JORDAN: SCENESETTER FOR VICE PRESIDENT BIDEN

S E C R E T AMMAN 000459 NOFORN SIPDIS STATE FOR NEA/ELA, NEA/FO E.O. 12958: DECL: 02/25/2020 TAGS: OVIP EAID PGOV PREL JO SUBJECT: JORDAN: SCENESETTER FOR VICE PRESIDENT BIDEN Classified By: Ambassador R. Stephen Beecroft for reasons 1.4 (b) and ( d). ¶1. (S//NF) Summary: Mr. Vice President, Embassy Amman warmly welcomes you to Jordan. As you arrive, Jordan continues to face some of the most troubling challenges of King Abdullah's 10-year reign. Jordan has been hit hard by the global economic slowdown and is heavily aid-dependent. The pared-down 2010 national budget, which still includes a USD 1.43 billion deficit before grants, has imposed painful cuts across the board, including a 20 percent cut in capital expenditures. Jordan's domestic political scene remains unsettled, and the government is constitutionally ruling by decree following the King's late November 2009 dissolution of parliament, a body considered by many Jordanians to have been selected through government-manipulated elections. Samir Rifai, the new Prime Minister, is currently overseeing an inter-ministerial committee drafting amendments to the electoral law and has promised to unveil the amended law in May, with elections currently scheduled to take place during the last quarter of 2010. ¶2. (S//NF) Regional tensions also continue to capture the attention of the Jordanian leadership. Amman is particularly focused on the perceived stalled peace negotiations between the Palestinians and Israelis and Iran's evolving nuclear program and growing regional influence, which Jordanian officials view as distinct issues. The solution to both is seen as linked by Jordanian interlocutors. At the same time, Jordan has made significant contributions in Afghanistan and has worked to improve regional security by encouraging Syria to seek a moderate Arab alternative to Iranian influence and strengthening ties to Baghdad. End Summary. Budget Challenges and Impact on USG -------------- ¶3. (C) Your visit comes as Jordan faces a difficult budget environment. The 2010 budget includes USD 6.74 billion in projected revenues and USD 7.71 billion in expenditures (83 percent of which is accounted for by Jordan's bloated civil service and military patronage system) and has a USD 1.4 billion deficit before grants, which is 5.8 percent of Jordan's GDP (estimated at USD 24.7 billion for 2010). The 2010 budget features 20 percent cuts to capital expenditures and 1.4 percent 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 sale 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 requests from the GOJ for additional USG financial and technical assistance. Assistance MOU -------------- ¶4. (C) 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) USD 360 million) and foreign military funds (FMF) USD 300 million). (Note: The FY 2011 OMB budget submission includes $360 million in ESF and USD 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 senior State Department officials. GOJ officials have proposed that the bilateral economic dialogue take place in April in Washington. Political Changes -------------- ¶5. (S//NF) The King constitutionally dissolved the Parliament in late November 2009. The public supported the King's decision because parliament was widely perceived to have been elected in manipulated elections and was seen as corrupt and ineffective. Cooperation between the then-cabinet and parliament had deteriorated to such an extent by late summer 2009 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. ¶6. (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 indicate that this was done to reform the election law, which strongly favors rural, East Bank communities over urban communities with large Palestinian-origin populations. The King has established a ministerial-level committee, overseen by Prime Minister Rifai, to draft electoral law reforms and announced that parliamentary elections will be held in the last quarter of ¶2010. However, there have been no meaningful consultations with electoral reform advocates to date and few believe that the new law will produce any significant changes. ¶7. (SBU) In early December, the King requested the resignation of then-Prime Minister Nader Dahabi and appointed to replace him Samir Rifai, who is a former official and advisor to the King in the Royal Court, Foreign Minister Nasser Judeh's cousin, and the son of former Prime Minister and Upper House Speaker Zayd Rifai. In his designation letter to Rifai, the King emphasized, among various reform efforts, the need to fight corruption. ¶8. (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. 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. Middle East Peace -------------- ¶9. (S//NF) During your visit, you will hear from GOJ interlocutors their concern on the lack of progress in Middle East Peace negotiations. 