SOMALIA - Business and Investment Council Shares U.S.

UNCLAS SECTION 01 OF 03 NAIROBI 002553 SIPDIS SENSITIVE DEPT FOR AF/E AND A/S FRAZER ALSO FOR AF/EPS - Ann Breiter and Ada Adler STATE PLEASE PASS TO USAID/EA COMMERCE FOR BECKY ERKUL E.O. 12958: N/A TAGS: PGOV PREL ECON ETRD EAID SO SUBJECT: SOMALIA - Business and Investment Council Shares U.S. Priorities -------------- Summary -------------- ¶1. (SBU) Summary: On October 26 the chairman and members of the Djibouti-based Somali Business and Investment Council (SBIC) told us that key business leaders are ready to support the peace process in Somalia and begin a new chapter in relations with the U.S. Government. The businessmen welcomed renewed commercial relations, familiarization visits and trade missions to the United States. SBIC members said they have focused on "countries who welcomed them" in the Far and Middle East, especially China, but want to focus on the United States' and Europe's better quality goods and services. They advocated reversing the Al-Barakaat financial asset freeze under Executive Order 13224, to return the savings and investments of countless Somalis. The business leaders recommended ways to build closer contact with the United States and address shared concerns about security, stability, and good governance in Somalia. End Summary. -------------- Directly Engaging Somali Business Leaders -------------- ¶2. (SBU) On October 26 we met in Djibouti with SBIC Chairman Ahmed Nur Ali Jumale, Secretary General Abdi Yusuf Maher, and 13 members of the SBIC. It was our second meeting with SBIC. ¶3. (SBU) In the first meeting, Maher told us SBIC was founded in 2007 by over 100 business leaders who came to Djibouti from Dubai, Saudi Arabia, and other countries in the region to inaugurate a membership-based organization to promote commerce in both Somalia and Djibouti. The SBIC occupies an entire floor of a modern office building in downtown Djibouti. At the time, Maher told us his group welcomed the opportunity to "clear the air" with the United States by demonstrating transparency in their business activities. He welcomed a partnership with both the United States and the UN to promote peace in Somalia. During the first discussion, the SBIC representatives focused on the importance of engaging youth in productive, income-generating activities to discourage their involvement in violence. ¶4. (SBU) The October meeting was our first with SBIC Chairman Jumale. Maher introduced SBIC participants as representatives of ;Somalia's "mobile" business community, explaining that all of the companies present had operations based in Somalia and the wider region. He welcomed the direct contact stating, "In the past the U.S. has made the error of sourcing information from warlords instead of business leaders." He indicated an interest in SBIC serving as a conduit for Somalia to actively participate in trade opportunities, sourcing higher quality goods from the United States, and initiating visits to key cities in the United States to learn about the business climate and to establish relationships with potential partners. -------------- A Change in the Wind: "We Share the Same Concerns" -------------- ¶5. (SBU) Jumale characterized our discussions as "a change in the wind, demonstrating that nothing is stagnant and that even our relationship can be dynamic." Other participants emphasized their unique understanding of realities on the ground as they manage their operations in Mogadishu and other cities and towns across Somalia. Mohamed Abdi Gabeire, trader and Chairman of the Somali Business Union in Banadir Region said, "We lead efforts in Mogadishu and crave stability for our business - we are prepared to cooperate to pave the way for peace." ¶6. (SBU) The SBIC representatives stated that most of their business goes to the Far East, especially China. They said that they would like to expand their focus to Europe and the United States where they believe they can obtain higher quality goods. Gabeire said that his company and the United States share the same concerns about piracy -- the explosion of piracy has disrupted his NAIROBI 00002553 002 OF 003 access to imported goods. Gabeire told us he was forced to pay $125,000 ransom to release of one of his hijacked ships. He expressed frustration that pirates boarded his vessel as the captain talked with NATO ships in the area. Another SPIC representative said, "We are all targeted and we suffer most from piracy." -------------- Supporting the Government -------------- ¶7. (SBU) Gabeire and others told us they pay their taxes in Mogadishu, supporting the TFG financially to promote law and order and governance. He said that together, the businesses gave $150,000 to the Banadir regional administration to clean Mogadishu's streets, and "as thanks, they shelled Bakara market." The business leaders agreed that they are grateful to the Prime Minister and his outreach efforts to the business community, especially the government's agreement to allow the private Bakara market security force. "You [the USG] spend money to support peace and we spend money to support peace - we have the same priority." Gabeire said. ¶8. (SBU) Other business leaders were more critical of the TFG. Mohamed Osman, a trader operating between Djibouti, Dubai, and Somalia, said that there is a common fear of working too closely with the TFG. He criticized the TFG's lack transparency and attention to commerce. When the TFG came to power, the business community was flourishing and now, many sectors are struggling, he said. Jumale told us that he meets personally with leaders from both the TFG and the ARS. "We support President Yusuf and Sheikh Sharif personally." Representatives from SBIC have been present at the Djibouti peace agreement's public events and