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CONFIDENTIAL CONFIDENTIAL//NOFORN SECRET SECRET//NOFORN UNCLASSIFIED UNCLASSIFIED//FOR OFFICIAL USE ONLY

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### Viewing cable 10RIYADH178, SCENESETTER FOR SECRETARY CLINTON'S FEB 15-16

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Reference ID | Date | Classification | Origin
--- | --- | --- | ---
10RIYADH178 | 2010-02-11 12:12 | SECRET//NOFORN | Embassy Riyadh

`

    VZCZCXRO1411
    OO RUEHBC RUEHDH RUEHKUK RUEHROV
    DE RUEHRH #0178/01 0421223
    ZNY SSSSS ZZH
    O 111223Z FEB 10
    FM AMEMBASSY RIYADH
    TO RUEHC/SECSTATE WASHDC IMMEDIATE 2463
    INFO RUEHEE/ARAB LEAGUE COLLECTIVE IMMEDIATE
    RHMFISS/CDR USCENTCOM MACDILL AFB FL IMMEDIATE
    RUEAIIA/CIA WASHDC IMMEDIATE
    RUEHRH/CHUSMTM RIYADH SA IMMEDIATE
    RUETIJS/CSG JOINT STAFF WASHINGTON DC IMMEDIATE
    RUEKDIA/DIA WASHINGTON DC IMMEDIATE
    RHEHNSC/NSC WASHDC IMMEDIATE
    RUMICEA/USCINCCENT INTEL CEN MACDILL AFB FL IMMEDIATE
    RHEHAAA/WHITE HOUSE WASHINGTON DC IMMEDIATE

` `

    S E C R E T SECTION 01 OF 05 RIYADH 000178

    NOFORN
    SIPDIS

    FOR SECRETARY CLINTON FROM AMBASSADOR SMITH

    E.O. 12958: DECL: 02/10/2020
    TAGS: OVIP PREL PGOV PTER SA YM IR ECON
    SUBJECT: SCENESETTER FOR SECRETARY CLINTON'S FEB 15-16
    VISIT TO SAUDI ARABIA

    Classified By: AMBASSADOR JAMES SMITH
    REASONS 1.4 (B) & (D)

    INTRODUCTION
    ------------

    ¶1. (C) Madam Secretary, Mission Saudi Arabia warmly welcomes
    your visit to the Kingdom, a country which, by virtue of its
    energy resources, financial power, counterterrorism efforts,
    and leadership of the Muslim world, plays a critical role in
    many global and regional issues of importance to us.  Your
    visit comes at a time of emerging opportunities for
    engagement to advance the goals that you and the President
    have laid out in your speeches in the region.

    ¶2.  (C) Our alliance with Saudi Arabia, while complicated and
    subject to occasional disjunctions, has proven durable.
    Taking stock of where we stand, we see a mixed picture. The
    good news is that the Saudi leadership still sees the United
    States as its most important strategic partner and guarantor
    of its stability.  We also share many global and regional
    objectives, including the need for global financial and
    energy stability, a common view of threats posed by terrorism
    and extremism, the dangers posed by Iran and destabilization
    in Pakistan, and the linkage that progress toward Middle East
    peace has to virtually all other regional issues.  Finally,
    Saudi Arabia has become one of our most important allies in
    the fight against Al-Qaida and terror financing.

    ¶3.  (C) The bad news is that we differ on tactics in some key
    objectives, and we are often frustrated by Saudi
    unresponsiveness and a dearth of interlocutors among an aging
    collective leadership. The status of women, religious
    freedom, and human rights are ongoing concerns.  On the Saudi
    side, King Abdullah believes we are not always reliable,
    consistent, or willing to heed his advice on important issues
    such as Iraq. Saud Al-Faisal and others have openly been
    critical of U.S. policies they describe as having shifted the
    regional balance of power in favor of arch-rival Iran.
    Differences of opinion on some of these issues can be
    exacerbated by our differing cultures and value systems,
    which can introduce a degree of skepticism and hesitancy in
    the relationship.

