Identifier
Created
Classification
Origin
09AMMAN779
2009-03-26 13:42:00
CONFIDENTIAL
Embassy Amman
Cable title:  

SCENESETTER FOR VISIT OF CODEL MCCONNELL TO AMMAN

Tags:  PREL PGOV OREP JO 
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ZNR UUUUU ZZH
R 261342Z MAR 09
FM AMEMBASSY AMMAN
TO RUEHC/SECSTATE WASHDC 4761
INFO RUEHAD/AMEMBASSY ABU DHABI 1305
RUEHGB/AMEMBASSY BAGHDAD 6205
RUEHEG/AMEMBASSY CAIRO 3977
RUEHBUL/AMEMBASSY KABUL 0200
RUEHRO/AMEMBASSY ROME 1595
RUEHTV/AMEMBASSY TEL AVIV 1633
RUEHDE/AMCONSUL DUBAI 0478
RUEHJM/AMCONSUL JERUSALEM 5436
UNCLAS SECTION 01 OF 03 AMMAN 000779 

SIPDIS
SENSITIVE

FOR NEA/ELA AND H

E.O. 12958: N/A
TAGS: PREL PGOV OREP JO
SUBJECT: SCENESETTER FOR VISIT OF CODEL MCCONNELL TO AMMAN

UNCLAS SECTION 01 OF 03 AMMAN 000779

SIPDIS
SENSITIVE

FOR NEA/ELA AND H

E.O. 12958: N/A
TAGS: PREL PGOV OREP JO
SUBJECT: SCENESETTER FOR VISIT OF CODEL MCCONNELL TO AMMAN


1. (SBU) Embassy Amman welcomes the April 8-11 visit to
Jordan of CODEL McConnell. Jordan remains one of the United
States' strongest partners in the Middle East. Per the
CODEL's request, we have received tentative agreement for an
audience with King Abdullah and are seeking a meeting with
new Foreign Minister Nasser Judeh. Likely topics of
discussion in these meetings include regional politics,
specifically the Israeli-Palestinian conflict, the state of
play in Iraq, and preferred approaches to Syria and Iran.
The global economic crisis, its impact on Jordan, and
potential effect on U.S. assistance levels may come up as
well. As background for these meetings, Embassy Amman
provides the following information.


2. (SBU) King Abdullah recently marked his 10th anniversary
on the throne of the Hashemite Kingdom of Jordan.
Celebrations of his ascension will take place later this
year; the actual date of his ascension is seen as a time of
mourning for the late King Hussein. King Abdullah has used
his stewardship to drive economic and, to a more limited
degree, political reform and to advocate stable, moderate
governance in the region. Jordan maintains a close
relationship with the USG and benefits from significant
strong military and foreign assistance programs. As in the
past, Jordan is again requesting supplemental aid, in part to
help the country cope with the affects of the global economic
downturn.

The Economy
--------------


3. (SBU) Jordan has few natural resources and is the fourth
most water poor country in the world. With a per capita
gross domestic product (GDP) of about $3,000 and a population
of nearly six million, Jordan has one of the smallest
economies in the region. The country imports about 95% of
its energy and food needs. To overcome these challenges,
King Abdullah has focused the government heavily on economic
reforms, such as lifting fuel subsidies, reducing external
debt, liberalizing trade, and developing renewable, nuclear
and other indigenous energy resources. The GOJ has worked
closely with USAID to reform its regulatory environment and
to encourage foreign investment by making the Kingdom a good
place to do business. Jordan joined the World Trade
Organization in 2000 and is developing trade relationships

and agreements with the EU, the Greater Arab Free Trade Area,
Singapore, Canada, Pakistan, Turkey, and China. The U.S.
continues to be one of Jordan's leading trade partners thanks
to U.S.-Jordan Free Trade Agreement (FTA) which entered into
force in 2001 and takes full effect in 2010, and the
Qualifying Industrial Zones (QIZs) which allow duty and quota
free access to the U.S. for goods that meet certain rules of
origin including Israeli content. As a result of these
efforts, Jordan saw real GDP growth average around 6 percent
in recent years, boosted by investment from Gulf Arab
countries, sales of phosphate and potash (used to produce
fertilizer),and exports of garments to the U.S.


4. (SBU) Such growth is expected to slow in 2009 due to the
impact of the global financial crisis. Although conservative
monetary policies helped protect Jordan from immediate
external shocks, Jordan's economy is starting to feel the
effects of the crisis as weak domestic and international
demand and tightening credit have caused local companies to
lose business, suffer cash flow problems, and lay off
employees. The Government of Jordan (GOJ) projects the
following: export growth will drop from 38% in 2008 to -3% in
2009; government revenue will be reduced 7% by $500 million
in 2009; tourism growth will drop from 16% in 2008 to -2% in
2009; unemployment will rise to 15%; and remittances from
abroad will decline significantly due to the return of
Jordanian expats from the Gulf (remittances were valued at
19% of GDP in 2007). Foreign direct investment is also
expected to fall as Gulf investors repatriate capital. The
GOJ points to such indicators to demonstrate that the
pressure being placed on Jordan's budget and economy can
negatively affect its fiscal and monetary stability.

