VZCZCXRO9112
RR RUEHBC RUEHDE RUEHDH RUEHKUK RUEHROV
DE RUEHAM #1426/01 1761552
ZNR UUUUU ZZH
R 251552Z JUN 09
FM AMEMBASSY AMMAN
TO RUEHC/SECSTATE WASHDC 5367
INFO RUEHEE/ARAB LEAGUE COLLECTIVE

UNCLAS SECTION 01 OF 02 AMMAN 001426 
 
SIPDIS 
 
FOR H AND NEA/ELA 
 
E.O. 12958: N/A 
TAGS: PREL PGOV OREP JO
SUBJECT: JORDAN SCENESETTER FOR CODEL SCHIFF 
 
¶1.  (SBU) Summary:  Embassy Amman welcomes the June 27-30 
visit to Jordan of Codel Schiff.  The Codel's visit comes at 
a time of heightened expectations of Middle East peace.  The 
President's Cairo speech and PM Netanyahu's response are 
foremost on the minds of your interlocutors.  Domestically, 
parliament is considering several crucial yet controversial 
economic reforms as the impact of the global financial crisis 
is starting to sink in.  End Summary. 
 
Foreign Policy 
-------------- 
 
¶2.  (SBU) King Abdullah remains focused on the 
Israeli-Palestinian dispute.  He has publicly stated that 
lack of progress on this issue poses the greatest threat to 
stability in Jordan and the region.  He remains a resolute 
advocate of a two-state solution and has responded positively 
to his engagements with SE Mitchell.  The King supports 
Palestinian Authority President Mahmoud 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 some form of responsibility for the West Bank, a 
proposition the late King Hussein formally abandoned in 1988 
and that King Abdullah is determined to resist. 
 
¶3.  (SBU) The King and his government have closely monitored 
regional and domestic reaction to President Obama's Cairo 
speech and Prime Minister Netanyahu's subsequent address. 
The President's speech was viewed in Jordan as a welcome 
gesture and potential turning point in American relations 
with the Muslim world.  Many are now looking for the concrete 
actions that will translate words into action.  Despite PM 
Netanyahu's acceptance of a two-state solution,  his speech 
was met with dismay.  Many Jordanians believe that Israel is 
unwilling to move forward on peace negotiations. 
 
¶4.  (SBU) In Iraq, King Abdullah has supported U.S. goals and 
frequently talks about his belief that Iraq is on a "long, 
slow crawl towards the light."  The King became the first 
Arab head of state to visit Iraq since the fall of Saddam 
Hussein, and Jordan has named an Ambassador to Baghdad, who 
largely remains in Jordan pending the completion of the 
Embassy building.  Jordan has also agreed to send a senior 
level Defense Attache to Baghdad in the near future, and PM 
Nader Dahabi is expected to make his first trip to Iraq soon. 
 
Demographics 
------------ 
 
¶5.  (SBU) Jordan's population of approximately 6 million is 
split primarily between East-Bank Jordanians 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 Palestinian 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 the population. Many Palestinian-origin 
Jordanians (including most of the registered refugees) hold 
Jordanian citizenship, are integrated into Jordanian society, 
and lead the business sector. 
 
¶6. (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 does not 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 has received 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 
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 some 
international organizations and NGOs working with the 
refugees are significantly lower, perhaps in the 70,000 to 
200,000 range. 
 
Jordan's Engagement with the USG 
-------------------------------- 
 
¶7.  (SBU) Jordan maintains a close relationship with the USG 
and benefits from significant strong bilateral military and 
foreign assistance programs. Jordan received USD 561.4 
million in non-military aid in 2008, an increase of 120 
percent over 2007, making Jordanians the highest per-capita 
recipients of foreign assistance.  In 2009, the President 
 
AMMAN 00001426  002 OF 002 
 
 
requested USD 365 million in Economic Support Funds (ESF) and 
USD 335 million in Foreign Military Financing (FMF).  Jordan 
then requested USD 300 million in 2009 supplemental ESF funds 
and USD 200 million in supplemental FMF to help the country 
cope with the affects of the global economic downturn during 
the political reform process.  A non-binding Memorandum of 
Understanding signed in September 2008 outlined U.S. support 
from 2010 to 2014, proposing USD 360 million per year in ESF 
and USD 300 million per year in FMF. 
 
The Economy 
----------- 
 
¶9.  (SBU) With a per capita gross domestic product (GDP) of 
approximately $3,000 and a population of only six million, 
Jordan has one of the smallest economies in the region.  The 
country imports 95 percent of its energy and food needs.  The 
U.S. continues to be one of Jordan's leading trade partners 
thanks to the 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 concerning inclusion of Israeli content. 
Jordan has seen real GDP growth average around 6 percent in 
recent years, but that growth is expected to slow in 2009 due 
to the impact of the global financial crisis.  The Government 
of Jordan (GOJ) has projected 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 
 
-- Remittances from abroad will decline significantly 
(Remittances, which come primarily from the Gulf countries, 
were valued at 19 percent of GDP in 2007). 
 
Parliament 
---------- 
 
¶10.  (SBU) Jordan's parliament has few formal powers, and its 
influence on policy formation is limited.  Members of the 
Senate are appointed by the King directly, and members of the 
Lower House are elected through a system which 
under-represents Jordan's majority Palestinian population. 
MPs cannot write legislation, cannot initiate new spending, 
and have no formal oversight role.  The vast majority of 
bills which the government sends to parliament are passed 
without amendment.  In practice, most Jordanian 
parliamentarians are elected to provide services to their 
constituents in the form of spending on government projects 
in their areas and patronage positions for members of their 
tribe in the bureaucracy and military.  Recently, however, 
MPs have started to challenge the government's political 
positions more openly by amending or defeating legislation. 
 
¶11.  (SBU) Parliament is currently in the midst of an 
extraordinary session, in which an agenda is submitted by the 
King.  That agenda includes complicated and controversial 
legislation such as overhauls of the tax code and social 
security system.  Our contacts are expecting major amendments 
that will drastically alter the content of these bills, and 
worry that they may be defeated outright.  Parliament is also 
debating a law which would expand the political space for 
civil society organizations -- a key bellwether for political 
reform that we are watching closely. 
 
Your Visit 
---------- 
 
¶12.  (SBU) The Israeli-Palestinian conflict will likely 
dominate your discussions in Amman.  We are emphasizing the 
President's commitment to progress in negotiations and the 
need for regional powers such as Jordan to press both sides 
for flexibility.  On the domestic front, it is important for 
Jordanian officials to hear that Washington is watching the 
debate on political reform and expects results. 
 
Visit Amman's Classified Website at 
http://www.state.sgov.gov/p/nea/amman 
Beecroft