PM ABUL RAGHEB TELLS DAS CHENEY GOJ TO CONTINUE

C O N F I D E N T I A L AMMAN 005915

SIPDIS

E.O. 12958: DECL: 10/09/2012
TAGS: PREL EAID PGOV US JO
SUBJECT: PM ABUL RAGHEB TELLS DAS CHENEY GOJ TO CONTINUE
ECONOMIC, CIVIL SERVICE REFORM EFFORTS


Classified By: Amb. Edward W. Gnehm for reasons 1.5 (B) and (D)


1. (SBU) NEA DAS Elizabeth Cheney discussed the USAID
program and economic reform October 8 with Prime Minister Ali
Abul Ragheb and Planning Minister Bassam Awadallah
(discussion of honor killings reported in septel).
Ambassador Gnehm, USAID Director Christiansen-Wagner and
PolCouns Silliman accompanied. DAS Cheney praised Jordan's
economic reform program and noted that Jordan has the
potential to be "a model of reform and development for the
region." She previewed the Middle East Partnership
Initiative (MEPI) which Secretary Powell will roll out in a
speech on November 6. MEPI will "demonstrate U.S. commitment
and dedication" to key areas of development in the Middle
East, including economic development, education, political
reform, rule of law, and development of civil society. All
of these areas, she noted, were highlighted in the recently
released UN Arab Human Development Report. She explained
that this initiative will encompass all of the U.S.'s
existing assistance programs in the Arab world which total
over USD 1 billion annually. In addition, the USG will
dedicate USD 20 million for pilot projects in FY02 and
anticipates additional funding in following years.


2. (SBU) Abul Ragheb expressed Jordan's great appreciation
for continued USG support, especially through the USAID
program. He noted that the GOJ is now focusing its social
development activities in areas that the poorest Jordanians
can feel most: education, health, vocational training,
water, and youth programs. "We need the people to feel what
is going on." He described GOJ relations with the IMF and
World Bank as excellent, and thanked the U.S. for its efforts
earlier in the year to secure a new Paris Club agreement for
Jordan.

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PRIVATIZATION, ITC UPDATE
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3. (C) Abul Ragheb said that the privatization process is
going well. Jordan TeleCom will conduct its first IPO in the
coming week, selling an additional 15 percent of its shares
(France TeleCom currently owns 40 percent and Jordanian
pension systems an additional 10 percent, he noted.)
Planning Minister Awadallah commented that he hoped the GOJ
would be "completely outside of JTC" and not dependent on its
revenues by 2004 "so the Finance Ministry won't defend JTC's
monopoly so much." He said Jordan hopes to find a way to
fund a USD 53 million project to install the hardware to
provide a broadband link among all Jordanian schools. This
would enhance both Jordanian education and market access.
The GOJ also has plans to turn school IT facilities into
after-hours community IT centers.


4. (C) Abul Ragheb said that, in the process of
privatization, it is important that the GOJ "deal fairly"
with those employees who might lose their jobs. Jordan needs
more and better programs to retrain workers for jobs in the
private sector. This will be especially important, he said,
when the overstaffed phosphates company is privatized.

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PENSION REFORM
--------------


5. (C) Responding to a question on civil service and
pension reform, Abul Ragheb said the GOJ's ultimate goal is
to reduce the number of public sector employees. Jordan has
been working with international donors and the IMF on civil
service and pension reform, and has succeeded in getting all
newly-hired government employees into the centralized system.
The problem remains the "different style of pension" systems
for the military and security services. Eventually, the GOJ
wants to move these systems under the umbrella of the central
pension system, but there are important political factors to
take into account. In the short term, however, the GOJ is
examining ways to reduce military pension expenditures, for
example by raising the minimum service time to qualify for a
pension from 16 years to 18 or 20, and by increasing GOJ
programs to help retired military to find private sector
jobs. On e-government, Abul Ragheb said the GOJ is in the
process of amending civil service bylaws to increase the
service orientation of government employees. Awadallah noted
that Jordan had just received a USD 120 million loan from the
IMF as the second phase in a public sector reform program.


6. (U) DAS Cheney has cleared this message.
GNEHM