US embassy cable - 03AMMAN6506

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JORDAN: EMBASSY COMMENTS ON OPIC APPLICATION

Identifier: 03AMMAN6506
Wikileaks: View 03AMMAN6506 at Wikileaks.org
Origin: Embassy Amman
Created: 2003-10-09 18:02:00
Classification: UNCLASSIFIED
Tags: EINV JO
Redacted: This cable was not redacted by Wikileaks.
This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS AMMAN 006506 
 
SIPDIS 
 
PASS OPIC FOR SHARON WILLIAMS 
 
E.O. 12958: N/A 
TAGS: EINV, JO 
SUBJECT: JORDAN: EMBASSY COMMENTS ON OPIC APPLICATION 
 
1.  (U)  As requested in a memorandum dated September 23, 
2003 from OPIC Applications Officer Sharon Williams, the 
Embassy has reviewed the application for up to $300 million 
in OPIC Political Risk Investment Insurance for an "Aqaba 
Special Economic Zone" project that was submitted to OPIC by 
Citigroup. 
 
2.  (U)  The Aqaba Special Economic Zone (ASEZ) project is a 
high priority of the Jordanian government, which created the 
ASEZ in 2000 as a low-regulation economic area that is 
expected to emerge as a center of industrial, tourism and 
transportation growth in Jordan.  The U.S. Government, 
through the Agency for International Development, has 
provided extensive financial and technical support to this 
effort, including through the financing of the Aqaba 
International Industrial Estate (AIIE), which is located 
within the ASEZ and which has also been designated by the 
U.S. Trade Representative as a Qualifying Industrial Zone 
(QIZ).  The USG is also providing technical assistance to the 
governmental authority in the ASEZ, the Aqaba Special 
Economic Zone Authority (ASEZA).  While eliminating 
unnecessary regulation overall, ASEZA has introduced new, 
modern regulations to ensure protection for the local 
environment and labor. 
 
3.  (U)  The Embassy does not see negative economic 
consequences from the ASEZ project.  Indeed, we share the 
expectation of the Government of Jordan that the ASEZ's 
success will promote increased deregulation and stronger 
economic growth in Jordan as a whole.  We note that the 
financing being considered would add to Jordan's sovereign 
external debt, which the Government of Jordan is working to 
reduce with the support of the International Monetary Fund. 
However, we understand that the financial terms of the 
proposed financing are more favorable than Jordan could 
obtain on domestic debt.  If approved by OPIC, the Embassy 
believes that an eventual decision to draw on such financing 
should be made by the government of Jordan in consultation 
with the IMF. 
GNEHM 

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