Identifier
Created
Classification
Origin
09ABUDHABI126
2009-02-02 11:49:00
SECRET//NOFORN
Embassy Abu Dhabi
Cable title:  

THE BOBCAT AND THE CAGED LION - THOUGHTS ON THE UAE AND IRAN

Tags:  PREL PARM KNNP IR AE 
pdf how-to read a cable
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FM AMEMBASSY ABU DHABI 
TO RUEHC/SECSTATE WASHDC PRIORITY 2089 
INFO RUCNIRA/IRAN COLLECTIVE 
RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE 
RHMFISS/JOINT STAFF WASHINGTON DC 
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RHMFISS/HQ USCENTCOM MACDILL AFB FL
S E C R E T SECTION 01 OF 04 ABU DHABI 000126 

NOFORN
SIPDIS

E.O. 12958: DECL: 02/02/2023
TAGS: PREL PARM KNNP IR AE

SUBJECT: THE BOBCAT AND THE CAGED LION - THOUGHTS ON THE UAE AND IRAN

REF: 97ABU DHABI3777

Classified by Ambassador Richard Olson, reasons 1.4 (b) and (d).


S E C R E T SECTION 01 OF 04 ABU DHABI 000126

NOFORN
SIPDIS

E.O. 12958: DECL: 02/02/2023
TAGS: PREL PARM KNNP IR AE

SUBJECT: THE BOBCAT AND THE CAGED LION - THOUGHTS ON THE UAE AND IRAN

REF: 97ABU DHABI3777

Classified by Ambassador Richard Olson, reasons 1.4 (b) and (d).



1. (U) This is a joint cable from Dubai, Abu Dhabi, and the Iran
Regional Presence Office.

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


2. (C) Iran has previously been compared to a caged lion (reftel).
Its immediate neighbor to the South is more like a bobcat: a potent
fighter for its size, sharp of tooth and ready to defend its den, but
fundamentally unprepared to provoke the bigger cat, wary in the
knowledge that someday the lion may get out of its cage. The bobcat
is less timid when it is certain that it has even larger cats on its
side, but it still doesn't taunt the caged lion.


3. (C) Getting past animal analogies, the United Arab Emirates is
bound by geography and history to a close relationship with Iran.
Strategically, the leadership of the UAE sees the Iranian threat in
much the same terms as we do (albeit its concerns about regional
hegemonic ambitions are perhaps even stronger than about nuclear
proliferation),but will always be cautious about taking
confrontational action (especially public action) that goes beyond
the letter of Security Council Resolutions. As the USG reviews our
policy toward Iran, it will be critical that we keep the UAE (and
other Gulf partners) apprised of our thinking. Any perception that
the U.S. is "softening" on Iran, may (out of strategic necessity) be
met with a much magnified UAE "softening." And since the UAE plays a
vital role in maintaining effective sanctions, we should work to keep
them on side. End Summary.

Introduction
--------------


4. (S/NF) Iran looms large in many of the key issues at play in the
U.S.-UAE relationship. Our counter-proliferation and
counterterrorism finance efforts primarily focus on containing the
threat Iran poses, including by preventing its acquisition of nuclear
weapons. Our recent arms sales to the UAE focus largely on
missile-based threats and we share concerns about Iran's influence in
Iraq and the region, including vis-a-vis Hamas and Hizballah. We
each reject Iran's threats to close the Straits of Hormuz if

confronted and decry its refusal to engage the UAE over territorial
disputes in the Gulf. Despite this synergy of interest, our
approaches differ considerably, especially given the UAE's $14
billion trading relationship with Iran. Our diplomatic efforts to
develop a joint Iran policy must acknowledge the UAE's bottom line:
it will not openly confront its large and ambitious neighbor and risk
destabilizing its own strategic interests -- both economic and
political. The UAEG, and in particular Dubai, with its longstanding
cultural and economic ties with Iran, will continue to walk a fine
line between engagement and criticism of Iran's threatening behavior.

