SCENESETTER FOR UNDER SECRETARY KENNEDY'S JULY

UNCLAS SECTION 01 OF 03 RIYADH 000949

SENSITIVE
SIPDIS

FOR UNDER SECRETARY KENNEDY FROM AMBASSADOR ERDMAN
DEPT PASS TO UNDER SECRETARY FOR MANAGEMENT

E.O. 12958: N/A
TAGS: AMGT ABLD ASEC CMGT CVIS CASC ECON PREL SA
SUBJECT: SCENESETTER FOR UNDER SECRETARY KENNEDY'S JULY
25-27 VISIT TO SAUDI ARABIA

INTRODUCTION
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1. (SBU) Embassy Riyadh warmly welcomes you to the Kingdom.
Saudi Arabia remains an important strategic U.S. ally by
virtue of its energy resources, geographic location,
counterterrorism role, and leadership within the Muslim
world. The Al Saud see the United States as their most
important strategic partner and guarantor of their security.
In addition, we have many shared objectives on global and
regional issues, including global financial and energy
stability, combating threats posed by terrorism and
extremism, the urgent need for progress towards Middle East
peace, and addressing the dangers posed by Iran and
destabilization in Pakistan.


2. (SBU) Our work in the Kingdom requires a fully-staffed
embassy with the resources necessary to maximize Saudi
cooperation on facilities security, counterterrorism, and a
range of political and economic issues. The importance of
Saudi Arabia's role is reflected in the number of non-stop
VIP visitors to the Kingdom, all of which require logistical
and substantive support. In the past two months alone we
have hosted the President, Defense Secretary Gates, Treasury
Secretary Geithner, Special Envoys / Representatives
Mitchell, Ross, and Holbrooke, General Petraeus, a CODEL, and
numerous other officials. Beyond Riyadh, Jeddah is the de
facto seat of government in the Kingdom for three months
every summer, placing an enormous burden on the resources of
our Consulate General, which supports numerous senior U.S.
visitors during this period. In this respect, it functions
as much more than a traditional consulate, and resource
decisions need to take this into account.


3. (SBU) While the security situation in the Kingdom remains
fragile, it has improved dramatically over the past five
years. The Saudi government now fully understands the direct
threat to the Kingdom posed by Al Qaeda -- which was not the
case before 2003 -- and due to the government's increased
vigilance and counterterrorism cooperation, there has been no
significant terrorist incident in the Kingdom since early

2007. We welcome the Department's recent decisions to extend
the length of tours in the Mission to two years and to allow
the return of all family members to Dhahran and of certain
family members to Riyadh and Jeddah. As we move to two-year
tours, this will have an important bearing on our ability to
ensure we have the staff we need to fulfill our critical
mission. I look forward to discussing with you ways we can
ensure positions in Riyadh and Jeddah continue to receive
qualified bidders with two-year tours taking them away from
their school-age children for a longer period of time. End
introduction.

CHALLENGES WITHIN THE MISSION
--------------


4. (SBU) A few basic facts first: country-wide, we have 468
U.S. personnel, including 305 U.S. military. The Embassy has
a budget of $22 million (combined ICASS and Program),7
agencies, 112 U.S. employees, and 215 Foreign Service
Nationals. Jeddah has a total of 143 employees (29 U.S. and
114 local). Dhahran has 105 employees (22 U.S. and 83
local). Unlike most embassies outside the Gulf, the local
employees are almost entirely third country nationals and
this poses a unique set of problems.


5. (SBU) You will be meeting with the Embassy's local staff,
almost all of whom are non-Saudi, but who are hired locally
and therefore not considered third-country nationals for
employment purposes. However, most maintain strong ties to
their home countries, creating a dichotomy which hurts
morale. Their main concerns include the lack of a
comprehensive retirement plan (as they are not eligible to
enroll in the Saudi social security scheme); their desire for
an education allowance for their children; concerns about how
the homeward passage (similar to an R&R) program is
administered; and the inclusion of family members over 23
years old in their health insurance policy. They are also
concerned that recent pay increases are not keeping pace with
inflation. In 2008 they received a 2.9 percent raise while
inflation was 9.2 percent.


6. (SBU) Vacancies in Post's eligible family member (EFM)
positions remain a source of concern. Currently five of nine
positions in Riyadh and one of two positions in Dhahran are
unfilled. Most of Riyadh's current EFMs are slated to depart
in the next few months, with only one replacement identified
to date. We expect the Department's recent relaxation of the

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Mission's unaccompanied status may ease this situation, but
encourage you to consider further accommodations such as
permitting the return of home-schooled children or children
who would board elsewhere, such as in Bahrain.

