PM FAYEZ ON RELATIONS WITH GULF, ISRAEL, IRAQ

S E C R E T SECTION 01 OF 02 AMMAN 000459 SIPDIS E.O. 12958: DECL: 01/20/2014 TAGS: PREL ECON EAID KU IS SA JO SUBJECT: PM FAYEZ ON RELATIONS WITH GULF, ISRAEL, IRAQ REF: A. AMMAN 348 ¶B. AMMAN 409 Classified By: Amb. Edward W. Gnehm for reasons 1.5 (b) (d) -------------- SUMMARY -------------- ¶1. (C) PM Fayez told the Ambassador January 19 that he did not receive a promise from Kuwait to continue its supply of free oil to Jordan on his recent trip there, but that he would keep "chipping away." It was more important to continue the larger Saudi supply, and he hoped his family connections to the Saudi royal family would help. Fayez complained about a statement by Israeli PM Sharon that Jordan's support for the ICJ case against the separation barrier would hurt Jordan, and argued that Israel must give Jordan some accommodation because of the Islamist opposition in the new Parliament. The PM pledged Jordan's continuing strong support for efforts to rebuild Iraq, including training of Iraqi security forces in Jordan. Fayez supported Rafidain Bank's talks with a technical committee and Jordan's transfer of frozen Iraqi assets to the DFI, but asked that the promised team be sent to Jordan to address Jordan's concerns and settle Jordanian claims against frozen Iraqi assets. END SUMMARY. -------------- -- WILL KEEP CHIPPING AWAY AT KUWAIT, SAUDI ARABIA -------------- -- ¶2. (C) Prime Minister Faisal al-Fayez told the Ambassador and PolCouns January 19 that he was received "like royalty" on his recent visit to Kuwait, including being met at the airport by "all the royal family except the Amir." However, he said, he did not receive a commitment to continue the supply of free petroleum, noting that there is some opposition to this in the Kuwaiti Parliament. "We will keep chipping away," he commented. Fayez credited his warn reception to the close relations his father had enjoyed in Kuwait, particularly because of his father's opposition to Iraq's invasion in 1990. (FonMin Marwan Muasher commended to the Ambassador last week that he, too, had been received grandly in Kuwait, but had not gotten a commitment for the supply of more free oil - ref a). ¶3. (C) Fayez said that in Kuwait he had given several strong statements of support for Saudi Arabia, and hoped those statements would be noticed in Riyadh. Fayez said that he hoped to secure continued free oil from Saudi Arabia: "If I get Saudi Arabia, that is nearly half a billion (dollars), and I can live without (free oil from) Kuwait and the Emirates." ¶4. (C) Fayez said "oil" was not the only important issue he focused on in the Gulf. He mentioned interest by Qatar in a USD 400-700 million dollar investment in Aqaba, and interest by Kuwait in increasing its investment in the country as well. Fayez said it was also critically important to Jordan's economy to reopen the Gulf and Saudi Arabia to Jordanian agricultural products. He hoped that Saudi Arabia would soon send a survey team to look at Jordanian agricultural production to eliminate fears of contamination of Jordanian produce by reuse of wastewater. (Note: Water and Agriculture Minister Hazem Nasser had earlier told the Ambassador that he was pessimistic about the possibility of large increases of exports of agricultural products to Saudi Arabia after having encountered an uncompromising attitude among Saudi officials on a recent trip. END NOTE.) -------------- ISRAEL, THE FENCE, AND THE ICJ -------------- ¶5. (S) Fayez complained about a statement by Israeli PM Ariel Sharon on January 19 before the Knesset saying that Jordan will "lose a lot" for its support of Palestinian legal action against the separation barrier in the International Court of Justice (ICJ). Fayez said that "the wall" affects core Jordanian national interests, and Jordan must act on those interests, especially when some in Sharon's ruling Likud party continue to say that Jordan is Palestine. He said that the GOJ, working through GID Chief Saad Kheir, had been sending positive messages about the relationship, but also noting that Jordan now has a vocal Parliament of its own to deal with. Fayez said the security relationship with Israel remains close, but "they have to make some concessions on political issues." ¶6. (C) The Ambassador pressed Fayez to think carefully about the core importance of the Jordan-Israel relationship and to deal positively with all of its elements. Jordan, he suggested, needed to remain agile and flexible. For example, a GOJ decision to delay all high-level contacts with Israel until after the scheduled January 28 visit of FonMin Silvan Shalom to Amman had unintended consequences. It probably delayed the extension of the agreement on 8 percent Israeli content (which will roll back to 11.7 percent) in goods exported to the U.S. from Qualifying Industrial Zones (QIZs). Without high level contact to finalize this agreement, Jordanian QIZ factories could lose future contracts, leading to layoffs of workers, and a fall in the volume of Jordanian exports. Fayez took the general point, saying that he had reaffirmed to all parliamentary political blocs last fall his government's strategic commitment to the relationship with Israel. However, with increased pressure from the Muslim Brotherhood, "I cannot say that Sharon is nice and wants peace." He promised to talk to Deputy Prime Minister and Trade Minister Mohammed Halaiqa to try to solve the QIZ issue. -------------- REBUILDING IRAQ, IRAQI ASSETS -------------- ¶7. (C) The Ambassador noted that the U.S. is sensitive to Iraqi views about their future and constantly assessing the best course of action to give sovereignty back to the Iraqis and to support Iraqi efforts to build an open and pluralistic society and government. We are trying to reach out more to Sunni tribes. Fayez said these were good steps, and reaffirmed Jordan's strong commitment to do what it can to rebuild Iraq, including police and military training. (see ref b for Fayez's comments on Muslim Brotherhood criticism of the police training program). The Ambassador thanked Fayez for the decision to permit Royal Jordanian to fly to Baghdad again. Fayez said he had asked RJ to limit the number of Jordanians on any one flight, hoping to avoid a large number of Jordanian casualties and a public outcry should there be an "accident." ¶8. (C) The Ambassador thanked Fayez for Jordan's recent transfers of Iraqi assets into the Development Fund for Iraq (DFI). The PM supported the transfer of assets to the DFI and Rafidain Bank's cooperation with the Iraqi technical team. (We understand a bank representative participated in a meeting earlier in the day of the technical committee chaired by the Deputy Governor of the Central Bank.) The conversation quickly turned to the absence of a USG-CPA team that could address Jordanian concerns. With such a team, Fayez asserted, the GOJ could finish adjudicating Jordanian claims on frozen assets and transfer the remaining frozen assets to the DFI "within a month." -------------- PM TO ANNOUNCE PRICE INCREASES -------------- ¶9. (C) At the end of the meeting, Fayez noted that he would go before Parliament that afternoon and announce price increases on certain commodities (septel). He said that he would also have a strong answer to the IAF or other oppositionists who challenged Jordan's training of Iraqi personnel or Jordan's relations with Israel. -------------- COMMENT -------------- ¶10. (C) In discussing Jordan's relations with the Gulf, Fayez seemed to be relying on his personal and family connection to prominent royal family members, continually referring back to his and his father's close personal relations with Saudi and Kuwaiti princes (his father was married into the al-Saud family). As we have previously mentioned, we believe that dispatch of a team empowered to address Jordan's concerns about frozen Iraqi assets and the trade ledger would speed resolution of these issues, as well as transfer to the DFI of the remaining Iraqi assets frozen in Jordan. ¶11. (U) CPA Baghdad minimize considered. Visit Embassy Amman's classified web site at http://www.state.sgov.gov/p/nea/amman/ or access the site through the State Department's SIPRNET home page. GNEHM