    ¶4. (C) Despite the problems, a negative assessment of the
    bilateral relationship would miss a critical point relevant
    to U.S. goals in the region:  Saudi Arabia is a country in
    transition, and the changes underway present opportunities
    for engagement that can advance U.S. interests and national
    security. Saudi Arabia faces transitions on multiple levels,
    from the geopolitical, where its trade and energy relations
    are shifting from west to east, to economic, where greater
    integration in the world economy is steadily exposing Saudis
    to international best practices.  Domestically, greater
    access to internet and cell phones is unleashing new forms of
    social activism, something demonstrated by an outpouring of
    Saudi spontaneous voluntary assistance in the aftermath of
    the Jeddah floods.

    EDUCATION & DIVERSIFICATION TO COMBAT EXTREMISM
    --------------------------------------------- --

    ¶5. (C) Having faced down what amounted to an insurgency by
    Al-Qaida from 2003 to 2006, Saudi Arabia's leadership
    acknowledged the pressing need for systemic reforms to combat
    extremist ideology and provide for a rapidly expanding
    population (the annual growth rate is about 2 percent).  King
    Abdullah's strategy is two-pronged:  he has attacked the
    roots of the extremism that fed Al-Qaida through education
    and judicial reforms to weaken the influence of the most
    reactionary elements of Saudi Arabia's religious
    establishment.  He is also promoting economic
    diversification.  The King is keenly aware of the urgent need
    to make Saudi education more relevant to today's workplace
    and increase the role of women in the economy, goals which
    remain controversial in this deeply conservative,
    inward-looking desert Kingdom.  Guided by a vision that
    dovetails with some key elements of the President's Cairo
    speech, King Abdullah has begun to implement an ambitious
    plan to transform Saudi Arabia's economy away from excessive

    RIYADH 00000178  002 OF 005

    reliance on hydrocarbons and towards a knowledge-based
    economy that can provide sustainable development for the
    long-term.  Achieving these goals will require nothing short
    of a revolution in the education system and significant
    changes in most aspects of Saudi society, especially the
    status of women.

    ¶6. (U) Seen from the outside, the pace of political reform
    seems glacial (a notable exception is that changes introduced
    after the WTO negotiations have been very fast for any
    country; regulatory agencies are also standing up quickly).
    Yet for certain elements of Saudi society, the changes are
    coming too fast.  Whatever the pace, however, the reality is
    that serious reforms are gradually but irrevocably changing
    Saudi society.  Recently implemented reform measures include
    re-shuffling the Ministry of Education's leadership last
    February (bringing in the King's pro-reform son-in-law as the
    new minister); a top-to-bottom restructuring of the country's
    courts to introduce, among other things, review of judicial
    decisions and more professional training for Shari'a judges;
    the creation of a new investment promotion agency to overhaul
    the once-convoluted process of starting a business here; the
    creation of a regulatory body for capital markets; the
    construction of the King Abdullah University for Science and
    Technology (the country's new flagship and
    controversially-coed institution for advanced scientific
    research); and a substantial budgetary investment in
    educating the workforce for future jobs. The Saudi government
    is also encouraging the development of non-hydrocarbon
    sectors in which the Kingdom has a comparative advantage,
    including mining, solar energy, and religious tourism.  The
    Kingdom's 2010 budget reflects these priorities -- about 25
    percent is devoted to education alone -- and amounts to a
    significant economic stimulus package.

    U.S. PARTNERSHIPS TO SUPPORT
    REFORM & ECONOMIC DEVELOPMENT
    -----------------------------

    ¶7. (SBU) Saudi officials have been candid in stressing the
    importance they place on strong ties with the United States
    to help them meet reform challenges, both through increased
    engagement at the government level, including educational
    exchanges and more FDI, particularly in energy, high tech,
    and manufacturing.  The past year has seen several large
    investments by prominent U.S. firms in advanced technology
    areas, and we are working to raise the profile of our trade
    and investment relations, including through a major Saudi
    exposition in Chicago at the end of April.  The Mission has
    also steadily expanded USG engagement in education, public
    health, science & technology, entrepreneurship, and civil
    society.  There are now more than 22,000 Saudi students
    studying in the US, exceeding pre-9/11 levels.  Public health
    engagement has included breast cancer awareness and CDC
    cooperation to set up an advanced epidemic screening network
    that protected this year,s 3 million Hajj pilgrims.  Our
    Science & Technology umbrella agreement is already expanding
    cooperation, including new projects with NASA. Our MEPI
    programs include a first-time ever exchange visit by a group
    of Saudi judges, leadership development for women, prevention
    of violence against women and children, and youth exchange
    and study. One female participant in our Social
    Entrepreneurship Forum was a finalist in the 2009 Global
    Student Entrepreneur Awards. She and seven other Saudi
    entrepreneurs will attend the President's April summit.
    Mission elements have also provided training to help the SAG
    implement a new law to combat trafficking in persons.
    Intensive engagement with the SAG on IPR is another success
    story.  You will want to congratulate Saudi officials for the
    significant progress Saudi Arabia has made over the last
    several years in improving IPR protection, which resulted in
    the Special 301 Committee deciding to remove Saudi Arabia
    from the Watch List.

