TFIZ01: ZARQA BUSINESS COMMUNITY PONDERS IRAQ'S

C O N F I D E N T I A L SECTION 01 OF 02 AMMAN 002068

SIPDIS

USDOC FOR 4520/ITA/MAC/ONE/COBERG

E.O. 12958: DECL: 04/06/2013
TAGS: ECON EAID PREL IZ JO
SUBJECT: TFIZ01: ZARQA BUSINESS COMMUNITY PONDERS IRAQ'S
FUTURE

Classified By: DCM Greg Berry, reasons 1.5 (b,d)

--------------
SUMMARY
--------------


1. (c) Business community leaders in Zarqa, Jordan's
industrial center, are hopeful that a post-war Iraq will open
numerous new business opportunities for Jordanian companies.
They fear, though, that Iraq's diverse social structure makes
the country vulnerable to collapse into internecine warfare
as soon as coalition troops vacate. While their political
musings are typical of the overall Jordanian gloom about the
politics of Iraq, their optimism about economic prospects
puts them - along with much of Jordan's business community -
at odds with the "street" regarding Iraq's potential future.
End summary.

--------------
IRAQ - BUSINESS PROSPECTS GOOD...
--------------


2. (c) A March 19 meeting with the board of the Zarqa
Chamber of Industry, a relatively progressive collection of
business leaders in Jordan's second city, quickly morphed
into a spirited discussion about Iraq and internal politics
in Jordan. While not doubting that the coalition would
ultimately be successful in ousting Saddam from Iraq, ZCI
Chairman Mohammed al Tell and other board members were
apprehensive at the possible shape of a post-Saddam Iraq.
Tell spoke at length about the uncertainties that would
continue to cloud the future of Iraq and Jordan's
relationship with it.


3. (c) On the economic side, Tell and board vice-chairman
Thabet al Wir acknowledged that there would likely be
opportunities in both the short and long term for Jordanian
companies. Initially, this would come through contracts with
relief agencies in providing food and medicines to Iraq.
They noted the transport sector would ultimately benefit as
well, as Aqaba's historical position as a primary port for
Iraq returned to normal after over a decade of sanctions.
They admitted, though, that Jordanian companies had not made
any plans to re-enter the market, and were waiting instead to
see what opportunities came to them from the donor community.

--------------
...PROVIDED THE COUNTRY STAYS INTACT
--------------


4. (c) They conditioned this assessment, though, upon a
quick end to the war and the immediate creation of a viable,
sustainable government of, by, and for Iraqis. Their
greatest fear, they said, was a total breakdown in civil
order in the absence of Saddam's apparatus of repression. A
gap of even a week, they said, between the fall of Saddam's
regime and the establishment of a legitimate successor
government that represented the fractious interests of all
Iraqis, could easily lead to revenge killings and, if left
unchecked, ultimately to a complete breakdown in civil order.


5. (c) They saw Iraq as riven by a vast multitude of social
divisions - ethnic divisions between Kurds, Arabs, Turks,
Causasians, and others; religious divisions between Shia,
Sunnis, Christians, and smaller groupings of faiths;
political gradations among Saddam hardliners, Baathist
apparatchiks, dissidents and liberals; and socio-economic
divisions between urban rich and poor, between rural tribes
and city-dwellers, and between middle/upper class diaspora
and an economically depressed resident population. Many of
these fault lines are further reinforced by geographical
divisions, and any or all could become flash points in the
absence of strong authority following the economic damage
brought by war.


6. (c) The key to avoiding such a dissolution into chaos,
the Chamber leaders contended, would be a short, successful
war followed by a swift pull-out of foreign troops coupled
with the installation of an internally legitimized central
authority strong - or savvy - enough to keep these groups
from tearing at one another. A critical tool for such an
authority would be immediate infusions of aid to feed and
house Iraqis and to quickly pump money into the local economy
through reconstruction projects.

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


7. (c) The Chamber's analysis of a post-Saddam Iraq
predates the onset of hostilities, but nevertheless presents
a sobering Jordanian assessment of likely post-war
challenges. In this typical discussion of Jordanian
anxieties, it was easy to elicit opinions about what will
tear Iraq apart. It proved far more difficult to explore
factors that might serve to hold Iraq together -
urbanization, a historically strong middle class, an educated
population, a supportive diaspora, and a relatively strong
resource and industry base. Yet, as dark an assessment as
the Chamber had about political challenges, they - like a
good percentage of Jordan's business community - continue to
be more positive than the "street" about the prospects for
quick economic benefits born of relief and reconstruction
activities.
GNEHM