaining access to graduates of GOB
training schemes and obtaining money from the central labor
fund for company-run training programs. The CP mentioned
that an important part of labor reform is providing students
with the option of participating in applied,
market-appropriate technical education programs. The
University of Bahrain has too many students now, in Shaikh
Salman's view, and some of these students would be better off
taking classes at a polytechnic university. Bahrain used to
have a polytechnic university, and he was interested in
seeing it reconstituted.

--------------
Growth Through SMEs
--------------


6. (C) The Crown Prince said Bahrain was trying to stimulate
growth among small and medium enterprises (SMEs),noting this
was an area where the United States has expertise and could
possibly assist Bahrain. He said the Bahrain Investors
Center, a one-stop shop for registering businesses, had been
a boon to promoting SMEs. The Center had reduced the number
of steps required to establish a business by three-quarters.
Registrations were approved expeditiously as long as the
company did not plan to operate in one of a small number of
restricted sectors. In response to Dr. Sampson's question,
the CP said Bahrain had looked to several countries for
models in improving its education, training, and investment
regimes, including Australia, Singapore, Ireland, and the
United States.


7. (C) Shaikh Salman indicated that Bahrain was an
increasingly desirable destination for foreign direct
investment, but the government had not wanted to attract too
much attention while it was building momentum. He said a
recent decision to air an advertisement about Bahrain on CNN
International represented a sense that it was time to give
the country a higher profile internationally. The Ambassador
noted that the timing of the ad was good, with the FTA,
substantial real estate development, and new industrial parks
all coming on-line.

--------------
Achieving MEFTA
--------------


8. (C) The Crown Prince asked the USG's view of accumulation
of value-added among FTA partners for export of goods to the
U.S. Dr. Sampson replied there was a proposal to hold a
conference on the Middle East Free Trade Area (MEFTA) on the
margins of the Dead Sea World Economic Forum at the end of
May. A discussion of accumulation would be appropriate at
that time. The CP said Bahrain supports MEFTA and wants to
help the President achieve this objective.

--------------
Elections Attract Moderates
--------------


9. (C) The Deputy Secretary said Bahrain had experienced
impressive participation in its recent parliamentary and
municipal elections. The Crown Prince stated that citizens'
participation speaks well about political openness in the
country. The electoral process attracted moderates while
more extreme elements on both the Sunni and Shia sides did
not participate. Although Bahrain is doing "all right" so
far, the CP said he is concerned about tension and violence
in the region spilling over into Bahrain.


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