US embassy cable - 04AMMAN459

S E C R E T SECTION 01 OF 02 AMMAN 000459 
 
SIPDIS 
 
E.O. 12958: DECL: 01/20/2014 
TAGS: PREL, ECON, EAID, KU, IS, SA, JO 
SUBJECT: PM FAYEZ ON RELATIONS WITH GULF, ISRAEL, IRAQ 
 
REF: A. AMMAN 348 
     B. AMMAN 409 
 
Classified By: Amb. Edward W. Gnehm for reasons 1.5 (b) (d) 
 
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SUMMARY 
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1.  (C)  PM Fayez told the Ambassador January 19 that he did 
not receive a promise from Kuwait to continue its supply of 
free oil to Jordan on his recent trip there, but that he 
would keep "chipping away."  It was more important to 
continue the larger Saudi supply, and he hoped his family 
connections to the Saudi royal family would help.  Fayez 
complained about a statement by Israeli PM Sharon that 
Jordan's support for the ICJ case against the separation 
barrier would hurt Jordan, and argued that Israel must give 
Jordan some accommodation because of the Islamist opposition 
in the new Parliament.  The PM pledged Jordan's continuing 
strong support for efforts to rebuild Iraq, including 
training of Iraqi security forces in Jordan.  Fayez supported 
Rafidain Bank's talks with a technical committee and Jordan's 
transfer of frozen Iraqi assets to the DFI, but asked that 
the promised team be sent to Jordan to address Jordan's 
concerns and settle Jordanian claims against frozen Iraqi 
assets.  END SUMMARY. 
 
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WILL KEEP CHIPPING AWAY AT KUWAIT, SAUDI ARABIA 
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2.  (C)  Prime Minister Faisal al-Fayez told the Ambassador 
and PolCouns January 19 that he was received "like royalty" 
on his recent visit to Kuwait, including being met at the 
airport by "all the royal family except the Amir."  However, 
he said, he did not receive a commitment to continue the 
supply of free petroleum, noting that there is some 
opposition to this in the Kuwaiti Parliament.  "We will keep 
chipping away," he commented.  Fayez credited his warn 
reception to the close relations his father had enjoyed in 
Kuwait, particularly because of his father's opposition to 
Iraq's invasion in 1990.  (FonMin Marwan Muasher commended to 
the Ambassador last week that he, too, had been received 
grandly in Kuwait, but had not gotten a commitment for the 
supply of more free oil - ref a). 
 
3.  (C)  Fayez said that in Kuwait he had given several 
strong statements of support for Saudi Arabia, and hoped 
those statements would be noticed in Riyadh.  Fayez said that 
he hoped to secure continued free oil from Saudi Arabia:  "If 
I get Saudi Arabia, that is nearly half a billion (dollars), 
and I can live without (free oil from) Kuwait and the 
Emirates." 
 
4.  (C)  Fayez said "oil" was not the only important issue he 
focused on in the Gulf.  He mentioned interest by Qatar in a 
USD 400-700 million dollar investment in Aqaba, and interest 
by Kuwait in increasing its investment in the country as 
well.  Fayez said it was also critically important to 
Jordan's economy to reopen the Gulf and Saudi Arabia to 
Jordanian agricultural products.  He hoped that Saudi Arabia 
would soon send a survey team to look at Jordanian 
agricultural production to eliminate fears of contamination 
of Jordanian produce by reuse of wastewater.  (Note:  Water 
and Agriculture Minister Hazem Nasser had earlier told the 
Ambassador that he was pessimistic about the possibility of 
large increases of exports of agricultural products to Saudi 
Arabia after having encountered an uncompromising attitude 
among Saudi officials on a recent trip.  END NOTE.) 
 
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ISRAEL, THE FENCE, AND THE ICJ 
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5.  (S)  Fayez complained about a statement by Israeli PM 
Ariel Sharon on January 19 before the Knesset saying that 
Jordan will "lose a lot" for its support of Palestinian legal 
action against the separation barrier in the International 
Court of Justice (ICJ).  Fayez said that "the wall" affects 
core Jordanian national interests, and Jordan must act on 
those interests, especially when some in Sharon's ruling 
Likud party continue to say that Jordan is Palestine.  He 
said that the GOJ, working through GID Chief Saad Kheir, had 
been sending positive messages about the relationship, but 
also noting that Jordan now has a vocal Parliament of its own 
to deal with.  Fayez said the security relationship with 
Israel remains close, but "they have to make some concessions 
on political issues." 
 