Mutual Attractions
--------------


5. (C) President Sheikh Khalifa bin Zayed Al Nahyan told former
President Bush (Bush 41) in 2006 that UAE engagement with Tehran is
"a fact of geography." Iran towers over the UAE in both size and
population and, as Foreign Minister Abdullah bin Zayed told us
recently, this leaves the UAE with "no other choice" than to engage
at some level. Ties between the countries are significant, as the
UAE is home to perhaps 200,000 Iranians (estimates range from 150,000
to as high as 400,000 resident Iranians) who are active in trading,
commerce, and real estate. Immigration and marriages through
generations have linked these coastal neighbors. Diplomatic
relations are cordial, but not necessarily warm, and include periodic
senior official visits. Iranian President Ahmedinejad visited the
UAE in May 2007 and both Dubai and Abu Dhabi leaders have been to
Tehran in 2008.


6. (C) Although UAE-Iran trade may be slown down after years of
rapid expansion, Dubai remains the hub through which Iran accesses
the global economy (UAE investment in Iran is minimal). Official
UAE-Iran non-oil trade (including re-exports) increased from USD 2.04
billion in 2001 to USD 7.35 billion in 2007. According to Dubai
Chamber of Commerce estimates based on certificates of origin, Dubai
Chamber of Commerce members' exports to Iran declined by 15.4 percent
in third quarter 2008 compared to third quarter 2007 (Dubai Chamber
members' exports overall increased by 25 percent during that period).
Trade by traditional dhow continues, although higher-end commerce
now takes the form of containerized shipping. UAE telecom major
etisalat recently won a USD 1.5 billion award for a mobile network in
Iran.


Mutual Distractions
--------------


7. (S/NF) Three issues tend to resonate through UAEG diplomatic
views of Iran: 1) disputed islands in the Gulf, 2) Iran's nuclear
program, and 3) concerns of Iran seeking regional hegemony (often
described as reviving the "Persian Empire," a reference to the
1501-1722 AD Safavid era during which Iran was converted to Shi'a
Islam). The nexus between the second two concerns is particularly
troubling for UAE leaders -- a nuclear neighbor with hegemonic
ambitions. Also of concern to the UAEG is how the U.S. and its
European allies deal with Iran; they fear both Western engagement
with Tehran that might play into Iran's hegemonic goals without
reference to Gulf equities, and Western military action against
Iran's nuclear program that might invite Tehran's retaliation against
the proximate targets of the Gulf. Indeed, the UAEG feels it must
walk a fine line on Iran policy.


8. (C/NF) Disputing claims to three islands in the Arabian Gulf date
back to pre-federation days in 1971 (and the Arabian/Persian Gulf's
name itself is a matter of some dispute). Abu Musa and the Greater
and Lesser Tunb, have remained under the de facto control of Iran --
including military installations -- since the British relinquished
control of the Trucial States. That status quo arrangement (which
Iran arguably imposed upon the small emirate of Sharjah before the
UAE federation was formed) has held firm despite rhetorical and
diplomatic flourishes by the UAEG over the years (see also para 12
for Iran's views on the dispute). The August 2008 announcement of
new offices on the island of Abu Musa -- a marine rescue center and a
ship registry office -- brought the debate back to the fore. UAE
links to the islands are maintained by a limited resident population
(estimates vary widely between a mere handful and a few thousand) and
frequent reminders in the diplomatic arena (the UN, GCC, and Arab
League paramount among them) that the UAE seeks arbitration by the
International Court of Justice (ICJ). President Khalifa reiterated
in a National Day message in December 2008 that the UAE is willing to
accept any ICJ decision but will not forget the dispute until it is
properly arbitrated (albeit through cooperation and not
confrontation). Iran shows no inclination of agreeing to ICJ
arbitration. The location of the islands near the Straits of Hormuz
adds to their strategic value. The U.S. has endorsed the concept of
peaceful arbitration but generally stayed out of the competing
territorial claims; the UAE has not asked us to endorse its claim,
but might appreciate consultations on the matter if we were ready to
rethink our position.


