GOJ ALERTS STAFFDEL GROVE TO IMMINENT SUPPLEMENTAL

C O N F I D E N T I A L SECTION 01 OF 02 AMMAN 000511 SIPDIS FOR H/RGF AND NEA/ELA, PRM E.O. 12958: DECL: 02/22/2019 TAGS: PREL PGOV JO SUBJECT: GOJ ALERTS STAFFDEL GROVE TO IMMINENT SUPPLEMENTAL REQUEST, REGIONAL CONCERNS REF: AMMAN 472 Classified By: Ambassador R. Stephen Beecroft for reasons 1.4 (b) and ( d). ¶1. (C) Summary: Professional Staff Member Paul Grove of the Senate Appropriations Subcommittee on Foreign Operations discussed Jordan's imminent FY2009 supplemental funding request separately with Jordan's Foreign Minister Salah Al-Bashir, Minister of Planning and International Cooperation (MOPIC) Suhair Al-Ali, and Director of International Policy at the Royal Court Jafar Hassan on February 21. Ali informed Grove that Jordan would likely request $300 million in supplemental Economic Support Funds (ESF),in addition to $360 million in ESF it hoped to receive in FY2010 pursuant to the recently signed Memorandum of Understanding (MOU). The supplemental request comes in the wake of falling investment, remittances, and exports (reftel) as Jordan attempts to fight off the destabilizing impact of the economic crisis, pursue reform, and work to meet the needs of the displaced Iraqi population in Jordan. Hassan informed Grove that the GOJ would request a further $200 million in supplemental Foreign Military Financing (FMF) to support border security, counter terrorism and military infrastructure projects. End Summary. Supplemental Request, Economic Conditions -------------- ¶2. (C) MOPIC Minister Ali informed Staffdel Grove that Jordan planned to request $300 million in supplemental Economic Support Funds (ESF),in addition to the $360 million in ESF it hoped to receive in FY2010 pursuant to the recently signed MOU, and asked if it was reasonable. The GOJ had originally planned to request a $500 million supplemental before taking into account the possible affect of the financial crisis on the U.S. foreign aid budget. The supplemental request would go toward budget support as Jordan battles the destabilizing affects of the economic crisis, pursues reform efforts, and works to meet the needs of the displaced Iraqi population that remains in Jordan. Grove responded that Jordan should fully justify its request and highlight progress on reforms, such as the recently passed anti-trafficking law and the planned amendments to the law governing NGOs. He cited Jordan's ability to spend aid money quickly and efficiently as a positive sign and said it gave credence to the supplemental request. 
 ¶3. (C) Royal Court Director for International Affairs Jafar Hassan said that the GOJ was putting together a request for a further $200 million in supplemental Foreign Military Financing (FMF) to support border security, counter terrorism, and military infrastructure projects. (Note: Infrastructure projects would not be eligible for FMF. End note.) This request is intended in part to bolster the Jordan Armed Forces' (JAF) ability to contribute to regional security and stability. Hassan pointed to Jordan's desire to assist the USG in the retrograde of forces and equipment from Iraq, where the JAF maintains an army field hospital that previously fell under the UN mandate. The JAF also is preparing to contribute a special operations brigade to Operation Enduring Freedom (OEF) in Afghanistan and is planning to send an infantry battalion to reinforce elections security as well as exploring ways to fulfill CENTCOM Commander General Petraeus' request to augment military police and engineering units. Grove replied that the Chairman of the Foreign Operations Subcommittee, Senator Judd Gregg, appreciates Jordan's contributions and friendship and would give the request full consideration. ¶4. (C) Ali and Hassan both highlighted Jordan's economic concerns as it begins to feel the effects of the global financial crisis (reftel). Foreign Direct Investment (FDI) and remittances -- particularly from the Gulf countries -- have greatly diminished as oil prices fall, the global economy worsens, and Jordanians working abroad lose their jobs. Unemployment is expected to go up to 15 percent from 12.7 percent in 2008. Exports have also fallen, and Ali reported that Jordan's trade deficit in 2008 was JD 6.46 billion (USD 9.12 billion) or 75 percent of GDP. She also mentioned that real estate projects have stalled, tourism is on the decline, and banks have cut back on lending. Up until now, the Government has publicly portrayed a "rosy picture" of Jordan's economy, but there are real GOJ concerns that unemployment and economic worries could lead to instability, Hassan asserted. The Post-Gaza Middle East -------------- AMMAN 00000511 002 OF 002 ¶5. (C) Foreign Minister Bashir detailed Jordan's ongoing assistance to Gaza, including the JAF field hospital and the almost daily convoys carrying assistance that is distributed by UNRWA. Commenting on the U.S. Administration's initial approach to the region, Bashir urged the President to speak out against settlement expansion and call on Israel to announce a freeze. He also advocated Senator Mitchell make clear that there is "no room for anyone who does not talk about a two-state solution" and that the administration launch "concrete negotiations that produce a result" rather than a "process." ¶6. (C) Bashir complained that Israel's demand for the release of captured Israeli soldier Gilad Shalit as a condition for a ceasefire was particularly unhelpful. Generally speaking, Israel's approach to the issue of prisoners has undermined Arab moderates such as the Palestinian Authority and the GOJ, which have failed to negotiate releases as effectively as Hizballah and Hamas, Bashir asserted. If moderates are not seen to deliver, he said, it will strengthen Iran, Syria, and Qatar, states that do not support negotiations and support extremists such as Hamas and Hizballah. Hassan stressed that Jordan "will not tolerate" Israel's plan to move ahead on its design of a new ascent to the Mughrabi Gate plan. People will blame Jordan if a right-wing Israeli government deploys armored personnel carriers or troops via the proposed ramp onto the Harem-al-Sharif/Temple Mount, he stated. It is our responsibility and we will not let Israel use us," Hassan said. (Note: Al Bashir was replaced February 23rd as Foreign Minister in a general cabinet re-shuffle. End Note.) ¶7. (U) Staffdel Grove did not have the opportunity to clear this message before departing Jordan. Visit Amman's Classified Web Site at http://www.state.sgov.gov/p/nea/amman Beecroft