Politics
--------------


5. (SBU) The King appoints Jordan's Prime Minister and

AMMAN 00000779 002 OF 003


consults closely with the PM on the selection of cabinet
ministers. King Abdullah advocates political reform, though
efforts in this regard have been slowed by a recalcitrant
bureaucracy, a conservative political establishment, and the
GOJ's prioritization of economic reform. The government is
dominated by East Bank tribes--historically, a key pillar of
royal authority--and accelerated change could alter the
long-standing status quo they find favorable. Domestic
political opposition (and indeed, the most effective
political party) lies with the political wing of the
Jordanian Muslim Brotherhood, the Islamic Action Front, which
holds six seats in parliament and relies for support
primarily on Jordan's Palestinian-origin population.
Jordan's Prime Minister, Nader Al-Dahabi, reshuffled his
Cabinet in late February; the reshuffle, which brought in
more conservatives, has received mixed reviews.

Foreign Policy
--------------


6. (SBU) Jordanian foreign policy encourages stability by
supporting moderate governance throughout the region, and the
GOJ has been a reliable member of the moderate Arab camp. A
primary foreign policy concern for King Abdullah is the
Israeli-Palestinian dispute. The King has publicly stated
that the lack of progress in resolving this issue is the
greatest threat to stability in the region, and he has
responded positively to the appointment of SE Mitchell, whom
he has met twice in Amman. The King strongly advocates a
two-state solution to the Israeli-Palestinian problem and
supports Palestinian Authority President Mahmud Abbas, whom
he considers the legitimate representative of Palestinians in
both the Gaza Strip and the West Bank. Jordanian officials
consistently express concern that Jordan will be asked to
assume a degree of guardianship of the West Bank, which King
Hussein formally abandoned in 1988.


7. (SBU) King Abdullah has supported U.S. goals in Iraq,
including engaging with Iraqi Prime Minister Nouri
Al-Maliki's government, whom PM Dahabi hosted in June 2008.
Just months later in August, the King became the first Arab
head of state to visit Iraq since the fall of Saddam Hussein,
and shortly thereafter Jordan named an Ambassador to Baghdad,
who largely remains in Jordan pending projected completion of
the Embassy building in Baghdad in May. Jordan has also
agreed to send a Defense Attache at the senior level to
Baghdad in the near future.

Jordan's Engagement with the USG
--------------


8. (SBU) Jordan maintains a close relationship with the USG,
and King Abdullah firmly supports U.S. priorities and
initiatives. The United States and Jordan share a long
history of cooperating to achieve shared goals, cooperation
that is often facilitated by U.S. assistance. Jordan
received USD 561.4 million in non-military aid in 2008, an
increase of 120% over 2007, making Jordanians some of the
highest per-capita recipients of foreign assistance. A
non-binding Memorandum of Understanding signed in September
2008 by then Secretary of State Rice and then Foreign
Minister Salah Al-Bashir outlined U.S. support over the next
five years proposing USD 360 million per year in Economic
Support Funds (ESF) and USD 300 million per year in Foreign
Military Financing (FMF). Additionally, Jordan recently
requested USD 300 million in 2009 supplemental ESF funds and
USD 200 million in supplemental FMF through the Ministry of
Planning and Cooperation and the Jordanian Armed Forces
(JAF),respectively.

Demographics
--------------


9. (SBU) Jordan's population of approximately 6 million is
split primarily between East-Bank Jordanians (Jordanians
whose families trace their heritage to the East Bank of the
Jordan River),and Palestinian-origin Jordanians (and their
descendants) who arrived in Jordan in 1948 after the first
Arab-Israeli war, and in 1967, following Israel's occupation
of the then-Jordanian West Bank. There are approximately 1.9
million UNRWA-registered refugees inside Jordan (some of whom
live in 13 designated refugee camps). Many

AMMAN 00000779 003 OF 003


Palestinian-origin Jordanians (including most of the
registered refugees),however, hold Jordanian citizenship,
are integrated into Jordanian society, and lead the business
sector.


10. (SBU) Jordan also hosts numerous Iraqis who have fled
the conflict and its after-effects, and has made some efforts
to extend access to social services to them. The GOJ is
reluctant to formally classify the Iraqis as refugees,
because of concerns that a new permanent refugee populace in
Jordan would further erode the demographic position of East
Bankers. The GOJ emphasizes that hosting the Iraqis has been
a burden on the budget, and seeks international aid to ease
their already tight fiscal situation. USD 200 million of
Jordan's FY 2008 economic assistance supplemental was
intended to aid the displaced Iraqis in Jordan. Note:
Jordanian officials typically put the number of Iraqi
refugees at between 450,000-500,000; however, estimates from
some organizations working with the refugees are
significantly lower. End note.

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