VZCZCXRO6572
RR RUEHBC RUEHDE RUEHDH RUEHKUK RUEHROV
DE RUEHAM #1035/01 1251341
ZNR UUUUU ZZH
R 051341Z MAY 09
FM AMEMBASSY AMMAN
TO RUEHC/SECSTATE WASHDC 5032
INFO RUEHEE/ARAB LEAGUE COLLECTIVE

UNCLAS SECTION 01 OF 02 AMMAN 001035 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL PGOV OREP JO
SUBJECT: SCENESETTER FOR THE VISIT OF CODEL PELOSI TO AMMAN 
 
¶1. (SBU) Embassy Amman welcomes the May 7-8 visit to Jordan 
of CODEL Pelosi. Jordan is one of the United States' 
strongest partners in the Middle East. In line with the 
CODEL's request, we have received tentative agreement for an 
audience with King Abdullah.  We expect that the topics of 
discussion in the audience will follow up on the substance of 
the King's meetings in Washington, including Arab reaction 
tot he King's visit, formation of a Palestinian government, 
the state of play in Iraq, and preferred approaches to Syria 
and Iran. As background for these meetings, Embassy Amman 
provides the following information. 
 
¶2. (SBU) King Abdullah recently marked his 10th anniversary 
on the throne. He has used his stewardship to drive a limited 
amount of economic and, to a lesser extent, political reform. 
 He has advocated 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 has again 
requested supplemental aid, in part to help the country cope 
with the affects of the global economic downturn and in part 
to keep it afloat in the absence of political reform. 
 
The Economy 
----------- 
 
¶3. (SBU) Jordan has few natural resources and is one of the 
most water poor countries 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 95 percent of 
its energy and food needs. To overcome these challenges, King 
Abdullah has focused the government 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, and the Greater Arab Free Trade 
Area. 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 has seen real GDP growth 
average around 6 percent in recent years. 
 
¶4. (SBU) Such growth is expected to slow in 2009 due to the 
impact of the global financial crisis. 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 percent in 
2008 to -3 percent in 2009; government revenue will be 
reduced 7 percent by $500 million in 2009; tourism growth 
will drop from 16 percent in 2008 to -2 percent in 2009; 
unemployment will rise to 15 percent; and remittances from 
abroad will decline significantly (remittances were valued at 
19 percent of GDP in 2007). Foreign direct investment is also 
expected to fall as Gulf investors repatriate capital. 
 
Politics 
-------- 
 
¶5. (SBU) The King appoints Jordan's Prime Minister, who then 
selects cabinet ministers. King Abdullah publicly advocates 
political reform, though efforts in this regard has largely 
stalled in the past because of a conservative political 
establishment, a recalcitrant bureaucracy, lack of focus on a 
single reform plan, 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. 
 
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. The 
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 
 
AMMAN 00001035  002 OF 002 
 
 
greatest threat to stability in the region, and he has 
responded positively to his engagements with SE Mitchell. 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 the late 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. PM Dahabi is expected to make his 
first trip to Iraq soon. 
 
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 percent 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). Unofficial estimates 
put the total Palestinian-origin population as a slight 
majority of Jordanians. Many Palestinian-origin Jordanians 
(including most of the registered refugees) 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. Jordanian 
officials have 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. 
Visit Amman's Classified Website at 
http://www.state.sgov.gov/p/nea/amman 
Beecroft