6.  (C)  The Ambassador pressed Fayez to think carefully 
about the core importance of the Jordan-Israel relationship 
and to deal positively with all of its elements.  Jordan, he 
suggested, needed to remain agile and flexible.  For example, 
a GOJ decision to delay all high-level contacts with Israel 
until after the scheduled January 28 visit of FonMin Silvan 
Shalom to Amman had unintended consequences.  It probably 
delayed the extension of the agreement on 8 percent Israeli 
content (which will roll back to 11.7 percent) in goods 
exported to the U.S. from Qualifying Industrial Zones (QIZs). 
 Without high level contact to finalize this agreement, 
Jordanian QIZ factories could lose future contracts, leading 
to layoffs of workers, and a fall in the volume of Jordanian 
exports.  Fayez took the general point, saying that he had 
reaffirmed to all parliamentary political blocs last fall his 
government's strategic commitment to the relationship with 
Israel.  However, with increased pressure from the Muslim 
Brotherhood, "I cannot say that Sharon is nice and wants 
peace."  He promised to talk to Deputy Prime Minister and 
Trade Minister Mohammed Halaiqa to try to solve the QIZ 
issue. 
 
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REBUILDING IRAQ, IRAQI ASSETS 
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7.  (C)  The Ambassador noted that the U.S. is sensitive to 
Iraqi views about their future and constantly assessing the 
best course of action to give sovereignty back to the Iraqis 
and to support Iraqi efforts to build an open and pluralistic 
society and government.  We are trying to reach out more to 
Sunni tribes.  Fayez said these were good steps, and 
reaffirmed Jordan's strong commitment to do what it can to 
rebuild Iraq, including police and military training.  (see 
ref b for Fayez's comments on Muslim Brotherhood criticism of 
the police training program).  The Ambassador thanked Fayez 
for the decision to permit Royal Jordanian to fly to Baghdad 
again.  Fayez said he had asked RJ to limit the number of 
Jordanians on any one flight, hoping to avoid a large number 
of Jordanian casualties and a public outcry should there be 
an "accident." 
 
8.  (C)  The Ambassador thanked Fayez for Jordan's recent 
transfers of Iraqi assets into the Development Fund for Iraq 
(DFI).  The PM supported the transfer of assets to the DFI 
and Rafidain Bank's cooperation with the Iraqi technical 
team.  (We understand a bank representative participated in a 
meeting earlier in the day of the technical committee chaired 
by the Deputy Governor of the Central Bank.)  The 
conversation quickly turned to the absence of a USG-CPA team 
that could address Jordanian concerns.  With such a team, 
Fayez asserted, the GOJ could finish adjudicating Jordanian 
claims on frozen assets and transfer the remaining frozen 
assets to the DFI "within a month." 
 
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PM TO ANNOUNCE PRICE INCREASES 
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9.  (C)  At the end of the meeting, Fayez noted that he would 
go before Parliament that afternoon and announce price 
increases on certain commodities (septel).  He said that he 
would also have a strong answer to the IAF or other 
oppositionists who challenged Jordan's training of Iraqi 
personnel or Jordan's relations with Israel. 
 
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COMMENT 
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10.  (C)  In discussing Jordan's relations with the Gulf, 
Fayez seemed to be relying on his personal and family 
connection to prominent royal family members, continually 
referring back to his and his father's close personal 
relations with Saudi and Kuwaiti princes (his father was 
married into the al-Saud family).  As we have previously 
mentioned, we believe that dispatch of a team empowered to 
address Jordan's concerns about frozen Iraqi assets and the 
trade ledger would speed resolution of these issues, as well 
as transfer to the DFI of the remaining Iraqi assets frozen 
in Jordan. 
 
11.  (U)  CPA Baghdad minimize considered. 
 
Visit Embassy Amman's classified web site at 
 
http://www.state.sgov.gov/p/nea/amman/ 
 
or access the site through the State Department's SIPRNET 
home page. 
GNEHM