THE DEPUTY SECRETARY'S MAY 20 ROUNDTABLE MEETINGS

C O N F I D E N T I A L SECTION 01 OF 02 AMMAN 004996

SIPDIS

E.O. 12958: DECL: 06/21/2015
TAGS: PGOV PREL ECON KMPI JO
SUBJECT: THE DEPUTY SECRETARY'S MAY 20 ROUNDTABLE MEETINGS
ON REFORM WITH JORDANIAN CIVIL SOCIETY AND BMENA BUSINESS
LEADERS


Classified By: CDA David Hale for Reasons 1.4 (b),(d)


1. (U) The Deputy Secretary met separately with members of
Jordan,s civil society and with business leaders from the
BMENA region on May 20 at the Dead Sea Movenpick Hotel,
Jordan, on the margins of the World Economic Forum conference.


2. (U) Participants:

U.S.
--------------
The Deputy Secretary
Executive Assistant to the Deputy Secretary Wilson
Embassy Amman Charge d'Affaires Hale
Deputy Spokesman Ereli
NEA DAS Carpenter
NSC Director Pandith
D Special Assistant Davies
D Special Assistant Waller
Embassy Amman Econ Counselor Eason
Embassy Amman Cultural Affairs Officer Winton
Notetaker Schedlbauer

Jordan Civil Society
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GOJ Finance Minister Bassam Awadallah
GOJ Culture Minister Asma Khader
Victor Billeh, Director, UNESCO Beirut
Maha Khatib, Director, Jordan River Foundation
Rami Khouri, Editor-at-large, the Daily Star
Lina Koura, Sisterhood is Global Institute
Anas Al Saket, Jordanian Women,s Association
Soraya Salti, Senior Vice-President, Junior Achievement
Worldwide
Samar Dodin, writer, specialist for Amman Municipality
Azzam Shweihat, Jordanian-American Business Association

Arab/BEMENA Business Leaders
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Khalid Abdulla-Janahi, Chairman, Shamil Bank of Bahrain,
Bahrain
Henry T. Azzam, Board Member, Royal Jordanian Airlines,
Jordan
Mazen S. Darwazeh, Chairman Hikma Pharmaceuticals, Jordan
Talal Al-Gaaod, Businessman, Iraq
Fadi Ghandour, President and CEO, Aramex International, Jordan
Khalid Kanoo, Chairman, Chamber of Industry and Commerce,
Bahrain
Muslim Lakhani, Chairman, Mesa Petroleum Limited, Pakistan
Murad Ali Murad, Chairman National Bank of Kuwait and
Bahrain, Bahrain


3. (C) Summary: In separate roundtables with the Deputy
Secretary, members of Jordanian civil society and the

SIPDIS
Arab/BMENA business community discussed reform in the Arab
world. The civil society participants discussed the
challenges of overcoming political intimidation, building
support for reform among all sectors of society and not
just within the elite, and putting a local face on reform.
The business leaders also argued for an Arab formula/plan
for reform, but generally acknowledged that U.S. pressure
in favor of a reform agenda was helpful. The Deputy
Secretary agreed that building public support for reform

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is critical. End Summary.

Arab citizens still intimidated by those in power;
stymies their embrace of reform agendas
-------------- --------------


4. (C) The Deputy Secretary met first with the Jordanian
Finance and Culture Ministers and eight members of
Jordanian civil society. Daily Star Editor-at-large Rami
Khoury enthused about what he described as a moment of
change: for the first time, Arab civil society and the
USG were both talking about reform. However, he
suggested there was a disconnect between America,s aims
and its ability to deliver change, and that this
disconnect was at least in part due to Arab attitudes
toward U.S. policy ) especially what he described as the
centrality of the Arab-Israeli dispute. Finance Minister
Awadallah disagreed, citing a recent poll that found a
strong majority of Arabs believe that the chief obstacle
to reform is a lack of sincerity on the part of Arab
governments; less than 10 percent identified the Arab-
Israeli dispute as an impediment. Khoury rejoined that
while there is an enormous latent desire for reform,
most Arab citizens do not feel empowered enough to
challenge their governments and are wary of embracing
government-sponsored reform agendas. He ended by
suggesting the U.S. adopt a more multi-lateral approach
to promoting reform. The Deputy Secretary observed
that it is America,s willingness to lead the
international community ) including, if necessary,
through unilateral action ) that sometimes creates
the context for successful multilateralism.


5. (C) Jordan River Foundation Director Maha Khatib
stated that the Jordanian parliament is generally
representative of the Jordanian people, but largely
resistant to the government's reform efforts and to the
conceptualization of the reform agenda. She argued
that the elites have failed to transmit effectively the
spirit of reform to the average Jordanian citizen or to
parliament. Culture Minister Asma Khader, a prominent
human rights activist before joining the government in
2003, agreed that although Jordan,s NGO community has
produced many reformers, it remains a community of
elites. She, too, argued for putting the reform agenda
in the hands of people at the grassroots level.

Arab formula of reform needed; US pressure helpful
-------------- --------------

6. (C) In the next roundtable discussion with members of the
Arab/BMENA business community, the discussion largely focused
on reform and the private sector's role in promoting change.
Jordanian pharmaceutical manufacturer Mazen Darwazeh stressed
that reform should be based on an "Arab formula" as ideas
imposed from outside the region would be rejected. Fadi
Ghandour, the Jordanian founder of international express
package delivery company Aramex, rebutted Darwazeh,s
comments, saying there would be no reform if it were not for
U.S. pressure. He said it was up to the business community
to promote reform. Pakistani entrepreneur Muslim Lakhani
lamented that the region needed a plan or it would always be
following someone else's.

Stock market boom but innovation lacking
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7. (C) Henry Azzam, former CEO of Jordinvest, noted that
many stock markets in the Arab world are booming since Arab
money has returned from the U.S. because of the difficulties
in opening American financial accounts post-2001. These
booming markets have encouraged greater capital market
reforms. Bahraini banker Khalid Abdulla-Janahi stated that
while cash liquidity in the region had helped give rise to a
stock market boom, real innovation was not taking place. He
noted that while tariffs had been removed as of January 1,
2005 between Arab states, non-tariff barriers have increased
as a result. He stressed the need for business to be part of
a constructive reform dialogue and also counseled that reform
must come from the bottom up since it often has unpopular
costs associated with it.

Need to protect banking sector
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8. (C) Bahrain Chamber of Commerce and Industry Chairman
Khalid Kanoo noted that Bahrain has made progress in the last
few years, largely thanks to the support of the USG.
Bahraini bankers Murad Ali Murad sounded a note of caution
that there can be downside risks to too much or too rapid
reform. He said the Bahraini banking sector could be hurt by
reform if precautions were not taken to minimize risks. He
also stressed the need for good corporate and public
governance, along with better enforcement of laws and greater
transparency.

Deputy Secretary: Build Public support
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9. (C) The Deputy Secretary concluded the discussion by
stressing the importance of building public support for
reform, but also underscored the need not to be discouraged
by the opposition of a few malcontents. He recalled how,
during a trip to Egypt in December 2004 for the signing of
the Qualifying Industrial Zone (QIZ) agreement with Israel,
he witnessed two demonstrations. One demonstration featured
approximately 300 people protesting the signing of an
agreement with Israel; the second - and far larger -
demonstration featured several thousand workers clamoring for
the opportunity to work in the QIZ.


10. (U) This cable has been cleared by the office of the
Deputy Secretary.
HALE