UAE'S IRAQI DEBT FORGIVENESS ON HOLD

S E C R E T ABU DHABI 000087 SIPDIS NOFORN STATE FOR NEA/I AND NEA/ARP AMEMBASSY ANKARA PASS TO AMCONSUL ADANA E.O. 12958: DECL: 2020/02/20 TAGS: PGOV EFIN PREL IZ AE SUBJECT: UAE'S IRAQI DEBT FORGIVENESS ON HOLD CLASSIFIED BY: Richard G. Olson, Ambassador; REASON: 1.4(B),(D) ¶1. (S/NF) Summary: Foreign Minister Sheikh Abdullah bin Zayed told the Ambassador and visiting Treasury Deputy Secretary Wolin on February 15 that the UAEG has decided to postpone any final action on Iraqi debt forgiveness until after the March 7 elections. On other issues, the MFA reports the UAEG will provide security and intelligence support for the GOI in advance of the elections. One MFA official noted UAEG concern about recent staffing changes at the Iraqi Embassy in Abu Dhabi. The former Iraqi charge claims FM Zebari is replacing Sunni personnel in the Gulf with Kurds in advance of the elections. End Summary. DEBT FORGIVENESS ON HOLD -------------- ¶2. (S) During a February 15 meeting with visiting Treasury Deputy Secretary Wolin and the Ambassador (other issues reported septel) that the UAE had put its Iraqi debt forgiveness efforts on hold until after Iraq's March 7 elections. AbZ said he would likely sign the final paperwork to complete the process, although he noted that he would need to be designated to sign the documents on behalf of the Government of Abu Dhabi, which holds all of the debt (to the best of the UAE's knowledge). ¶3. (S) MFA Director of Legal Affairs Abdullah Al Naqbi previewed the decision in a February 11 with EconOff. Al Naqbi said the official story is that the UAE is still reviewing the file, but "between friends" he could confirm that the UAE is awaiting the election outcome. He said the UAE was frustrated with the debt forgiveness effort, as Iraq had never provided any of the requested information about UAE debt obligations. Although the UAE had found that the Abu Dhabi Department of Finance and some Abu Dhabi banks held Iraqi debt totaling approximately $7 billion, Iraq had never confirmed, documented or refuted that total. OTHER SUPPORT CONTINUES -------------- ¶4. (S) While not specifying the UAE's concerns about the elections outcome (a decision that would be taken high above his paygrade), Al Naqbi said the UAE was carefully watching Iraqi actions in advance of the election. He confirmed that the UAE had recently signed an agreement to provide the GOI with military personnel and equipment (e.g. radars) to support the elections. Al Naqbi said the offer was made in the context of the UAE-Iraq joint military-intelligence commission. (Note: Separately, Abu Dhabi Shipbuilding (ADSB) told the Ambassador on Feb. 11 that the UAE Armed Forces has donated 24 ADSB RIBS to the "Iraqi Riverine Force." End Note.) In response to EconOff's question, Al Naqbi said the UAE Ambassador to Iraq remains on the ground and is not reporting any concerns about GOI access. EMBASSY STAFF REMOVED -------------- ¶5. (S/NF) Al Naqbi added that the UAE had noted, and intel forces had prepared a report on, the recent staffing changes at the Iraqi embassy in Abu Dhabi. Al Naqbi said the embassy used to be staffed with Sunnis, "like the Iraqi community here," but that many of those officials had departed. ¶6. (S/NF) On January 28, PolOff met with Iraqi ChargC) D'Affaires (Third Secretary) Ahmed Hussain Jaber and two new Iraqi Political Officers, none of whom seemed particularly well-informed or had ever been to the UAE MFA. Previous ChargC) Intisar Abbas, who was abruptly called back to Baghdad in mid-January, told PolFSN that Jaber will soon be replaced by FM Zebari's brother-in-law. Abbas alleged that Zebari is replacing many diplomats in the region with Kurds in the run-up to March elections. ¶7. (S) Comment. The decision to hold off on final debt forgiveness (after almost two years) is likely indicative of the UAE's concern over Iraq's sectarian politics, and broader wariness about Iranian influence in Iraq. End Comment. OLSON