Identifier
Created
Classification
Origin
08DOHA745
2008-10-23 11:12:00
SECRET
Embassy Doha
Cable title:  

SCENESETTER FOR DEPUTY TREASURY SECRETARY

Tags:  EFIN EINV PREL OVIP QA 
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VZCZCXRO2270
PP RUEHDE RUEHDIR
DE RUEHDO #0745/01 2971112
ZNY SSSSS ZZH
P 231112Z OCT 08
FM AMEMBASSY DOHA
TO RUEHC/SECSTATE WASHDC PRIORITY 8330
RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY
INFO RHMFISS/HQ USCENTCOM MACDILL AFB FL PRIORITY
RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE
S E C R E T SECTION 01 OF 03 DOHA 000745 

SIPDIS

FOR DEPUTY SECRETARY KIMMITT FROM AMBASSADOR LEBARON

E.O. 12958: DECL: 10/22/2018
TAGS: EFIN EINV PREL OVIP QA
SUBJECT: SCENESETTER FOR DEPUTY TREASURY SECRETARY
KIMMITT'S VISIT TO QATAR

Classified By: Ambassador Joseph E. LeBaron, for reasons 1.4 (b, d).

S E C R E T SECTION 01 OF 03 DOHA 000745

SIPDIS

FOR DEPUTY SECRETARY KIMMITT FROM AMBASSADOR LEBARON

E.O. 12958: DECL: 10/22/2018
TAGS: EFIN EINV PREL OVIP QA
SUBJECT: SCENESETTER FOR DEPUTY TREASURY SECRETARY
KIMMITT'S VISIT TO QATAR

Classified By: Ambassador Joseph E. LeBaron, for reasons 1.4 (b, d).


1. (C) Embassy Doha welcomes your visit to Qatar. We have
requested meetings for you with the Amir, Prime
Minister/Foreign Minister, Minister of Finance, and Central
Bank Governor. When Secretary Paulson was here June 1, he
met with all of these officials, except the Amir. The dollar
peg and other currency issues were the focus of those
meetings, and Secretary Paulson also emphasized the open
investment climate in the U.S. for Gulf sovereign wealth
funds. The Prime Minister told the Ambassador October 19
that he would meet with you if he is in town, which is an
indication that the host government looks forward to your
upcoming visit.


2. (C) Below we provide the Country Team's views on how your
visit can best advance the U.S. Government's strategic
objectives in Qatar. We also discuss the key strategic
trends in the bilateral relationship over the coming three
years. We start, however, with a brief review of the
bilateral relationship.

--------------
THE U.S.-QATAR RELATIONSHIP
--------------


3. (C) The breadth and depth of Qatar's relationship with the
U.S. is impressive, especially for a country the size of
Connecticut, with only 1.7 million inhabitants, of whom only
about 225,000 are actually Qatari citizens.

-- Because it is so small and its energy resources so large,
Qatar now has an annual per capita income of over $60,000.
Even through the current global financial crisis, Qatar's
national revenues will continue growing, and Qatar should
soon have the highest per capita income in the world.

-- The economic relationship between Qatar and the United
States is vital. U.S. energy companies have invested tens of
billions of dollars in the oil and gas industry here. Qatar,
which holds the third largest natural gas reserves in the
world after Iran and Russia, is expected to become in 2009
one of the most important suppliers of imported liquefied
natural gas (LNG) to the U.S. market.

-- Qatar's sovereign wealth fund, the Qatar Investment

Authority (QIA),is a growing potential source of direct
investment in the United States and elsewhere. QIA will be
increasingly important to the U.S. as it grows in parallel
with our own need for foreign investment. Given Qatar's
wealth, the country also has great potential to be a partner
in providing aid to struggling regional states, and we
frequently approach them about participating financially in
these initiatives.

-- Vast wealth has bolstered the country's political
ambitions, leading to Qatari foreign policy initiatives that
have too often been at odds with U.S. objectives. Examples
include Qatar's relations with Hamas, Syria, and Sudan.

-- Qatar's location, wide-ranging foreign relations,
fast-growing economy, and expanding transportation links have
made counterterrorism cooperation, including counterterrorist
financing, a key aspect of our relationship. Qatar's wealth,
in particular, means its citizens are potential sources of
money for violent extremists and cooperative efforts to
target and prevent these financial flows are central to our
bilateral agenda.

-- The U.S.-Qatar military relationship is extremely
important. Qatar provides the U.S. military exceptional
access to two major Qatari military installations, Al Udaid
Air Base and Camp As-Saliyeh - perhaps CENTCOM's most
important operating installations outside of Iraq. Qatar
charges us no rent, and in fact is funding over USD 700
million in construction projects for the exclusive use of the
U.S. military.

-- Our educational and cultural relationship with Qatar is
strong and growing. Qatar has committed itself like few
other Arab states to modernizing its educational system, and
has turned decisively to the Unites States for help. Qatar
has thus far imported branch campuses of six U.S.
universities, including Texas A&M, Carnegie-Mellon,
Weill-Cornell Medical School, Georgetown, Virginia
Commonwealth, and Northwestern.

