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Cablegate: Somalia - Business and Investment Council Shares U.S.

VZCZCXRO3507
PP RUEHDE RUEHROV RUEHTRO
DE RUEHNR #2553/01 3101120
ZNR UUUUU ZZH
P 051120Z NOV 08
FM AMEMBASSY NAIROBI
TO RUEHC/SECSTATE WASHDC PRIORITY 7535
INFO RUCNSOM/SOMALIA COLLECTIVE PRIORITY
RUCPDOC/USDOC WASHDC 3086
RUEATRS/DEPT OF TREASURY WASHDC
RHEHNSC/NSC WASHDC
RUEKDIA/DIA WASHDC
RUEAIIA/CIA WASHDC
RHMFIUU/CJTF HOA
RHMFIUU/CDR USCENTCOM MACDILL AFB FL

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

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Summary
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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.

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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.

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Rebuilding Somalia
------------------

12. (SBU) Jumale offered the example of Somalis creating and

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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."

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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

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