Tuesday, May 26, 2009

France's first Gulf military base

ABU DHABI, United Arab Emirates – French President Nicolas Sarkozy opened his nation's first military base in the Gulf Tuesday, boosting the naval presence along strategic oil routes and in pirate-infested waters off the Somali coast.

The new naval base outside the United Arab Emirates' capital, Abu Dhabi, is France's first major foreign military installation since the 1960s and its first outside Africa. It is expected help safeguard vital Persian Gulf shipping lanes. It also puts France in position to play a higher profile role in calming the growing tensions between Iran and Gulf Arab states.

Some of the most pressing missions, however, may come off the coast of Somalia. Pirates have expanded their assaults on ships in the Gulf of Aden farther into the Indian Ocean. Somali pirates have attacked more than 80 ships this year alone in the Gulf of Aden, and successfully hijacked about 30 of them.

The United States remains the major foreign military presence in the Persian Gulf with key air bases, logistics operations and the headquarters of the 5th Fleet in Bahrain.

At a ceremony Tuesday, Sarkozy watched the French and UAE flags being raised over the naval base as forces from both nations stood at attention.

France is also seeking a bigger role in the region's culture and business.

Sarkozy's two-day trip includes a visit to the future site of a branch of the Louvre. The arm of the French art museum will be part of a cultural and residential district being built in Abu Dhabi. The city also hosts a branch of France's Sorbonne University, and is set to receive outposts of New York University and the Guggenheim Museum.

In light of all these new projects, Sarkozy called the oil-rich UAE "a laboratory for globalization." He is pushing a deal for the UAE to purchase twin-engined Rafale fighter jets and supports the Emirates' push to develop civilian nuclear power plants.

"Nuclear power is not the sole prerogative of Western states," Sarkozy said.

President Barack Obama approved plans for the U.S. to help the UAE become the first Arab nation with a nuclear power industry last week, though Congress could still try to block the deal. U.S. companies are expected to compete against ones from France, Japan and Russia for a share of the $41 billion project.

In a speech to French military personnel and diplomats, Sarkozy also focused on the importance of economic stability, urging oil-rich nations and industrial powers to work to stabilize world oil prices. He noted that the global economy cannot afford major price swings while it works to recover from the economic downturn.

Sarkozy did not give a target price range, but he said he wanted to work with the Emirates, an OPEC member, and others to lower volatility in oil markets.

The French president said high prices undermine growth, but low prices "sow the seeds" of future shocks by discouraging investment in other investment technologies, including nuclear power.

Oil prices have rebounded significantly from lows near $30 a barrel earlier this year, but remain about 60 percent below the record $147 level they hit last July. Crude now sells at about $60 a barrel — above the level the UAE needs to balance its budget but below what some fellow OPEC members consider to be a fair price.

Sarkozy's visit also sought to forge strategic commercial alliances between one of Abu Dhabi's government-backed investment vehicles and France's newly created strategic investment fund.

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