LIMITED CONSULAR RESOURCES, EXPANDED WORKLOAD
--------------


7. (SBU) Year-on-year visa adjudications are up 40 percent
this year, finally surpassing pre-9/11 levels for the first
time this past June. The bulk of these are for business,
tourism, and study, with almost 19,000 Saudi students (plus
their family members) currently in the U.S. Security
advisory opinions, required in around 40 percent of all visa
cases, remain the biggest impediment to the smooth and
efficient adjudication of visas. In addition to visa issues,
we are working with American citizens on a range of concerns,
including child custody and refugee cases (especially
problematic given the lack of rights accorded to women and
children and which generate strong Congressional interest)
and visa reciprocity. Despite our 2008 agreement with the
Kingdom, Saudi authorities rarely grant the five-year
multiple-entry visas which Americans are authorized. We
continue to engage Saudi authorities on these issues at all
appropriate levels.

EVOLVING SECURITY ENVIRONMENT
--------------


8. (SBU) The security environment in the Kingdom has improved
significantly since 2003 - 2004, when Al Qaeda attacks
peaked. Saudi security forces have dramatically improved
their training, equipment, and intelligence gathering
capabilities. They have hardened likely targets, captured or
killed almost 3,000 terrorists, and continue to make the
Kingdom a hostile environment for both indigenous and
transnational terrorism. That said, the security situation
here remains fragile. Al Qaeda in the Arabian Peninsula
issued a statement this past January in which it announced
its intentions to continue targeting the Kingdom's
government, its infrastructure, and Westerners. The Kingdom
is ground zero for three of Al Qaeda's key global objectives:
toppling the Al Saud, seizing control of the two holy cities
of Mecca and Medina, and deepening the international
financial crisis by interrupting Saudi oil exports.

PROTECTING ENERGY INFRASTRUCTURE
--------------


9. (SBU) In May 2008, the Secretary and the Saudi Interior
Minister signed a Technical Cooperation Agreement (TCA)
creating the Office of Program Management - Ministry of the
Interior (OPM-MOI). OPM-MOI is a State-led interagency
effort to assist the Saudi Interior Ministry (MOI) with
protection of critical infrastructure. Interagency partners
currently include the departments of Defense and Energy. DOD
is contributing expertise in training and is equipping a new
35,000-man MOI security force that will protect critical
infrastructure sites. DOE is assisting MOI by conducting
critical infrastructure vulnerability assessments and by
providing technical assistance. To date, four agreements
have been signed with the SAG to fund this program. We are
waiting on $37 million in Saudi funds to be transferred --
imminently we are told -- from the Ministry of Finance to
OPM-MOI's U.S. Treasury Department bank account.


10. (SBU) Other significant OPM-MOI activities include
assisting MOI to develop a diplomatic security equivalent,
cyber security assistance, providing bilingual technical
experts to MOI, maritime critical infrastructure protection,
and border security. This is a long-term and path-breaking
form of engagement with the SAG (and with any country, for
that matter),and other USG interagency partners will soon be
assisting the program.

DHAHRAN: WHERE TO MOVE?
--------------


11. (SBU) Our Consulate General in Dhahran, where you will be
traveling on the second leg of your visit, is in negotiations
with the SAG for a new Consulate site. Although the
Consulate would prefer to build its new office building and
staff housing on the existing site, the SAG has indicated
that the adjacent university would like to expand, and
proposed relocating the Consulate elsewhere. The Ministry of
Foreign Affairs has identified two possible sites (which you
will get a chance to visit) and we have proposed a third,
which they are still considering. Our lease on the existing

RIYADH 00000949 003 OF 003


site expires in 2016. This is further complicated due to the
existence of the International School (Dhahran Academy) that
is co-located on the existing Consulate property.


12. (SBU) Although somewhat recovered in recent years, CG
Dhahran still faces an acute staffing shortage. With 22
Americans and 83 local staff, and only one (entry-level)
officer covering political and economic issues, the consulate
needs the deputy principal officer position reinstated to
assist with post management and reporting. We recently
reinstated full consular operations in Dhahran after a
fifteen year hiatus, but have been relying on TDY staff from
Riyadh to meet substantial demand for these services. This,
together with the fact that there are 13,000 American
citizens in the Consulate's district requiring various
citizen services, places a burden on the existing staff. To
help alleviate this, the one un-filled consular position that
has been approved by CA should be staffed as soon as
possible. Post is also in need of a second ARSO position.
ERDMAN