formal ceremonies. -------------- Al-Barakaat: A (Frozen) National Institution -------------- ¶9. (SBU) While Jumale introduced himself as the Chairman of Al-Barakaat in the process of establishing a bank in Djibouti, it was the other SBIC representatives who advocated on behalf of the financial network. Several of the businessmen offered personal examples of losing tens of thousands of dollars when Al-Barakaat's assets were frozen. (Note: In November 2001, the United States blocked the assets of organizations and individuals associated with the Al-Barakaat investment and money transfer network under the authority of Executive Order 13224 to combat terrorist financing. Also in November 2001, the Department of Treasury Office of Foreign Assets Control listed Al-Barakaat and its associated companies as "Specially Designated Global Terrorists" and Ahmed Nur Jumale was individually designated on the same list.) ¶10. (SBU) The SBIC representatives stated that after the 1991 collapse of Somalia's banks and financial institutions, millions of Somalis turned to Al-Barakaat's money transfer network. Later Somalis invested their savings in Al-Barakaat. No one expected Al-Barakaat's assets to be frozen. Meeting participants described a "huge" demand that is growing. The freeze has had its desired effect, however. An owner of one money transfer company said that after the Al-Barakaat experience, his network along with all other actors in the sector are careful to abide by all anti money-laundering rules, and provide full disclosure of all transactions to ensure transparency. ¶11. (SBU) Jumale alleged that almost all of the other individuals that were designated with him in 2001, but who hold passports from other countries, have been removed from the sanctions list. "Because I am Somali, I have no government to advocate on my behalf - you are put on lists and then forgotten." Jumale asked us to inquire about the status of the designation and the process through which he and al-Barakaat could be de-listed. Jumale said that he would like to directly engage with the U.S. -------------- Rebuilding Somalia -------------- ¶12. (SBU) Jumale offered the example of Somalis creating and NAIROBI 00002553 003 OF 003 operating their own airlines, financial institutions, and private companies to fulfill all of the public services like electricity, water, and telecommunications that a government would normally provide. He described private pipelines installed in most Somali cities that provide water for those who can pay. He told us that eleven companies are competing in a vibrant telecommunications sector with an infrastructure stronger than most countries in the region. In the highly competitive financial sector, there are ten major companies and over thirty smaller ones. ¶13. (SBU) Jumale said that there has been little progress on major infrastructure projects and they want a government who can secure an environment for large-scale investment. He said that while the private sector has led the way, Somalia needs a recognized and respected government to finance large infrastructure and security projects. He said that Somalis are willing to take the risk and re-invest in the country and would welcome joint ventures with U.S. companies. He asked for our help to refocus international attention on Somalia. ¶14. (SBU) Jumale asked us that we not misread messages suggesting Somalis do not like Americans. He indicted his willingness to personally support shared solutions to Somalia's problems of peace, security, and stability. He concluded, "For the last twenty years, we have been working interested parties in the Middle East and Asia; we are now ready for a business relationship with the United States." -------------- Recommended Next Steps -------------- ¶15. (SBU) The business leaders proposed concrete ideas for next steps. Mohamed Osman urged us to reach out to the "right" companies as well as community organizations, elders, and the religious community and expand our network of contacts. They asked us to share with them commercial opportunities with the United States. Jumale stated that he and other SBIC members would like to visit the United States and would welcome our efforts to begin by working together on familiarization trips and eventually facilitate trade missions. Participants expressed interest in building direct links between Somali and U.S. businesses, suggesting starting within the Somali diaspora who went to school in the United States and those still living there. ¶16. (SBU) They volunteered to work through the media as well as their business and clan networks to explain U.S. humanitarian efforts in Somalia. The SBIC agreed to disseminate any materials on USG policies and programs in Somalia to its members. Finally, they asked us to re-visit the case of Al-Barakaat, indicating that unfreezing these assets "would go a long way in winning the hearts and minds of thousand of innocent Somalis who have lost their savings." -------------- Comment -------------- ¶17. (SBU) The relationship that we are building with SBIC has great potential. Operating across geographical and clan differences, these businessmen represent the "clan of the dollar." While they operate within their respective clan structures, their business orientation has led to alliances throughout Somalia's clans. Their openness to engage with the USG, especially Jumale, even in light of his terrorist listing and asset freeze, demonstrates a willingness to initiate a new relationship. By focusing on commercial and business interests, we have attracted the attention of persons who can greatly influence Somalia's political process as well. We will be examining how the Department and other USG agencies can facilitate next steps with this powerful set of business leaders. RANNEBERGER