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. ¶10. (S//NF) 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 considers settlement activities, home demolitions, and evictions in Jerusalem to be particularly destabilizing and unhelpful in restarting negotiations. The King also 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. ¶11. (S//NF) Recently, the King has adopted a new approach, pressing PM Netanyahu and President Abbas to initiate immediate proximity talks as a means to work towards direct negotiations. Positive progress at the negotiating table, however meager, could provide crucial political cover for President Abbas, affording him a measure of maneuverability. Given his public backing of U.S. efforts, the King also views the lack of progress as damaging to his own credibility and limiting his ability to play a constructive role in the future. Iran -------------- ¶12. (S//NF) Jordan is concerned about Iranian influence in the region, particularly the potentially destabilizing effect of an Iranian nuclear program, support for Hizballah and Hamas, support for the Huthi and other armed groups in Yemen, and Iran's role in Iraq and links with Syria. The King believes that the recent post-election violence in Iran exposes deep fissures in the Iranian polity that "makes the Supreme Leader look a bit less supreme," forcing Iran's leadership to turn inward on domestic issues and limiting their freedom and resources to act internationally. Especially with the recent buildup of U.S. military assets in the Persian Gulf, GOJ contacts fear that Iran will try to counter these perceptions with a dramatic act. ¶13. (S//NF) Jordan's senior leadership draws a direct link between the willingness of Arab states to counter Iran, and progress on Middle East peace, saying that Israeli and Sunni-Arab interests are perfectly aligned with respect to Iran. Jordan will quietly support new UNSC sanctions against Iran, but will be loath to enforce those sanctions in the absence of progress in the Middle East peace negotiations. Without a material improvement in the negotiations, any confrontation with Iran risks backlash from regional publics and Palestinian groups who cast Tehran as their protector. Realization of the two-state solution would consolidate the regional consensus against Iran, Jordan believes. Afghanistan -------------- ¶14. (C) Jordan makes significant contributions to U.S. regional security priorities. In July 2009, Jordan deployed a 712-soldier Ranger Battalion to Afghanistan to provide election security. The Jordanian Armed Forces (JAF) has deployed two battalions in rotation in support of OEF as of January 2010, despite the cost (pay entitlements) and risk to their soldiers' safety. JAF leaders have intimated that they would advocate even larger-scale deployments (a brigade),if the pay/entitlement expense were not so burdensome. In fact, during the Joint Military Commission in November 2009, MG Mash'al Al Zaben, Chief of Staff for Strategy, stated that Jordan would stay in Afghanistan until the last U.S. soldier came home. ¶15. (S/NF) Following the December 30 suicide bombing by a Jordanian national in Khost, Afghanistan, Jordan has experienced increased calls by opposition groups and non-governmental figures to explain its Afghanistan assistance and end its security cooperation with the United States. So far, such calls and commentary in the press have received no traction with the government, which has vigorously and publicly defended its efforts to combat terrorism. Jordanian government officials have privately reiterated a commitment to maintaining their relationship with us, highlighting their deployments in Afghanistan and elsewhere. Syria -------------- ¶16. (S/NF) Jordan increased its engagement with Syria in the last half of 2009, attempting to draw Damascus toward an alignment with moderate Arab states and away from Iranian influence. The King and Syrian President Bashar Al Assad met at least four times in 2009, which resulted in agreements on a number of initiatives, including border demarcation, customs procedures, and commercial transport. Despite recent agreements, Jordanian officials continue to be skeptical of Syrian intentions to follow through. Iraq -------------- ¶17. (C) Jordan has been a leader in engaging with Iraq, reaching out to promote bilateral trade and encouraging Iraq to build stronger ties with Arab states rather than with Iran. The King became the first Arab Head of State to visit Baghdad, in July 2008, subsequently named an Ambassador to Iraq, and has promised to name a Defense Attach. The King supports Prime Minister Maliki and sees progress as slow, but moving in the right direction. Senior Jordanian leaders have become concerned that increasing tensions between the central government and the Kurdistan Region will erupt in violent conflict and are skeptical that Iraq can maintain stability as U.S. forces withdraw. ¶18. (SBU) Jordan hosts numerous Iraqi "guests" 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 significant amounts of 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 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. Beecroft