JORDAN: SCENESETTER FOR CODEL HAGEL

UNCLAS SECTION 01 OF 02 AMMAN 009055

SIPDIS

SENSITIVE

DEPARTMENT FOR H, NEA/ELA

E.O. 12958: N/A
TAGS: PGOV PREL PTER EAID ECON OREP JO
SUBJECT: JORDAN: SCENESETTER FOR CODEL HAGEL


1. (U) Embassy Amman warmly welcomes CODEL Hagel to Jordan.
The Government of Jordan (GOJ) is not only one of our closest
allies, but it is fully engaged in supporting our most
important priorities in the region, including creating a free
Iraq, fulfilling the President's vision of a two-state
solution to the Israeli-Palestinian conflict, fighting global
terrorism, and advancing comprehensive Jordanian and Arab
reform. We have highlighted below recent political, economic
and social developments that set the context for your visit.


2. (SBU) TERRORIST BOMBINGS: Jordan is united in a mood of
defiance after the November 9 bombings of three Amman hotels.
Anger over the bombings spans the political spectrum, and
includes groups such as the Muslim Brotherhood that are
critical of Jordan's close relationship with the U.S.
Hundreds of thousands of Jordanians have demonstrated
peacefully around the country to denounce the attacks and to
pledge their support for King Abdullah. The killing of
innocent Muslims in the blasts, especially the carnage
wrought on a wedding party, has significantly cut into
sympathy for al-Qaeda amongst the sizable number of
Jordanians who had previously condoned its terrorist
operations in Iraq and elsewhere. In a national survey
published on November 16, 87.1% of respondents said they
believed that al-Qaeda was a "terrorist organization,"
compared to only 7.4% who held the opposite view.
Approximately 65% said their views on al-Qaeda had changed
for the worse after the November 9 bombings. The GOJ
recently announced new regulations aimed against foreign
militants, and is drafting new legislation to prohibit the
promotion or justification of terrorist acts. To date, the
attacks have had little negative impact on Jordan's economy.



3. (SBU) NATIONAL AGENDA FOR REFORM: King Abdullah and his
reform team are proud of their achievements, but are keen to
accelerate the pace of political transformation. Earlier in
the year, the King appointed a royal commission made up of
members from a broad swathe of Jordanian society to draft a
comprehensive "National Agenda" that would chart the course
for sweeping reforms in eight different substantive areas
over the next 10 years. After completing its work last
month, the commission is preparing to formally present the
National Agenda to the King in the coming days. Regarding
political reforms, the Agenda includes recommendations for
new laws on political parties and elections that would
strengthen the currently weak role of parties and create a
more representative parliament. Supporters of the status quo
in parliament and elsewhere, however, have already expressed
strong resistance to some of the expected changes,
recognizing that a more democratic political process and open
economy would negatively impact their entrenched political
and economic interests. To help push forward his reform
agenda, the King recently replaced several of his key
advisors in the royal court and named a number of new
Senators. There is much speculation that the King may soon
appoint a new prime minister to lead a revamped cabinet.


4. (SBU) SUPPORT FOR IRAQ: The GOJ has taken a
forward-leaning view of the conflict in Iraq, realizing
earlier than most of Iraq's neighbors that the stabilization
and rebuilding of Iraq should be a top regional priority.
Despite some domestic political opposition and strong public
sentiment against U.S. policy on Iraq, the GOJ has been
steadfast in assisting our efforts in Iraq. The Iraqi police
training facility in Jordan, for example, has provided
instruction for thousands of new Iraqi police officers. The
GOJ has also provided training for the new Iraqi army and
numerous Iraqi government civilians (such as air traffic
controllers and employees of Iraqi ministries). On September
10, Jordanian Prime Minister Adnan Badran - accompanied by
four other cabinet members - became the first senior Arab
state official to travel to Baghdad since the fall of Saddam.
King Abdullah regularly meets with Iraqi officials visiting
Jordan and he has repeatedly encouraged all Iraqi factions
and groups to participate in the political process. Jordan
has named an ambassador to Iraq, retired general Ahmad
al-Lozi; the timing of his arrival in Baghdad depends now on
when the Iraqi leadership can accept his credentials.


5. (SBU) ISRAEL AND THE PALESTINIANS: The GOJ continues to
urge the Palestinian Authority to coordinate closely with the
Israelis on post-withdrawal Gaza and on advancing the
roadmap. Jordan has lent both rhetorical and tangible
support to President Abbas in his efforts to bolster his
authority in the Palestinian territories, and to reform the
security apparatus. Jordan's 1994 peace treaty with Israel -
though publicly unpopular - remains a cornerstone of its
security and economic strategy. The GOJ strongly opposes the
construction of the Israeli security barrier outside the
Green Line and the expansion of Israeli settlements.


6. (SBU) COMBATING EXTREMISM: The GOJ has a strong interest
in combating Islamic extremism, and has actively supported
religious tolerance and moderation. In November of 2004,
Jordan's top cleric, backed by the King, launched the "Amman
Message," which argued that authentic Islamic traditions call
for respect for others, tolerance, freedom of conscience, and
the rejection of extremist violence. In July of this year,
Jordan hosted an international conference of approximately
170 Islamic scholars and clerics to promote the Amman
Message. Its closing communiqu, endorsed by Islamic
authorities in several countries - including Grand Ayatollah
SISTANI in Iraq - clearly denounced key elements of
al-Qaeda's ideology.


7. (SBU) ECONOMIC ISSUES: Jordan has traditionally been
dependent on foreign assistance, for which it is very
grateful, but is determined to move from an aid-based to a
trade-based economy. Since King Abdullah assumed power,
Jordan has emerged as a model for economic reform in the
region. In close cooperation with USAID, Jordan rewrote its
laws and regulations to meet WTO requirements, modernized its
customs regime, and took important steps to encourage foreign
investment. These reforms helped Jordan's GDP of USD 10.8
billion grow by 7.6% last year in real terms, fueled by
booming exports to Iraq and the U.S. (NOTE: The U.S.-Jordan
Free Trade Agreement went into effect in December 2001. END
NOTE.) Jordan still has work to do, however, to reform basic
government services, create a climate of full transparency
and accountability, and curb widespread unemployment,
particularly among the large number of young Jordanians who
enter the job market each year. Despite its recent strong
economic performance, Jordan's system of fuel-price subsidies
at a time of record high oil prices, combined with its large
public debt burden, has put a tight fiscal squeeze on the
GOJ. Jordan has already cut back these subsidies - a
politically painful step - in line with plans to completely
end them within two years, but in the meantime is seeking
additional assistance from Saudi Arabia, the UAE and Kuwait.
The GOJ's revised budget for 2006 aims to bring down the
deficit from 16.1% of GDP in 2005 to 7.5% in 2006. On
November 8, the U.S. Millennium Challenge Corporation
selected Jordan as eligible for its Threshold Program.
Assistance under this program will be used to help Jordan
eventually qualify for Millennium Challenge Account (MCA)
development assistance funding.
HALE