TRADE MINISTER ZU'BI ENGAGES DAS DIBBLE ON S&T

UNCLAS SECTION 01 OF 02 AMMAN 008005

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TAGS: ETRD EIND KIPR PREL EAID JO
SUBJECT: TRADE MINISTER ZU'BI ENGAGES DAS DIBBLE ON S&T
COOPERATION


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1. (SBU) SUMMARY: The U.S.-Jordan Free Trade Agreement is a
platform upon which to increase higher value-added production
and attract investment in advanced laboratories, research
institutions, and manufacturing, Jordan's Minister of
Industry and Trade Sharif Zu'bi told visiting NEA Deputy
Assistant Secretary Dibble late last month. Jordan should
not become the sweatshop of the region, but instead needs to
add to its successful industrial base in the garment sector.
Minister Zu'bi's vision is of a high-tech industrial park in
Jordan providing tens of thousands of jobs held by educated
Jordanians within a decade. Leaders from the Royal
Scientific Society (RSS) and the Higher Council for Science
and Technology shared with DAS Dibble their views on Jordan's
current work in such fields as biotechnology and advanced
materials, and inquired about more avenues for cooperation
and assistance. DAS Dibble emphasized focusing on
private-sector solutions and improving Jordan's investment
climate through greater attention to protecting IPR and
lowering trade barriers. END SUMMARY.

Jordan Shouldn't Be a Sweatshop Economy
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2. (SBU) Minister of Industry and Trade Sharif Zu'bi
welcomed the continued interest in Jordan's economic
development shown by DAS Dibble's visit, and explained his
long-term vision for trade development. While Jordanian
exports to the United States are expected to exceed $1.5
billion in 2005 (an estimated 15-20% increase over 2004),
Zu'bi worried that Jordan cannot sustain continued growth in
the textile and garment trade upon which this success had
been based. In the longer term, Jordan has to focus on
producing higher-value-added goods, and this depends on
technology. Jordan does not wish to become the sweatshop for
the world. Hence, the GoJ is considering shifting gears in
its economic relations, according to Zu'bi, who emphasized
his gratification with the job and wealth creation -
especially for women - provided by the U.S.-Jordan Free Trade
Agreement and Qualifying Industrial Zone (QIZ) trade
initiatives. Highlighting his strong belief that Jordan had
the knowledge base and talent to produce high-tech goods, he
said that Jordan needs to find niche markets. Jordan needs
assistance to attract direct foreign investment, build a
high-tech manufacturing base, and assist advanced
laboratories and research institutions, according to Zu'bi.

Frontier Technologies...But No Breakthroughs
--------------


3. (SBU) Secretary General of Jordan's Higher Council for
Science and Technology Khaled Elshuraydeh briefed DAS Dibble
on the GoJ's science policy, outlining initiatives such as
the National Center for Technology and Business Incubation
which has focused on an ICT (information and communications
technology) incubator project since 2003. Jordanian
scientists are currently concentrating on a handful of key
frontier technologies, including information and
communications technology, biotechnology, advanced materials
and nanotechnology, and energy research, including
photovoltaics.


4. (SBU) Royal Scientific Society (RSS) President Sa'ad
Hijazi explained that while Jordan has good human resources
and academic contacts in the wider research community,
Jordan's S&T efforts to date have not resulted in
breakthrough advances. The incubators and other research
labs do not have a research system in place that would lead
to "something tangible", he noted, referring to applied
technologies with potential as marketable products. Hijazi
requested assistance in the field of science administration.

Hi-Tech Park
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5. (SBU) Minister Zu'bi said it was high time for Jordan to
take S&T seriously. He estimated that the QIZs would produce
$5 billion in revenue by 2010 at which time he would like to
have a Technology Park QIZ operational with 30-40 small and
medium sized enterprises (SMEs),each with gross revenues in
the $100,000-$1 million range. By 2015, Jordan could have
more than 150 hi-tech SMEs employing tens of thousands of
employees. Jordan has top people, but they now work in the
Gulf states, according to Zu'bi; this project would bring
them home.

Improve Investment Climate; Seek Private Partners
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6. (SBU) DAS Dibble noted that Jordan's relatively favorable
investment climate would help attract the investors in high
technology ventures that the GoJ was seeking, but added that
several areas needed improvement. Jordan has to demonstrate
strong compliance with intellectual property rights (IPR)
protections. Programs that are perceived as barriers to
trade - such as DAMAN - need to be eliminated. Zu'bi took on
board these points, relating that Jordan still has work to do
to enhance its IPR system, and that the Investment Law also
needed "tweaking." He expressed the hope that USAID could
provide technical comments on this law.


7. (SBU) DAS Dibble said that with the proper investment
climate, Jordan could attract investment from the U.S.,
including from R&D leaders such as Dow Chemicals or Monsanto.
She also noted that individual states in the U.S. had
public-private partnerships that might be explored to
identify U.S. partners. The Charge raised other possible
partners for Jordan in its high-technology endeavors,
including academic exchanges with leading U.S.-based research
institutions and the multi-disciplinary Colorado State
Partnership Program that the embassy's Military Assistance
Program had initiated with the Colorado National Guard.
Young scientists identified through the USAID-sponsored
Junior Achievement program might also be a source of
up-and-coming talent. The Charge added that the Embassy
EST&H officer would follow up to assess USG and academic
entities' interest and resources in S&T-related cooperation.


8. (SBU) COMMENT: Minister Zu'bi clearly wants to use the
U.S.-Jordan FTA as a platform upon which to make new advances
in industrial development and trade, and appears to
understand the need to improve the investment climate and IPR
enforcement. It is not clear, however, that the current S&T
organizational infrastructure in Jordan will support the type
of immediate advances Zu'bi hopes for. Although it is true
that Jordan produces some fine scientists, the institutional
barriers to effective S&T development and commercialization
are high. Individual components of a healthy S&T sector are
present, but a new generation of S&T leadership - and an
enabling legal and regulatory environment to support it - are
likely needed to make the vision of a hi-tech Jordanian
economy a reality.


9. (U) DAS Dibble did not have the opportunity to clear this
message.
HALE