JORDAN: FY04 FOOD AID

C O N F I D E N T I A L AMMAN 000730

SIPDIS

NSC FOR E. ABRAMS
E STAFF FOR CADE
CAIRO FOR CHAUDRY

E.O. 12958: DECL: 01/29/2009
TAGS: EAGR PREL JO
SUBJECT: JORDAN: FY04 FOOD AID

REF: 2003 AMMAN 6504

Classified By: David Hale, CDA. Reasons 1.5 (b) and (d).


1. (C) We understand that USDA and State are considering
reducing Jordan's PL480 Title I allocation from $20 million
in FY03 to $15 million in FY04 due to a reduction in the
global amount of funding available for this program. We
cannot comment on competing needs, but Washington should be
aware even a $5 million reduction would have a meaningful
impact on Jordan's budget as the Government struggles to meet
its FY04 deficit target in the face of strong Parliamentary
opposition to the tax and price hikes to which the Government
is already committed. Higher wheat prices this year will
also increase the overall cost of wheat procurement.
Moreover, the Jordanians will view a reduction as a rebuff at
a political level, particularly given that the King recently
asked for the President's support for an additional $300
million in FY04 economic aid. While U.S. assistance levels
to Jordan are indeed extraordinary, these levels reflect the
importance of our extremely close partnership in meeting key
foreign policy challenges. The Jordanians are taking large
risks for this relationship; a reduction in our support,
however small or mitigated by increases elsewhere, only
leaves them more exposed and less able to help.
HALE