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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