JORDAN SCENESETTER FOR DEPUTY SECRETARY LEW

UNCLAS AMMAN 000323

SENSITIVE
SIPDIS

STATE FOR NEA/ELA

E.O. 12958: N/A
TAGS: PGOV PREL ECON EAID JO
SUBJECT: JORDAN SCENESETTER FOR DEPUTY SECRETARY LEW

REF: A. AMMAN 320

B. AMMAN 310

C. AMMAN 307

D. AMMAN 219

E. AMMAN 218

F. AMMAN 092

G. 09 AMMAN 2804


1. (SBU) Summary: Embassy Amman warmly welcomes your visit,
which will allow us to engage the Government of Jordan (GOJ)
at the highest levels. We have requested an audience with
King Abdullah and confirmed meetings with the Foreign
Minister and Minister of Planning and International
Cooperation. The end of 2009 was marked with a flurry of
political changes in Jordan, with the King dissolving the
parliament in November. Separately, he dismissed the cabinet
and named a new Prime Minister, who formed a new cabinet, in
December. The new cabinet, in accordance with the
constitution, has begun issuing "temporary" laws in the
absence of parliament, as a way to move its agenda forward
until parliamentary elections, scheduled to take place during
the fourth quarter of 2010, occur. Regional tensions
continue to capture the attention of the Jordanian
leadership, particularly the stalled peace negotiations
between the Palestinians and Israelis and the situation
regarding Iran's nuclear program, two issues seen as linked
by Jordanian interlocutors. In addition to domestic and
regional security concerns, Jordan's leadership is
preoccupied with managing a tight budgetary situation. The
2010 Jordanian budget includes $7.7 billion in expenditures,
a $1.43 billion deficit before grants, and 20% cuts in
capital expenditures. As a result, GOJ agencies are
curtailing spending and seeking additional financial and
technical assistance from the USG and others. In terms of
post management issues, we continue to focus on security and
space. End summary.

Political Changes
--------------


2. (SBU) The King constitutionally dissolved the Parliament
in late November 2009. The parliament was widely perceived
as ineffective. Cooperation between the then-cabinet and
parliament had deteriorated to such an extent that only a
minimal amount of legislation was offered for parliamentary
consideration, most of which was stymied or, if approved,
mangled in the process, according to parliamentary observers.



3. (SBU) Following the King's dissolution of the parliament,
he exercised a constitutional clause which allowed him to
extend the normal constitutionally required four-month window
for new elections. Palace statements indicated that this was
done to reform the election law in order to improve a process
which was strongly criticized domestically for favoring
rural, East Bank communities over urban communities with
large Palestinian-origin populations during the 2007
election. The King has established a ministerial-level
committee to consider electoral law reforms and announced
that parliamentary elections will be held in the last quarter
of 2010.


4. (SBU) In early December, the King accepted the resignation
of then-Prime Minister Nader Dahabi and appointed to replace
him entrepreneur Samir al-Rifa'i, who is a former official
and advisor to the King in the Royal Court, Foreign Minister
Judeh's cousin, and the son of former Prime Minister and
Upper House Speaker Zayd al-Rifa'i. In his designation
letter to Rifa'i, the King emphasized, among various reform
efforts, the need to fight corruption.


5. (SBU) Along with the new Prime Minister, a new 29-member
cabinet was named and officially sworn in on December 14.
Local commentators note a lack of new faces in the cabinet,
with 13 returning ministers and seven who served in previous
governments (ref G). Analysts believe that the government,
as a whole, will ultimately turn out to be conservative
rather than reform-oriented in its decision-making. In the
absence of a sitting parliament, the new government has begun
to pass so-called "temporary laws" or legislation enacted
without parliamentary approval, which will theoretically be
subject to parliamentary re-evaluation once new members are
elected and seated. Some commentators see this as a way for
the government to pass legislation which otherwise would not
have made it through a sitting parliament. For example, much
needed tax reform laws, which the previous parliament
opposed, were recently enacted as well as a law on renewable
energy (ref E).

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


6. (SBU) During your visit, you will hear from GOJ
interlocutors their concern on the lack of progress in Middle
East Peace negotiations. King Abdullah has said publicly
that the lack of progress is the greatest threat to stability
in the region and hurts U.S. credibility in the region. King
Abdullah further asserts that the lack of meaningful progress
hurts the ability of the United States to advance its
interests on multiple issues in the region, including on
Iran. Jordan also considers settlement activities, home
demolitions, and evictions in Jerusalem to be particularly
destabilizing and unhelpful in restarting negotiations. The
King has a keen interest in preserving Jordan's role in
administering the Haram al-Sharif/Temple Mount complex in
Jerusalem and in overseeing other Islamic and Christian holy
sites in Jerusalem.


7. (SBU) The King remains a resolute advocate of a two-state
solution and has responded positively to his engagements with
SEMEP Mitchell. Jordanian officials consistently express
concern that Jordan will be asked to assume some form of
responsibility for the West Bank, a proposition that King
Abdullah consistently resists, as does an overwhelming
percentage of the Jordanian public. Many Jordanians
currently believe that Israel is unwilling to move forward on
peace negotiations.


8. (SBU) Jordan has expressed concerns regarding Iran's
nuclear program (ref B). Some Jordanians link Iran to
regional instability and terrorist organizations Hamas and
Hizbollah and argue that regional consensus on Iran depends
on meaningful movement on Palestinian-Israeli peace
negotiations.