-- Qatar's rapid growth, and the resulting massive demand for

DOHA 00000745 002 OF 003


foreign workers to develop the country's infrastructure often
leads to exploitation and abysmal working conditions for the
laborers. The USG is concerned about the treatment of
foreign workers in Qatar, which has been ranked on Tier 3 -
the lowest - in the State Department's Trafficking in Persons
Report for 2008.

-- Al Jazeera, the television network with an Arabic-speaking
audience of some 60 million, is based on Qatar and funded by
the Amir. The network's biased coverage, particularly of
issues important to the U.S., has long been an irritant in
our bilateral relationship. We nevertheless recognize the
value of appearing on Al Jazeera in order to ensure that
official U.S. voices are heard in the Arab world.

-------------- --------------
ECONOMIC, FINANCIAL, AND COUNTERTERRORISM RELATIONSHIPS:
KEY TRENDS THROUGH 2011
-------------- --------------


4. (S) Over the next three years, we believe the following
are the major trends with the greatest impact on our
economic, financial, and counterterrorism relationships. It
is here where your visit, and those of other senior USG
officials, can have the most important impact.

-- (C) QIA is currently estimated to control about USD 60
billion and its funds available for investment overseas will
grow substantially.

-- (C) Qatar will maintain a conservative approach on
currency exchange rate issues, and this policy is unlikely to
change in the foreseeable future. Qatari officials, from the
Central Bank Governor to the Prime Minister, have told us
Qatar is committed to the dollar peg -- at least until a
common GCC currency is established. The Prime Minister stuck
by this pledge most recently in an October 19 meeting with
the Ambassador.

-- (C) Qatar's own financial sector will experience
qualitative and quantitative growth. However, liberalization
and diversification of the economy will be sporadic and
piecemeal.

-- (C) The exploitation of hydrocarbon resources will rapidly
expand Qatar's wealth. By 2011, Qatar will double its output
of LNG to 77 million tons per annum. Qatar currently plans
an estimated USD 130 billion in capital investment through

2015.

-- (S) Due to its small size and great wealth, Qatar will not
be a major source of extremists leaving to engage in
terrorism. Some of Qatar's citizens, however, may support
terrorism financially, perhaps outstripping the ability of
the government to stop it.

-- (S) We expect that Qatar will continue to be an
inconsistent partner in combating terrorism, in part because
of fear of embarrassment by acknowledging problems, and in
part because more cooperation might antagonize extremist
groups and invite an attack.

--------------
INVESTMENT AND COUNTERTERRORISM:
MAJOR GOALS OF OUR STRATEGIC ENGAGEMENT
--------------


5. (C) A senior adviser to the Qatari leadership told us in
June that by 2011 fully 75 percent of the funds in the world
available for investment would be in the hands of Qataris,
Saudis, and Emiratis. If that figure is even close to
accurate, it suggests we have a strong interest in
encouraging those countries to invest in the U.S. - even
while many GCC officials and investor countries doubt whether
the U.S. truly welcomes Arab investments. Qatar's doubts
about the U.S. as a reliable destination for its capital may
have been shaken further by the our current financial
difficulties.


6. (C) As noted above, as Qatar's financial sector expands
and the country's wealth grows, so too will the potential for
Qatar to be a source of money from private Qatari citizens to
terrorist groups. Qatar's Central Bank currently cooperates
on a range of anti-terrorist finance efforts, and we are
working to expand that cooperation. Qatar has an agency
charged with regulating foreign charitable contributions by
its citizens and we need to deepen our relationship with it
and encourage Qatar to bolster its commitment to fighting

DOHA 00000745 003 OF 003


terrorist finance.

--------------
HOW YOUR VISIT CAN HELP THESE STRATEGIC GOALS
--------------


7. (S) We believe the following approach will help your
visit advance these goals:

-- (C) Engage and consult with the Qatari leadership on what
the U.S. is doing to restore confidence in global financial
markets and solicit Qatar's own thinking and plans. The
global financial clout of GCC countries will only grow and
Qatari officials appreciate being taking seriously on these
issues by senior U.S. officials. (The Prime/Foreign Minister
told Secretary Rice in a recent phone call that "Qatar wants
to be part of the solution." He later complained to U.S.
officials that Qatar wasn't invited to the White House G-20
summit on November 15.)

-- (C) Applaud Qatar's substantial commercial relationship
with the U.S., particularly in the hydrocarbon sector, and
encourage Qatari investments in the United States. Emphasize
that we welcome investment from the Arab world, as various
interlocutors (at QIA and Qatar Petroleum, for example) were
dismayed by the failed Dubai Ports World transaction, and put
off by their own experience gaining CFIUS approval for their
investment in the Golden Pass LNG receiving terminal in Texas.

-- (S) Note our continued interest in cooperation on
combating terrorist finance. The IMF recently issued a
report which the local press touted as a "clean bill of
health" on financial crimes and money-laundering. The
reality is more complicated, and while our cooperation with
the Qatar Central Bank is good, the Qataris need to be
reminded of the constant need for vigilance. Principal
responsibility for this issue lies with the Qatar Central
Bank.
LeBaron