JORDAN AND IRAQ REVIEWING OPTIONS OTHER THAN PARIS

C O N F I D E N T I A L AMMAN 002522

SIPDIS

FOR NEA/I AND NEA/ELA

E.O. 12958: DECL: 08/28/2018
TAGS: EAID PREL IZ JO
SUBJECT: JORDAN AND IRAQ REVIEWING OPTIONS OTHER THAN PARIS
CLUB TERMS TO ADDRESS OUTSTANDING DEBT

REF: A. AMMAN 1789

B. AMMAN 1393

Classified By: Ambassador R. Stephen Beecroft for reasons 1.4 (b) and (
d).


1. (C) In an August 8 meeting with Foreign Minister Salah
Al-Bashir, Charge d'Affaires Rubinstein urged the GOJ to
offer Paris Club debt relief terms to Iraq. Bashir responded
that Jordan and Iraq had discussed the issue during a recent
meeting, but because the debt is to the Central Bank of
Jordan (CBJ),and not commercial debt, Jordan did not have
the flexibility to offer relief on Paris Club terms.


2. (C) Finance Minister Hamed Kasasbeh confirmed to
Ambassador during an August 27 courtesy call that the debt
was indeed owed to CBJ, thereby limiting the extent of
possible relief. Note: Post understands that the debt
accrued as the GOJ compensated local vendors for items
shipped to Iraq under a government-to-government contract
through which Iraq provided oil at extremely discounted rates
in exchange for Jordanian goods. More goods were shipped
than oil received. End note. Nevertheless, Kasasbeh
reported that following Prime Minister Maliki's June visit,
the two countries reached agreement on repayment of the debt
(ref A). He added that an Iraqi technical team was currently
in Jordan to determine the actual amount of the original debt
- Jordan is willing to concede the interest - and to devise a
mechanism for repayment. Iraqi Finance Minister Bayan Jabr
is expected to visit Jordan the first week of September with
a goal of concluding the agreement.

Visit Amman's Classified Web Site
http://www.state.sgov.gov/p/nea/amman/
Beecroft