Identifier
Created
Classification
Origin
03AMMAN6506
2003-10-09 18:02:00
UNCLASSIFIED
Embassy Amman
Cable title:  

JORDAN: EMBASSY COMMENTS ON OPIC APPLICATION

Tags:  EINV JO 
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UNCLAS AMMAN 006506 

SIPDIS

PASS OPIC FOR SHARON WILLIAMS

E.O. 12958: N/A
TAGS: EINV JO
SUBJECT: JORDAN: EMBASSY COMMENTS ON OPIC APPLICATION

UNCLAS AMMAN 006506

SIPDIS

PASS OPIC FOR SHARON WILLIAMS

E.O. 12958: N/A
TAGS: EINV JO
SUBJECT: JORDAN: EMBASSY COMMENTS ON OPIC APPLICATION


1. (U) As requested in a memorandum dated September 23,
2003 from OPIC Applications Officer Sharon Williams, the
Embassy has reviewed the application for up to $300 million
in OPIC Political Risk Investment Insurance for an "Aqaba
Special Economic Zone" project that was submitted to OPIC by
Citigroup.


2. (U) The Aqaba Special Economic Zone (ASEZ) project is a
high priority of the Jordanian government, which created the
ASEZ in 2000 as a low-regulation economic area that is
expected to emerge as a center of industrial, tourism and
transportation growth in Jordan. The U.S. Government,
through the Agency for International Development, has
provided extensive financial and technical support to this
effort, including through the financing of the Aqaba
International Industrial Estate (AIIE),which is located
within the ASEZ and which has also been designated by the
U.S. Trade Representative as a Qualifying Industrial Zone
(QIZ). The USG is also providing technical assistance to the
governmental authority in the ASEZ, the Aqaba Special
Economic Zone Authority (ASEZA). While eliminating
unnecessary regulation overall, ASEZA has introduced new,
modern regulations to ensure protection for the local
environment and labor.


3. (U) The Embassy does not see negative economic
consequences from the ASEZ project. Indeed, we share the
expectation of the Government of Jordan that the ASEZ's
success will promote increased deregulation and stronger
economic growth in Jordan as a whole. We note that the
financing being considered would add to Jordan's sovereign
external debt, which the Government of Jordan is working to
reduce with the support of the International Monetary Fund.
However, we understand that the financial terms of the
proposed financing are more favorable than Jordan could
obtain on domestic debt. If approved by OPIC, the Embassy
believes that an eventual decision to draw on such financing
should be made by the government of Jordan in consultation
with the IMF.
GNEHM