US embassy cable - 04AMMAN3494

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Identifier:	04AMMAN3494
Wikileaks:	View 04AMMAN3494 at Wikileaks.org
Origin:	Embassy Amman
Created:	2004-05-09 12:55:00
Classification:	UNCLASSIFIED
Tags:	EFIN JO
Redacted:	This cable was not redacted by Wikileaks.

UNCLAS AMMAN 003494 
 
SIPDIS 
 
STATE FOR U/S LARSON 
 
E.O. 12958: N/A 
TAGS: EFIN, JO 
SUBJECT: JORDAN'S DEBT SWAP PLANS 
 
REF: SCHEDLBAUER E-MAIL 4/09/04 
 
During his April 8, 2004 meeting with U/S Larson, Jordan's 
Finance Minister Mohammad Abu Hammour promised to deliver a 
letter describing Jordan's experience with debt swaps and its 
future plans.  Abu Hammour passed the paper to DCM on May 6. 
Abu Hammour said he planned to pursue this idea during Paris 
Club meetings in 
June. 
 
Begin Text of letter: 
 
Debt Swap 
 
1.  The Debt/GDP (Debt to Gross Domestic Product) ratio 
increased by 11 percentage points during 2002 and 2003 due to 
the appreciation of the exchange rate of the Euro. 
 
2.  In December 2003 we had a buy-back operation concerning 
Jordan's stock of Brady Bonds.  We also concluded debt swap 
agreements with Britain and Germany.  These agreements led to 
a reduction in the debt/GDP ratio by 6 percentage points. 
 
3.  According to the Paris Club Agreed Minute of July 2002, 
creditor countries have the option of debt swap amounting to 
30% of the total debt or up to 40 million Euro whichever is 
higher. 
 
4.  We have reached the maximum ceiling for the volume of 
debt swap (Paris Club) with some countries and we need to go 
to Paris Club to raise the 30% limit in order to reduce the 
Debt/GDP ratio and the debt service. 
 
End text of letter. 
GNEHM