9. (S/NF) The UAEG often voices its concern regarding Iranian
influence in Iraq, and has a clear disdain for Tehran's support for
extremist causes like Hamas and Hizballah. Despite cordial
diplomatic ties, Iran's "superpower" and, especially nuclear,
ambitions are the focus of the UAE's defense policy. (Note: Iran is
only 46 seconds from the UAE as measured by the flight time of a
ballistic missile. End note.) The UAE's senior defense strategist,
Abu Dhabi Crown Prince and Deputy Supreme Commander of the UAE Armed
Forces Mohammed bin Zayed (MbZ),who refers to Iran as an
"existential threat," argued to an American visitor on December 14
that without the U.S. Navy's presence in the Gulf, we would be
dealing with "one oil producer" (as Iran would swallow up everything
it could to consolidate its power). While the UAE leadership seems
convinced of Iran's determination to obtain nuclear weapons, it
prefers not to express this concern too publicly and seeks close
coordination with P5+1 negotiators. (The UAE is pursuing its own
peaceful nuclear program with clear proliferation-resistant protocols
designed to distinguish it from Iran's approach.) Militarily, the
UAE is concerned about getting caught in the crossfire if Iran is
provoked by the U.S. or Israel. At the same time, the UAE views its
fleet of Block 60 F-16 aircraft (the most advanced version developed)
as a significant contribution to deterrence of Iran. Equipped with
conformal fuel tanks, advanced electronic warfare countermeasures,
and weaponry such as JDAMs, the F-16s are clearly designed to be able
to inflict damage well beyond the UAE's borders, as are their Mirage
2000-9 fighters and Black Shaheen cruise missile.


10. (S) MbZ recently scoffed at Iran's overly confident
self-perception, as characterized by Ministry of Intelligence and
Security Chief Qolan Hosein Mohseni-Ejei's comments that Iran's
economic system was destined to replace capitalism. MbZ and others
worry, though, about the implications if Iran actually believes its
own propaganda. AbZ told State Acting U/S John Rood in November that
lower oil prices should limit Iran's ability to destabilize the
region but that Iran might "hide behind the crisis" and disguise its
nefarious transactions while regulators focused elsewhere. These two
voices from the Abu Dhabi leadership show disdain for the economic
confidence of a (politically volatile) neighbor which is dependent on
trade with Dubai. The UAE also views resident Iranians as an
internal threat prone to manipulation by Tehran, and has taken
unannounced steps to reduce Iran's footprint (i.e., reducing the
numbers of UAE visas for Iranians). This move has clearly been
noticed by Tehran and has provoked public scolding as un-neighborly.
The October announcement that the UAEG would guarantee deposits with
foreign banks with substantial operations in the UAE appears to
exclude smaller Iranian banks, perhaps a message to Iran that
business is less "usual" these days. A new ID card requirement for
foreign residents also has the side effect of enhancing UAEG ability
to monitor foreign populations; we deduce from MbZ's statements that
the UAE keeps a close eye on the activities of the resident Iranian
community.

How Iran views the UAE
--------------


11. (S/NF) Iran takes its relationship with the UAE seriously,
particularly given the UAE's increasing role in U.S. security and
counterproliferation policy. In 2007, Iran assigned a former Deputy
Foreign Minister and Spokesman, Hamid Reza Asefi, as Ambassador to
the UAE. Also in 2007, President Ahmadinejad visited both Abu Dhabi
and Dubai (a first for an Iranian head of government since the
revolution) and made a rare public address to the Iranian community
in Dubai. Iranians in the UAE represent Iran's largest expatriate
population outside the U.S., and the Iranian government keeps a close
eye on them. This scrutiny has increased considerably since 2006
with the opening of the State Department's Iran Regional Presence
Office (IRPO) in Dubai, which the IRIG continues to consider a
Washington outpost for fomenting regime change in Iran. With regime
survival always paramount, Iran devotes considerable intelligence
resources in the UAE to ensure that Iranians (both resident and
transient) cannot use the UAE as a base to organize a (potentially
well-financed and globally integrated) opposition movement, and so
that they think twice before engaging with IRPO or other Western
official interests here.


12. (S/NF) On the bilateral front, Iran has focused on expanding
commercial ties, while downplaying UAE claims on the three islands.
According to Iran, the islands were ceded back to Iran by Britain in
1971, in exchange for Iran renouncing its claim on Bahrain. Iran has
occasionally dropped hints, most recently in early 2008, that any GCC
pressure on the islands might force Iran to revisit this Shah-era
deal, and possibly revive its claim on Bahrain. Such implicit
threats on single GCC members are a favorite Iranian method of
blunting GCC security cohesion and cooperation with the U.S. In
Iranian strategic thinking, the three islands dispute is a minor
issue, unless the U.S. were to get involved more directly in support
of the UAE claim -- perhaps in exchange for basing rights on the
island once wrested from Iranian control.