9. (SBU) Jordan plays a positive role in regional security
efforts, including in Iraq and Afghanistan. Jordan supports
a conditional U.S. withdrawal from Iraq that prevents chaos
in Iraq, which would impact Jordan, and which limits the
Iranian influence there. Despite local press reporting on
Jordan's role in Afghanistan, Jordan will continue its
security cooperation in Afghanistan. During your meetings
here, officials will likely raise, as they recently did in
Washington, the issue of Jordan providing further support in
Afghanistan in exchange for additional economic assistance
through an anticipated Afghanistan supplemental appropriation
(ref D).


10. (SBU) Jordan hosts numerous Iraqis who have fled the
conflict and its after-effects and has provided them with
access to some social services. The GOJ does not formally
classify the Iraqis as refugees, because of concerns that a
new permanent refugee populace in Jordan, in addition to the
already sizable Palestinian refugee population, would further
erode the demographic position of East Bankers. The GOJ
emphasizes that hosting the Iraqis has been a burden on the
budget, and Jordan has received international aid to ease
their already tight fiscal situation. Jordanian officials
have previously placed the number of Iraqi refugees between
450,000 and 500,000, but have now backed away from specific
numbers of late in the face of estimates from most
international organizations and NGOs working with the
refugees that are significantly lower, perhaps in the 100,000
to 200,000 range. The real numbers are uncertain in the
absence of a needs assessment study on Iraqis in Jordan,
which the U.S. and others have been urging. Displaced Iraqis
in Jordan are integrated and live within Jordanian
communities, not in refugee camps.

Budget Challenges and Impact on USG
--------------


11. (SBU) Your visit also comes as Jordan faces a difficult
budget environment (ref A). The 2010 budget includes $6.74
billion in projected revenues and $7.71 billion in
expenditures and has a $1.4 billion deficit before grants,
which is 5.8% of Jordan's GDP (estimated at $24.7 billion for
2010),The 2010 budget features 20% cuts to capital
expenditures and 1.4% cuts to current expenditures and will
impact GOJ agencies by curtailing their ability to hire new
employees and forcing additional cuts in overtime, official
travel, and purchases of vehicles and furniture. Existing
reform and development projects requiring new staff and/or
construction will also face financial constraints. Weak
growth in 2009 will translate to lower income and sales tax
revenues this year (taxes on 2009 income will be paid in
2010). This along with a downward trend for the collection
of land sales and other fees by the GOJ in 2010 portends an
even more precarious budget situation during the second half
of 2010. This budget environment has already resulted in
additional requests from the GOJ for financial and technical
assistance.

Assistance MOU
--------------


12. (SBU) On September 22, 2008, Jordan and the U.S. signed a
memorandum of understanding (MOU) related to development,
economic, and military assistance. The agreement laid out a
five-year non-binding annual commitment of economic support
funds (ESF) ($360 million) and foreign military funds (FMF)
($300 million). (Note: The FY 2011 OMB budget submission
includes $360 million in ESF and $300 million in FMF for
Jordan. End note.) In turn, a side letter spelled out the
joint intent to expand cooperation in the political and
economic arenas. The side letter draws on the 2006 Jordanian
"National Agenda" reform plan and identifies areas of mutual
cooperation to be discussed in separate economic and
political bilateral dialogues. A bilateral political
dialogue meeting focused on equality for women under the law,
media freedom, religious tolerance and freedom, prison
conditions and inmate treatment, good governance, and a
strong civil society was held in Amman in January 2010 with
DRL A/S Posner, S/P Director Slaughter and NEA PDAS Schlicher
leading the USG delegation (ref F). GOJ officials have
proposed the bilateral economic dialogue take place in April
in Washington.

USAID's Focus
--------------


13. (SBU) The USAID Mission in Jordan is the key conduit of
$360 million in ESF assistance to Jordan. The cash transfer
program representing no more than 45% of the assistance
bolsters Jordan's short-term stability by helping the GOJ pay
down external non-military debt. The program is conditioned
on policy reform across sectors and results in the GOJ
programming an equivalent amount of local currency each year
for mutually agreed priority development projects. USAID
projects have touched and continue to improve the lives of
millions of Jordanians. Among the successes, USAID
assistance has renovated or equipped 318 health centers,
constructed six major water and wastewater treatment plants
serving four million people, helped create 20,000 jobs in the
tourism sector, and will build up to 31 new schools and
renovate 120 schools serving 100,000 students throughout the
country by 2012.

Post Security and Growth
--------------


14. (SBU) Space and security are the biggest management
issues for Embassy Amman. Since 2002, Post has grown 70% in
the number of positions. Within the past year, the north
chancery courtyard has been filled in with office space. OBO
did not fund the purchase of vacant lots adjacent to the
Embassy compound as recommended by OBO's business plan, and
construction of private homes has begun on some of the lots.
Post will implement in 2010 a perimeter security upgrade.
The recent suicide bombing in Afghanistan has focused
domestic and regional attention on security cooperation
between the U.S. and Jordan. Though a January 2010 attack on
an Israeli convoy in Jordan failed, the attack and the use of
a roadside bomb are negative indicators for the general
security environment.

Beecroft