    SAUDI STRATEGIC CALCULATIONS
    ----------------------------

    ¶8. (C) TURNING EAST:  Saudi Arabia is trying to come to terms
    with the shift in global energy and trade ties towards Asia,

    RIYADH 00000178  003 OF 005

    which has both political and economic consequences.
    Bilateral trade with China has more than tripled, and China
    will soon be Saudi Arabia,s largest importer.  Saudi Arabia
    has also committed significant investments in China,
    including the $8 billion Fujian refinery.  Increased trade
    has also brought increased friction, including anti-dumping
    complaints from both sides.  Saudi Arabia is thinking through
    how best to take a leaf from the Chinese playbook and use
    these expanded trade ties to achieve important political
    goals.  In this regard, Saudi Arabia has told the Chinese
    that it is willing to effectively trade a guaranteed oil
    supply in return for Chinese pressure on Iran not to develop
    nuclear weapons.

    ¶9. (S/NF) COUNTERING IRAN: We expect that Saudi Arabia will
    continue to develop its ties with China, in part to
    counterbalance relations with the West.  While the King's
    preference is to cooperate with the U.S., he has concluded
    that he needs to proceed with his own strategy to counter
    Iranian influence in the region, which includes rebuilding
    Riyadh-Cairo-Damascus coordination, supporting Palestinian
    reconciliation, supporting the Yemeni government, and
    expanding relations with non-traditional partners such as
    Russia, China, and India to create diplomatic and economic
    pressure on Iran that do not directly depend on U.S. help.
    The King told General Jones that if Iran succeeded in
    developing nuclear weapons, everyone in the region would do
    the same, including Saudi Arabia.

    ¶10. (S/NF) The King is convinced that current U.S. engagement
    efforts with Tehran will not succeed; he is likely to feel
    grimly vindicated in his view by Ahmadinejad's February 11
    boast that having successfully enriched uranium to a level of
    20 percent, Iran "is now a nuclear nation."  The King told
    General Jones that Iranian internal turmoil presented an
    opportunity to weaken the regime -- which he encouraged --
    but he also urged that this be done covertly and stressed
    that public statements in support of the reformers were
    counterproductive.  The King assesses that sanctions could
    help weaken the government, but only if they are strong and
    sustained.  The King will want you to elaborate on the
    President's statement that the time for sanctions has come.
    He will also want to hear our plans for bolstering Gulf
    defenses vis a vis Iran.  (The King has invited General
    Petraeus to his desert camp for discussion on this topic on
    Tuesday.)

    ¶11. (C) CLIMATE CHANGE:  Your visit offers an important
    opportunity to head off a serious clash over climate change.
    Saudi officials are very concerned that a climate change
    treaty would significantly reduce their income just as they
    face significant costs to diversify their economy.  We want
    to get beyond the obstructionism that Saudi negotiators have
    often shown during the negotiations and persuade senior
    leaders to work with us in a partnership to meet their
    strategic concerns, including by cooperating on developing
    solar and biomass energy.  The King is particularly sensitive
    to avoid Saudi Arabia being singled out as the bad actor,
    particularly on environmental issues.  Your conveying the
    importance the President places on working as partners with
    Saudi Arabia on the Copenhagen process will be very important
    in making this dialogue more constructive.  Secretary Chu
    intends to explore specific areas of collaboration during his
    February 21-23 visit.

