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courage is contagious
Viewing cable 04AMMAN8905, JORDAN'S FINANCE MINISTER ON WASHINGTON VISIT,
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Reference ID | Created | Released | Classification | Origin |
---|---|---|---|---|
04AMMAN8905 | 2004-10-31 11:15 | 2011-08-30 01:44 | SECRET | Embassy Amman |
This record is a partial extract of the original cable. The full text of the original cable is not available.
S E C R E T SECTION 01 OF 02 AMMAN 008905
SIPDIS
E.O. 12958: DECL: 10/30/2019
TAGS: EFIN EAID JO IZ
SUBJECT: JORDAN'S FINANCE MINISTER ON WASHINGTON VISIT,
DEBT REDUCTION, CASH SMUGGLING, AND CABINET TURF BATTLES
REF: AMMAN 8045
Classified By: CDA DAVID HALE, REASONS 1.4 (A) & (D).
¶1. (S/NF) SUMMARY: Jordan's Finance Minister Mohammad Abu
Hammour's main concerns remain high oil prices and hope for a
debt swap increase under the Paris Club. He raised the issue
during his recent meetings in Washington on the margins of
the IMF/World Bank meetings, and other senior Jordanian
officials will press for the debt swap increase over the
coming months. On cash smuggling, he said he has asked the
Central Bank Governor to discuss the issue with the head of
Jordan National Bank and, more generally, not to let bank
secrecy inhibit information sharing with the USG. He plans
to push strongly for swift passage of the draft Anti Money
Laundering law. Abu Hammour also provided his views on
control over the Social Economic Transformation Program
funds. He also reported that the settlement of commercial
claims against Iraqi frozen assets was nearly complete and
that the amount restored to Iraq
remains at $250 million. In a separate meeting, he provided
some insights into his current priorities in financial
management in the Ministry of Finance. END SUMMARY.
-------------------
Oil Prices and Debt
-------------------
¶2. (C) On October 17, Finance Minister Mohammad Abu
Hammour told the Charge that his two main preoccupations were
high oil prices and promoting his debt swap proposals. He
said he had raised both issues during his recent visit to
Washington for the IMF/World Bank meetings. On oil prices,
he projects that oil could cost the Jordanian government as
much as $450 million next year. Jordan is continuing its
discussions with Saudi Arabia to extend its 50,000
barrels/day oil grant beyond April of next year. Jordan is
also holding similar discussions with the UAE and Kuwait.
(NOTE: ECOUNS' subsequent conversation with IMF staff
indicated that neither Kuwait nor UAE had provided
oil-related grant assistance since April 2004. END NOTE.)
¶3. (C) Abu Hammour repeated his previously-stated desire to
persuade the Paris Club to agree to let Jordan increase from
30 to %50 pct the portion of Jordanian external debt that may
be renegotiated by means of debt swaps, thereby allowing
Jordan to reduce its overall debt burden and debt servicing
payments. Although he had been told by the Paris Club
leadership this past summer that such a move would be against
Paris Club rules, he intends to try again. He mentioned that
Under Secretary Larson had asked Abu Hammour for data and
more information on the proposal, and Abu Hammour promised to
provide it shortly. (NOTE: This was faxed to U/S Larson on
October 25. END NOTE.)
¶4. (C) Abu Hammour had met with the King on October 11 to
discuss raising the debt swap limit. They had agreed that
Jordan needs to continue to push for support for this from
Paris Club members. Abu Hammour had also spoken with Royal
Court Minister Samir Rifai to remind him that the King should
regularly raise the issue in meetings with creditor countries.
--------------------------------------------- -----------
Cash Smuggling; Arab Bank; the Anti Money Laundering Law
--------------------------------------------- -----------
¶5. (S) With respect to the Iraq cash smuggling allegations
(reftel), Abu Hammour said he had asked Central Bank of
Jordan Governor Umayya Toukan to invite the head of Jordan
National Bank in to discuss it. He had also discussed the
case with the visiting Iraqi Trade Minister and Deputy Bank
Governor. He said that he was told that the cash had been
wrapped in Jordan National Bank wrappers because the CBI had
had those available at the time. (COMMENT: The issue remains
the bills themselves, not the wrappers from JNB. The serial
numbers for a large portion of the cash indicated that the
bills had been shipped to
JNB at some point before reaching Baghdad. END COMMENT.)
