KING LASHES OUT AT CONSERVATIVE CRITICS IN A BID

C O N F I D E N T I A L SECTION 01 OF 02 AMMAN 001984 SIPDIS E.O. 12958: DECL: 06/23/2018 TAGS: PGOV ECON KDEM KCOR JO SUBJECT: KING LASHES OUT AT CONSERVATIVE CRITICS IN A BID TO KEEP REFORM ON TRACK REF: A. AMMAN 1731 ¶B. AMMAN 1455 ¶C. AMMAN 1923 (NOTAL) ¶D. AMMAN 1030 Classified By: Ambassador David Hale for reasons 1.4 (b) and (d). ¶1. (C) Summary: In an extensive interview with the quasi-official Petra News Agency, King Abdullah defended Jordan's economic opening while acknowledging the squeeze it temporarily places on average citizens. Facing off against armchair critics, the King gave a detailed rationale for land sales and privatization. He also publicly defended his economic team, describing embattled Royal Court Chief Bassem Awadallah and PM Nader Al-Dahabi as "his father's men." On the day the interview appeared, Ahmad Obaidat, chairman of the board of the National Commission for Human Rights, was forced to resign after he signed a petition calling for a halt to privatization and the sale of public land. All of this comes on the heels of a drop in the government's favorability rating. The King's speech is a bold statement to his detractors, but in the end coherent policy implementation will speak louder than words. End Summary. The Best Defense is a Good Offense -------------- ¶2. (SBU) All of Jordan's media outlets carried verbatim an extensive, in-depth interview by the quasi-official Petra News Agency with King Abdullah on July 2. In the interview, the King offered a cogent, detailed defense of the liberal economic policies he favors while bitterly chastising the conservative nay-sayers whose grumbling from the sidelines is increasingly distracting the government from its primary goal of Jordan's economic advancement. ¶3. (SBU) Acknowledging the overwhelming concern among average Jordanians about the rising cost of living, the King noted that the issue "haunts" him and "is a major concern due to the tremendous challenge (inflation) poses to the majority of Jordanians." The King offered a two-pronged argument, saying that inflation is a global problem which impacts developing countries more severely. Second, the King argued that economic liberalization would help to insulate the country from such shocks to a certain extent, but its effects would take time to manifest themselves. Comment: Absent from the King's explanation was increasing concern about class tensions in Jordan, and the sense that only elites have the capacity to benefit from economic liberalization. End Comment. The King noted that he was not a pure economic "liberal" who was willing to let the market reign supreme over all aspects of Jordan's economy. While he is generally in favor of privatization, the King also listed a series of programs and subsidies that he continues to support in spite of their challenge to free market principles. ¶4. (U) The King addressed the necessity of privatization, and responded to those who point to the lack of transparency in the sale of public land as prima facie evidence of corruption (Refs A and B). He explained that the sale of public land was needed to pay down Jordan's debt and keep it financially solvent in a time of global economic crisis. Showing his command of the minute details of these deals, the King explained the macroeconomic rationale for selling Aqaba's port and using the proceeds to pay off Jordan's Paris Club debt, as well as the reasons for a potential sale of the King Hussein Medical Center. ¶5. (SBU) The King did not give the government a pass on transparency issues, saying that he "welcomes, and indeed encourages, public criticism when it comes to the question of transparency." Even so, he roundly criticized the "overdramatization, rumors, and opinions based on total ignorance" used by armchair critics throughout Jordan's media and political elite to stimulate rumors about corruption and the "sale of Jordan" to foreigners. ¶6. (U) King Abdullah also directly addressed recent attempts at character assassination aimed at Royal Court Chief Bassem Awadallah, whose position seemed to diminish as the opposition critique of privatization policies grew (Ref C). The King portrayed Awadallah, PM Dahabi, and GID Director Mohammed Dahabi as part of a cadre of officials that were groomed for their high positions by the late King Hussein: "they are all my father's men and I am proud of them and their accomplishments." Cleaning House -------------- ¶7. (SBU) On the day the interview with the King appeared, AMMAN 00001984 002 OF 002 Ahmad Obaidat, the chairman of the board of the quasi-governmental National Commission for Human Rights (NCHR) was forced to resign. Obaidat, a former PM and director of the General Intelligence Department (GID),was one of 150 high level former government officials and ministers who signed an open letter to the government which directly criticized the government's privatization policies. The letter gave some political weight to what had been so far critiques from behind the scenes, and was likely the final move which forced the King to respond publicly. Obaidat delivered the news personally to a shocked NCHR staff, which now faces vacancies in both the director and board chairman slots. ¶8. (C) Perhaps in recognition of further political shockwaves, some governmental officials have started to change their tunes. Parliament Speaker Abdulhadi Majali, who was previously summoned by the King for a tongue lashing for his alleged role in spreading malicious rumors about Awadallah, gave a speech at the Orthodox Club on July 1 in which he vehemently criticized Obaidat and the other signers of the anti-government memo. PM's Popularity Drops -------------- ¶9. (SBU) The King's commentary comes as the impact of the economy on the government's popularity has become evident. On June 17, the Center for Strategic Studies at the University of Jordan released its latest poll on the Dahabi government's popularity, which showed an eight point drop in the government's favorability rating, from sixty-two percent to fifty-four percent (Ref D). While the pollsters indicated that the drop was a "serious indicator of a decline in public satisfaction over the performance of the government," they also noted that it was consistent with the pattern formed by recent governments. Digging a little deeper into the reasons behind the government's drop in popularity, the poll found that Jordanians were generally pleased with improvements in government services enacted by the Dahabi government, but found fault with its overall handling of the economy. ¶10. (C) Commentators among Jordan's political elite point to the economy as the primary factor behind the government's loss of popularity. Fahed Khitan, managing editor of Al-Arab Al-Yawm, wrote in his column on June 18 that the government is dealing admirably with forces beyond its control. He portrayed the decline as a reminder to the government that the people of Jordan are still looking for action which will smooth out the impact of market fluctuations. Sheikh Hamad Abu Zeid, a tribal MP, criticized the government for not intervening in the market to control rising prices. "People expected the government to create jobs and drive prices lower, but the opposite has happened," he said. Abu Zeid worries that the government's declining fortunes will impact the popularity of MPs like him who are generally supportive in parliament. "The government is ignoring the very deputies that put them into power. Now those deputies are looking bad and are having to answer the questions (about the economy), even though its not their fault," he complains. Comment -------------- ¶11. (C) The King's impassioned defense is a strong signal to his detractors that he intends to use the considerable powers at his disposal to keep Jordan on the path to economic reform. It is also a tacit recognition that he is willing to stand up to the entrenched interests which threaten those reforms, no matter how influential they may perceive themselves to be. Yet for all of the King's attempts to put the conservative genie back in the bottle, it may be ultimately impossible to silence those who have an interest in maintaining the status quo. Visit Embassy Amman's Classified Website at http://www.state.sgov.gov/p/nea/amman Hale