13. (S/NF) Iranians view Dubai as a safety valve for capital, social
freedom, artistic expression, and entrepreneurship. As noted above,
Dubai has served as Iran's primary conduit to the global economy.
This siphoning of Iranian capital and talent is not unique to Dubai,
nor to current regional conditions. But perhaps no other country has
benefited more from Iran's continued poor governance and
international isolation than the UAE. Given Dubai's virtually unique
role, however, should the UAE act to close this safety valve,
immediate pressure would build inside Iran with unpredictable
consequences for U.S. and UAE interests. The status quo of cautious
accommodation persists for good reasons.

Implications for U.S. goals
--------------


14. (S/NF) As USG policy on Iran evolves, we should consult closely
with the UAEG, which worries U.S. plans vis-a-vis Iran could provoke
its unpredictable neighbor, or bolster its confidence. Coastal and
sea-based infrastructure -- including key oil, power, and water
desalination facilities -- are particularly vulnerable to seizure or
attack. We should especially finesse those rare moments when we
engage both the Abu Dhabi and Dubai leadership together -- usually
limited to POTUS and VPOTUS level visits -- to press for a more
united Abu Dhabi/Dubai approach and to ensure that the UAEG
understands U.S. intentions. Abu Dhabi has pressed for closer
consultations with the P5+1, nervous that the EU's Javier Solana
negotiates with incentives (potentially to include security
guarantees) that the GCC has not been privy to.


15. (S/NF) Despite its non-confrontational stance, the UAEG has an
export control law which facilitates its adherence to UN Security
Council Resolutions on Iran (1737, 1747, and 1803). Still, it could
be more proactive in seeking out shipments of restricted cargo and
more aggressive in recognizing that dual use goods are often as
dangerous as items that are banned outright. AbZ and other senior
UAE officials have frequently asked that we use the UAE as a "last
resort" and focus on stopping shipments elsewhere before they reach
the UAE -- unrealistic in our view given the enormous volume of goods
shipped and traded through the UAE. With Dubai being Iran's largest
non-oil trading partner and often the last foreign stop for vessels
bound for Iran, a strong UAE commitment to countering proliferation
is essential. We must continue to play to the UAE's desire to be a
global player in nonproliferation and counter terrorism finance, and
in particular urge a more proactive approach to ensuring activities
of Iranian banks in the UAE, and UAE banks in Iran, are not used by
the Iranian government to support illicit trade.


16. (S/NF) We agree with our UAE interlocutors that our dialogue on
Iran should go far beyond WMD and terrorism. A broader strategic
dialogue that includes acknowledgment of the UAE's legitimate trade
interests and highlights Iran's destabilizing activity in the region
could help convince the UAE of the need to take a greater leadership
role in the international community's efforts to contain Iran. As
part of this effort, helping the UAE satisfy its need for a credible
defense architecture, particularly against Iranian missiles, is one
way to continue to influence UAE decision-making. Depoliticizing the
sale of defensive weapons systems (PAC III, THAAD) and expediting
delivery also reaffirms our overall credibility as a defense partner.


17. (S) Bottom line for UAEG: As a small, young, vulnerable, rich
country, the UAE has long since decided that it cannot afford to be
confrontational with its much larger and militarily ambitious
neighbor. It sees prosperity and survival as hinging upon
maintenance of cordial regional relations, as much as it does on
reinforced military ties with the U.S. and other partners (many have
varying degrees of military presence here). We should bolster its
confidence in its own ability to stand up to Iran by frequent
consultations, continued defense cooperation, broader engagement, and
reminders that counter proliferation and counter terrorism finance
are not favors to the U.S., but critical elements of countering the
"existential" threat Iran poses. As an added advantage, maintaining
our close partnership with the UAE best enables us to take advantage
of its proximity to Iran and its resident Iranian population to
deepen our understanding of and engagement with the Iranian people.

OLSON