    SAUDI REGIONAL SECURITY CONCERNS
    --------------------------------

    ¶12. (S) PREVENTING A COLLAPSE OF YEMEN:  Saudi participation
    in international diplomatic efforts to stabilize Yemen
    reflect Saudi fears that instability on its southern border
    is a clear and present danger.  The King will tell you that
    Yemen's strategic location makes an Al-Qaida presence there
    more threatening than in Afghanistan; he will stress the need
    to support Yemeni unity, despite his mistrust of Ali Abdullah
    Saleh.  With respect to Saudi involvement in the war against
    the Houthis, the King will stress that the SAG's motivation
    was self-defense.  As Al-Qaida infiltrators from Yemen
    multiplied, the SAG concluded that the Houthi rebellion had
    distracted Saleh's government to the detriment of Saudi

    RIYADH 00000178  004 OF 005

    security.  The military intervention was triggered by a
    Houthi incursion into Saudi territory, but it presented a
    long-sought excuse to fortify the porous Saudi-Yemeni border.
    On February 7, Prince Khalid also informed Ambassador Smith
    the fighting is wrapping up, and that a ceasefire arrangement
    could be in place by mid-February.

    ¶13. (C) GESTURES AFTER ALL?:  The King appreciates the
    President's commitment to Middle East peace but is skeptical
    the U.S. can bring sufficient and sustained pressure to bear
    on Israel, especially regarding settlements.  The King told
    General Jones that progress on Middle East peace was only
    possible if President Obama was willing to pressure Israel,
    and Saudi officials have rebuffed U.S. requests for
    confidence-building gestures to help restart negotiations.
    Despite their adamant rhetoric, however, several members of a
    private Jeddah-based think tank run by a retired Saudi
    general have very quietly been participating in Track Two
    discussions, apparently with SAG knowledge, and even put
    forward a proposal on Gaza.  In a more dramatic public
    encounter that has provoked commotion in the region, former
    Saudi Ambassador to the U.S. Prince Turki Al-Faisal shook
    hands with Israeli Deputy FM Ayalon to settle a dispute over
    joint seating at a Munich conference. Both sides have since
    insisted the gesture did not signal changes in policy, with a
    "senior Saudi diplomat" issuing a statement emphatically
    denying that the incident constituted any form of recognition
    for Israel.

    ¶14. (S/NF) AFGHANISTAN/PAKISTAN:  King Abdullah firmly
    believes that Asif Zardari is the primary obstacle to the
    government's ability to move unequivocally to end terrorist
    safe havens there ("when the head is rotten, it affects the
    whole body").  The King told General Jones that U.S.
    development assistance would rebuild trust with the Army,
    which he asserted was staying out of politics in deference to
    U.S. wishes, rather than doing what it "should."  On
    Afghanistan, the King has expressed support for the new U.S.
    strategy, saying that spending on roads, schools, hospitals
    and mosques would dissipate popular mistrust and help rebuild
    the country.  The King has not yet acknowledged the Saudi
    role in Taliban mediation in conversations with USG
    officials; GIP Director Prince Muqrin has explained to
    several recent USG visitors that the SAG prefers to keep such
    discussions in intelligence channels until any agreement is
    reached.  Perhaps reflecting this, the Saudi media downplayed
    President Karzai's recent visit and the Afghan Ambassador
    reported that the meeting with the King lasted only ten
    minutes.

    A NOTE ABOUT THE KING
    ---------------------

    ¶15. (C) The Custodian of the Two Holy Mosques will offer you
    a traditional Saudi welcome at the desert "encampment"
    outside Riyadh, where he likes to spend his winter vacations.
     You will find in 86-year old King Abdullah a wry and
    forthright interlocutor.  Having struggled with a speech
    impediment throughout his life, he tends to express himself
    tersely.  Reflecting his Bedouin roots, he judges his
    counterparts on the basis of character, honesty, and trust.
    He expects commitments to be respected and sees actions, not
    words, as the true test of commitment; and he expects
    good-faith consultations, not surprises.  Once the King has
    lost trust in a counterpart, as has been the case with Nouri
    Al-Maliki or Asif Zardari, his personal antipathy can become
    a serious obstacle to bilateral relations.  On the other
    hand, as with President Obama, the King's esteem will help
    navigate differences and at times change policies.  The King
    is undoubtedly looking forward to his discussions with you,
    and Mission Saudi Arabia enthusiastically looks forward to
    supporting your visit.

    MISSION STAFFING
    ----------------

    ¶16.  (U) The U.S. Mission in Saudi Arabia includes Embassy
    Riyadh, and Consulate Generals Dhahran and Jeddah.  The
    entire Mission, representing ten agencies, consists of 605
    staff (212 U.S. Direct Hire (USDH) and 393 Locally Engaged

    RIYADH 00000178  005 OF 005

    (LE) staff).
    SMITH

`