VZCZCXYZ0016
RR RUEHWEB

DE RUEHAM #2819/01 2831312
ZNR UUUUU ZZH
R 091312Z OCT 08
FM AMEMBASSY AMMAN
TO RUEHC/SECSTATE WASHDC 3648
INFO RUEHRH/AMEMBASSY RIYADH 2034

UNCLAS AMMAN 002819 
 
SENSITIVE 
SIPDIS 
 
FOR ISN (MCNERNEY) 
 
E.O. 12958: N/A 
TAGS: ENRG PREL PGOV JO
SUBJECT: JORDAN SCENESETTER FOR OCTOBER 12-14 VISIT OF ISN PDAS 
MCNERNEY 
 
SENSITIVE BUT UNCLASSIFIED.  NOT FOR INTERNET DISTRIBUTION. 
 
¶1.  (U) Embassy Amman welcomes the October 13-14 visit to Jordan of 
International Security and Nonproliferation Bureau PDAS McNerney. 
Jordan remains one of the United States' strongest partners in 
promoting peace and security in the Middle East and is active in a 
broad range of regional engagement activities. 
 
Summary 
------- 
 
¶2.  (SBU) Summary: King Abdullah is approaching his 10th anniversary 
on the throne of the Hashemite Kingdom of Jordan.  He has used his 
stewardship to drive economic and political reform and advocate for 
stability and moderate governance in the region, within the limits of 
Jordan's influence.  Jordan maintains a close relationship with the 
USG, facilitated by strong military and foreign assistance programs. 
Jordan welcomes other areas of cooperation with the U.S. and has 
recently sought U.S. counsel on ways Jordan can better meet its 
energy needs.  Currently dependent on fossil fuels, Jordan's new 
energy strategy promotes the use of indigenous sources such as oil 
shale, renewable energy, and nuclear energy, for which it has entered 
into relationships for uranium exploration and mining.  End Summary. 
 
Jordan's Engagement with the USG 
-------------------------------- 
 
¶3.  (SBU) Jordan maintains a close relationship with the USG, and 
King Abdullah is firmly supportive of U.S. priorities and 
initiatives.  The United States and Jordan share a long history of 
cooperating to achieve shared goals, many achieved through U.S. 
assistance.  Jordan is appreciative of the recent budget supplemental 
and grants which brought the total amount of non-military aid in 2008 
to USD 561.4 million, an increase of 120% from 2007, making 
Jordanians some of the highest per-capita recipients of foreign 
assistance.  A recent non-binding Memorandum of Understanding signed 
by the Secretary and Foreign Minister Salah Al-Bashir outlined U.S. 
support over the next five years with USD 360 million per year in 
Economic Support Funds (ESF) and USD 300 million per year in FMF. 
USAID's wide range of projects in Jordan strengthens water resources 
management, local governance, health and education systems, the 
judiciary, tourism, protection of the environment, alternative energy 
sources, and economic development.  Jordan in recent years has 
received FMF in the USD 200-300 million range, used, in part, to 
educate over 200 officers in annual IMET programs.  CENTCOM has its 
most extensive exercise program in Jordan, conducting 12 
multilateral/bilateral exercises annually with Jordanian Armed Forces 
support and participation. 
 
Demographics 
------------ 
 
¶4.  (SBU) Jordan's population of 5.7 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 1.8 million UNRWA-registered refugees inside Jordan 
(some of whom live in 13 designated refugee camps).  The vast 
majority of Palestinian-origin Jordanians (including most of the 
registered refugees) however, hold Jordanian citizenship and are 
fully integrated into Jordanian society and dominate the business 
sector. 
 
¶5.   (SBU) Jordan is also host to numerous Iraqis who have fled the 
conflict and its after-effects, and has made 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 already compromised by the large 
influxes of Palestinians.  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 175 million of Jordan's FY 
2008 economic assistance supplement is intended to aid the displaced 
Iraqis in Jordan.  Note: The GOJ's official figure of Iraqi refugees 
is between 450,000-500,000, although some estimates from 
organizations working with the refugees are lower.  End note. 
 
The Economy 
----------- 
 
¶6.  (U) Jordan has few natural resources and is the fourth most water 
poor country.  Nevertheless, King Abdullah has focused heavily on 
economic reforms and GDP growth has averaged almost 6 percent in 
recent years.  Investment from Gulf Arab countries has been strong 
and Jordan has also benefited from exports of phosphate and potash 
(used to produce fertilizer) and garments to the U.S.  It remains 
dependent, however, on remittances from its well-educated populace 
 
working abroad. 
 