¶6. (S) On our earlier requests for transaction information
for certain Arab Bank accounts, Abu Hammour
said that he had told Governor Toukan he could provide us
with the information. He said he was confident that secrecy
could be maintained on the U.S. side.
¶7. (S) Abu Hammour said that he had briefed Prime Minister
Fayez on his visit to Washington and in particular on
Washington's interest in resolving the anti money laundering
issue. He said that the draft law on AML is still stuck in
the Cabinet, with some members against it, claiming that it
might dissuade foreign investors. Abu Hammour said he has
been arguing exactly the opposite, that a clear AML law will
help attract foreign investment. Fayez told Abu Hammour to
raise the issue again after the Cabinet re-shuffle (Note:
which occurred on Oct. 24. End Note.) Abu Hammour said the
law must be approved and that it will provide a legal
framework for the CBJ, including in the sharing of
information. Abu Hammour expects no problems in Parliament
and said that he would tell Parliament that passage of the
law would help increase donor support for Jordan.
----------------------------------
The Planning Minister and the SETP
----------------------------------
¶8. (C) Abu Hammour then raised the issue of the Social and
Economic Transformation Program which is overseen by Planning
Minister Bassem Awadallah and which has received the largest
share of its funding from local currency associated with the
USAID cash transfer. He said the Cabinet had approved the
SETP for 2005-2006 in May. The government will approve the
new plan out of the regular budget. New projects would
appear as line items in ministries other than the Ministry of
Planning.
¶9. (C) According to Abu Hammour, the IMF had insisted on
carrying out an evaluation of the SETP. Based on this
evaluation, the IMF concluded that the SETP's impact on
Jordan's economy has been less than expected. The IMF feels
strongly that the SETP should not be spent on pork barrel
projects and wants projects to be evaluated by an external
auditor.
------------
Iraqi Assets
------------
¶10. (C) When asked about the closing out of the commercial
claims against frozen Iraqi assets, Abu Hammour said he
expected the process to be completed soon.
--------------------------
Priorities in the Ministry
--------------------------
¶11. (C) In a subsequent meeting on October 18, Abu Hammour
told the Charge that this year in the Ministry he had focused
on tax administration. He intends to move next to customs.
He has approved a five-year financial management reform plan
for the Ministry. All government directorates in the country
will soon be linked electronically with the Finance Ministry.
He had briefed the King on these plans the previous week.
Abu Hammour believes these changes can increase tax revenues
without the need to increase tax rates, particularly in
increasing revenues from those currently avoiding paying
taxes. Now there is a single treasury account instead of the
thousands previously; the Ministry can now carry out a daily
financial position of the government.
-------
COMMENT
-------
¶12. (C) On anti-money laundering, bank secrecy and cash
smuggling, Abu Hammour is saying all the right things. It
remains to be seen whether this will translate into greater
cooperation by the Central Bank Governor, who well remembers
how the PM stood aside last year when the Governor was
severely criticized in Parliament for sharing information on
Hamas accounts with the USG. Based on a follow-up meeting
with Deputy Governor Faris Sharaf, there are signs for
optimism.
¶13. (C) We have heard previously from Abu Hammour about his
struggles with the Planning Minister over controlling
government spending and bringing all of the government's
spending under the Finance Ministry. Now that both have
retained their positions in the new cabinet, we expect this
tug-of-war to continue for the near future, with neither side
gaining the advantage over the other for long. Abu Hammour
will wield his competence and successes against Awadallah's
forceful personality and close ties to the King. It should
continue to be an interesting show.
¶14. (U) Baghdad minimize considered.
HALE