SENATOR CORZINE DISCUSSES IRAQ AND THE MEPP WITH

C O N F I D E N T I A L SECTION 01 OF 02 AMMAN 005071

SIPDIS

E.O. 12958: DECL: 09/03/2012
TAGS: PREL KPAL ISRAEL'>IS JO
SUBJECT: SENATOR CORZINE DISCUSSES IRAQ AND THE MEPP WITH
JORDANIAN LEADERS

REF: TEL AVIV 04607

Classified By: CDA GREGORY L. BERRY FOR REASONS 1.5 (B) AND (D)

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SUMMARY
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1. (C) Senator Jon Corzine traveled to Jordan August 28-30.
On August 29, the Senator met with Foreign Minister Muasher,
Prime Minister Abul Ragheb, Minister of National Economy
Halaiqa, Minister of Finance Marto, private sector leaders,
the Trade and Planning Ministers, and a number of media
personalities. The Senator also paid a courtesy call on
Crown Prince Hamza. Throughout the meetings, Senator Corzine
heard familiar Jordanian views on Iraq and the MEPP. End
Summary.

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MEETING WITH FM SETS THE TONE FOR THE DAY: IRAQ AND MEPP
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2. (C) Senator Corzine, accompanied by his party, the Charge,
and Poloff, had his most substantive meeting with FM Muasher,
who underlined Jordanian concerns about U.S. military action
against Iraq. The FM predicted the loss of $500 million in
Iraqi oil subsidies, and also expressed concern about
managing public opinion, which was already difficult because
of the "West Bank crisis." As on previous occasions,
however, the FM--as did all GOJ officials the Senator
met--underscored that Jordan would safeguard its relationship
with the U.S. in any crisis. Muasher said that Jordan was
encouraging Iraq to allow the inspectors back in, but was
"not having any luck." Muasher also expressed concern about
"the day after." He opined that the disintegration of the
Iraqi state would be a "disaster." When questioned why, the
FM said he feared that in place of an Iraqi state, there
would be a Kurdish state in the North that would control the
oil fields, a Sunni state in the middle, and an
Iranian-controlled Shia state in the South. Muasher
cautioned that a long-term U.S. military presence in Iraq
post-Saddam would also be problematic for the region as
people would see it as a foreign occupation.


3. (C) FM Muasher also outlined the GOJ's current approach to
the ISRAELi-Palestinian confrontation. The GOJ has publicly
championed the U.S.'s call for a two-state solution, as
outlined in President Bush's June 24 speech. Muasher
encouraged the U.S. to exert more pressure on ISRAEL on the
settlements issue, in part to counter the wide-spread
perception here that the U.S. is one-sided and is only
pushing for Palestinian action. Muasher expressed concern
that Sharon was not committed to a two-state solution, "I'm
not sure he's not unhappy with Arafat's inaction." Muasher
underscored the significance of the Arab Initiative because
it addresses both ISRAELi security and demographic needs.
Muasher said that Arab countries need to take this plan
directly to the ISRAELi public to start "rebuilding trust."


4. (C) Muasher also addressed the recent bulge in the
Southern wall in response to a question by Senator Corzine
(Reftel). Jordan has sent a technical team to evaluate the
bulge and Muasher told the Senator that the ISRAELis have
overblown the problem because "they want a say in East
Jerusalem." Muasher stressed that the GOJ wants to keep the
issue at the technical level and do not want to see it
politicized.


5. (C) As the meeting closed, Muasher praised the bilateral
relationship between the U.S. and Jordan, emphasizing recent
trade expansion and calling the FTA a "jewel" that has so far
created 20,000-25,000 jobs in Jordan (comment: he was
probably thinking about QIZ-related jobs). Muasher said the
beauty of the FTA is "that it poses no threat to the U.S.
economy, but it has done wonders for the Jordanian economy."


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PM CONCERNED ABOUT FUNDAMENTALISM
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6. (C) The Senator's following meeting with PM Abul Ragheb
(accompanied by FM Muasher) covered similar ground. The PM
again emphasized the importance of the Arab initiative and
cautioned that action against Iraq would "complicate the U.S.
war against terrorism." The PM also touched on another
possible consequence of a U.S. offensive against Iraq--an
increase in "fundamentalism" in the region. The PM tied this
to the Palestinian cause as well, "if we solve the
Palestinian issue, we give extremists less material and
emotional buttons to work with." The PM echoed concerns
expressed by the Foreign and Finance Ministers earlier in the
day about the economic consequences of a U.S. offensive
against Iraq. Apart from Jordan's dependence on Iraqi oil,
Abul Ragheb pointed to the consequences on other sectors
(i.e. trucking industry, factories, laborers, etc.),"we can
deal with the unions, the protests, etc., but when people are
hungry, we have problems."

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OTHER MEETINGS STRESS GOJ ECONOMIC PERFORMANCE
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7. (C) During their meetings with the Senator, both Minister
of Finance Marto and Minister of National Economy Halaiqa
enthusiastically pointed to indicators of Jordan's improved
economic performance and standing in the world, including
Jordan's accession to the WTO and the U.S.-Jordanian FTA.
Halaiqa pointed to continued economic reform, despite
regional problems. "Jordan pays a heavy price for others'
bad decisions, but it will not stop us from economic reform."
Halaiqa also voiced concerns about the impact of an
offensive against Iraq on Jordan's economy. Halaiqa opined
that Jordan "will have to start from scratch" because any
cutoff in oil supplies from Iraq would force the GOJ to buy
from the world market, "draining" their foreign currency
reserves.


8. (C) At a luncheon hosted by the head of the Pharmaceutical
Manufacturers' Association (who also owns a generic drug
manufacturer in New Jersey),the Senator heard from a
cross-section of private sector leaders and members of the
GOJ's "economic team" including Minister of Trade Salah al
Bashir and Minister of Planning Bassam Awadullah, about
Jordan's strong interest in doing more business with the U.S.
under the FTA and QIZ initiative. They said that the main
obstacle deterring business was political uncertainty in the
region, particularly in the West Bank/Gaza and Iraq.


9. (C) Discussion at a dinner with prominent media
personalities centered on the Palestinian issue. Most of the
participants supported President Bush's June 24 speech, but
agreed that the focus on Arafat was counterproductive and
probably strengthened Arafat in the end.

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COMMENT
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10. (U) Senator Corzine did not have the opportunity to clear
this message before departure.
BERRY