¶7.  (U) The King and his advisors continue to foster Jordan's 
transition from an aid-based economy to a self-sustaining, 
trade-based one.  To this end, 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.  As a 
result of bilateral engagement, the U.S. has emerged as Jordan's 
leading trade partner, as Jordan's Free Trade Agreement with the U.S. 
(signed in 2001), and its Qualifying Industrial Zones (QIZs - 
established in 1996 in part to promote Israel-Jordan ties) allow for 
easy access to the American market.  Jordan also belongs to the WTO 
and has or is developing trade relationships and agreements with the 
EU, the Greater Arab Free Trade Area, Singapore, Canada, Pakistan, 
Turkey, and China.  Still, the economic situation is precarious with 
complaints that the benefits of economic reform have not reached the 
masses, a situation exacerbated by the global increases in fuel, 
food, and commodity prices, as well as the depreciation of the 
dollar, to which the Jordanian Dinar is pegged, and resulting 
double-digit inflation. 
 
Politics 
-------- 
 
¶8.  (SBU) King Abdullah advocates political reform, though efforts 
are slowed by a recalcitrant bureaucracy and a conservative 
Parliament.  Members of Parliament primarily hail from East Bank 
tribes - historically, East Bank tribes have been the Hashemites' 
main pillar of support - and accelerated change could alter the 
long-standing status quo they find favorable.  Still, the King has 
made some progress on political reform.  In 2005, he commissioned the 
National Agenda, a document designed to serve as a reform roadmap 
over the next decade.  The GOJ recently enacted a new Political 
Parties Law, which intends to help consolidate and strengthen 
political party activity in the Kingdom, although many civil society 
groups criticized the law for still allowing far too much government 
oversight of parties.  Domestic political opposition (and indeed, the 
only effective political party), lies with the Islamic Action Front 
(IAF), a self-administering branch of the Jordanian Muslim 
Brotherhood (JMB) with six seats in parliament, whose platform is 
based on criticizing Jordan's ties to Israel and the USG.  The Prime 
Minister and cabinet members are all appointed by the King. 
 
Foreign Policy 
-------------- 
 
¶9.  (SBU) Jordanian foreign policy encourages stability by supporting 
moderate governance throughout the region. King Abdullah has publicly 
stated that the lack of progress in resolving the Israeli-Palestinian 
dispute is the greatest threat to stability in the region.  The King 
is a staunch backer of the Annapolis process, and frequently and 
publicly calls for a two-state solution to the Israeli-Palestinian 
crisis.  He backs Palestinian Authority President Mahmud Abbas, whom 
he considers the legitimate representative of Palestinians in both 
the Gaza Strip and the West Bank. 
 
¶10.  (SBU) King Abdullah has supported U.S. goals in Iraq, including 
offering support for Iraqi Prime Minister Nouri Al-Maliki's 
government.  Jordan recently appointed an Ambassador to serve in 
Baghdad, Jordan's first since a 2003 attack on its embassy, and PM 
Dahabi hosted PM Maliki in June.  The visit resulted in the renewal 
of a 2006 oil deal between Iraq and Jordan to provide Jordan with oil 
at discounted prices, although consistent implementation of the deal 
has been hindered by security and technical issues.  In August, the 
King became the first Arab head of state to visit Iraq since the fall 
of Saddam Hussein. 
 
Energy 
------ 
 
¶11. (SBU) To limit Jordan's dependence on foreign oil, King Abdullah 
initiated a civilian nuclear energy program to overcome the economic 
burden of importing energy, complemented by efforts to increase 
renewable energy and add other indigenous sources to Jordan's energy 
mix.  In response to recent hikes in world crude prices, Jordan has 
faced pressure to implement the new strategy as quickly as possible 
and competing priorities have emerged.  The Cabinet suspended in 
August ongoing feasibility studies, tenders, and other activities in 
oil shale exploration within central Jordan for a period of up to 18 
months in order to first explore uranium mining in that region.  The 
GOJ and France recently signed an agreement for the French company 
Areva to mine for uranium.  No agreements have been signed yet to 
provide nuclear reactors. 
 
¶12. (U) In addition to meeting with the French on nuclear energy, 
Jordan has engaged the Chinese and South Koreans.  During the King's 
September visit to China, his sixth trip to the country as part of 
his ongoing efforts to broaden Jordan's ties with Asia, the Jordanian 
delegation signed a non-binding memorandum of understanding on 
 
uranium exploration and several smaller agreements on the peaceful 
uses of nuclear energy and scientific exchanges. 
 
 
Visit Amman's Classified Web Site at 
http://www.state.sgov.gov/p/nea/amman 
 
Beecroft