Identifier
Created
Classification
Origin
02AMMAN3044
2002-06-10 08:41:00
CONFIDENTIAL
Embassy Amman
Cable title:  

JORDAN'S ECONOMIC OLD GUARD FLEXES MUSCLES

Tags:  ECON ETTC ETRD IZ JO 
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This record is a partial extract of the original cable. The full text of the original cable is not available.
C O N F I D E N T I A L SECTION 01 OF 02 AMMAN 003044 

SIPDIS

E.O. 12958: DECL: 06/10/2012
TAGS: ECON ETTC ETRD IZ JO
SUBJECT: JORDAN'S ECONOMIC OLD GUARD FLEXES MUSCLES

REF: A. AMMAN 1721

B. AMMAN 2334

Classified By: Ambassador Edward W. Gnehm, reasons 1.5 (b,d)

-------
SUMMARY
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C O N F I D E N T I A L SECTION 01 OF 02 AMMAN 003044

SIPDIS

E.O. 12958: DECL: 06/10/2012
TAGS: ECON ETTC ETRD IZ JO
SUBJECT: JORDAN'S ECONOMIC OLD GUARD FLEXES MUSCLES

REF: A. AMMAN 1721

B. AMMAN 2334

Classified By: Ambassador Edward W. Gnehm, reasons 1.5 (b,d)

--------------
SUMMARY
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1. (c) Anti-normalization, pro-Iraq, and anti-reform
elements in Jordan's business community are trying to
re-establish themselves in the kingdom's economic
decision-making arena. These recidivist groups have been
encouraged by an increase in anti-American, and hence
anti-globalization, feeling since ISRAELi incursions into
Palestinian areas stepped up earlier this year. While their
strengthened influence is probably temporary, it could
complicate the GOJ's progress on promoting economic openness
in the short term. End summary.

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POWER PLAY IN AMMAN CHAMBER OF INDUSTRY
--------------


2. (c) The Amman Chamber of Industry (ACI) announced in
late April that 10 of the 12 members of its board of
directors had resigned. Officially, this followed an
expression of no confidence by the majority of board members
in ACI Chairman Othman Bdeir's ability to manage the
chamber's interests. Unofficially, the move is believed to
be a power play by influential businessmen who sell their
products to Iraq under the bilateral oil and trade protocols
(led by former ACI chairman Khaldoun Abu Hassan) to regain
control of the ACI and re-energize and re-orient its
political activities. The two remaining board members are
also pro-Iraq, and have ties to Abu Hassan and to PM Abul
Ragheb and former Trade Minister Wasef Azar (all of whom are
seen as supporters of the Iraq trade). We have also heard
from government contacts that one of the reasons for the
resignations was a belief by some members that the ACI was
not doing enough to advocate for a boycott of US products.
It is unclear at this point if the interim board appointed by
Trade Minister Bashir and that includes a number of
forward-thinking businessmen will be able to solidify its
position and remain in place, or if Abu Hassan will succeed
in re-taking control of the ACI.

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NEW CHAMBERS LAW WORRIES PRO-QIZ GROUPS
--------------


3. (c) Meanwhile, Irbid Chamber of Industry (ICI) chairman

Maher al Nasser told us recently that a law reforming the
operations of Jordan's three local chambers of industry is
currently under consideration in the cabinet. Nasser worried
that the law is a bid by the ACI to merge the chambers into a
single chamber under its control. Nasser called this
potentially disastrous, as the ACI is dominated by
Palestinian Jordanians who, he said, want to politicize the
chambers. He said ACI members want other chambers to support
a boycott of U.S. products, support "anti-normalization"
efforts (i.e. oppose doing business with ISRAEL),and give
assistance to the Palestinian cause. An East-Banker and
chairman of a chamber that has many QIZ exporters as members
(and hence does extensive business with ISRAEL),Nasser said
the impact of such a law on the ability of the chambers in
Irbid and Zarqa to pursue liberal trade practices could be
severe.


4. (c) In a separate conversation, Trade Ministry Secretary
General Samer Tawil told Econ chief that the proposed law
would not subsume the other chambers under the ACI, but would
instead establish an additional body, a national federation
of chambers of industry, as an umbrella group. The local
chambers would retain their separate identities. He said a
federation would function similarly to the existing
federation of chambers of commerce (note: this body is a
highly politicized, but largely ineffective and essentially
marginal grouping of equally ineffective local chambers of
commerce. End note.). Tawil said the current system, which
dates from 1949, was in dire need of reform to help Jordanian
companies upgrade their standards and market themselves to be
able to take advantage of opportunities under the FTA and
other new trade programs - rather than continue to rely on
the Iraqi market. He was, however, worried that a new law
would require new chamber elections that in the current
political environment could put anti-normalizers and pro-Iraq
elements in control. Thus, he said he would advocate
delaying chamber elections if the new law is enacted.

--------------
COMMENT
--------------


5. (c) The dramatic worsening of the situation in the West
Bank over the past two months created an opening for
old-guard elements of the business community to re-insert
their agendas into the economic policy debate in the kingdom.
They hope to take advantage of an increase in popular
displeasure with the GOJ's relationships with ISRAEL and the
U.S. to push a politicized economic agenda focused on
monopolizing government contracts, trade with Iraq, and
anti-normalization. Such efforts by economic reactionaries
are reflective of ongoing tensions between different segments
of Jordan's business community -- between old guard,
subsidy-dependent industrialists and new economy businessmen,
and between "pure" private sector business interests and
those who wish to tie economic decisions to political stands
on Iraq and Palestine.


6. (c) Although distracted by the regional political
situation in recent months (ref a),the GOJ commitment to
reform highlighted in the King's recent visit to Washington
means the momentum for economic liberalization will continue.
Indeed, senior GOJ officials tell us they are finalizing a
number of new economic reform bills, for which they expect to
secure cabinet approval before the end of June (septel). In
the short run, though, the momentum of reform will be slowed
to the extent that the old guard is able to capitalize on
political developments to advance their self-interested
agenda.
Gnehm