US embassy cable - 04AMMAN3690

C O N F I D E N T I A L SECTION 01 OF 02 AMMAN 003690 
 
SIPDIS 
 
DEPARTMENT FOR THE SECRETARY, NEA 
 
E.O. 12958: DECL: 05/12/2014 
TAGS: PREL, ECON, PTER, ASEC, OVIP, KPAL, JO 
SUBJECT: IRAQ, PEACE PROCESS WILL DOMINATE DEAD SEA WEF 
MEETING 
 
Classified By: Ambassador Edward W. Gnehm for Reasons 1.5 (b), (d) 
 
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SUMMARY 
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1.  (C)  In hosting the second World Economic Forum (WEF) 
meeting at the Dead Sea, King Abdullah hopes to promote 
Jordan as an island of political stability and economic 
opportunity in the region, and portray himself as both a 
peacemaker and deal-maker.  Your participation underscores 
U.S. support for Jordan and the King in achieving that goal 
(and has significantly raised the profile of this WEF).  The 
region you walk into, however, is less optimistic, and 
Jordanians are confused, angry, and -- in a few quarters -- 
somewhat encouraged by U.S. policy in the region.  The 
upcoming Arab League summit in Tunis has renewed the focus on 
regional reform efforts, of which Jordan has played a leading 
role.  The Abu Ghreib revelations, however, have shaken 
Jordanian popular confidence in the moral underpinning of not 
only U.S. policy, but American society, and this has 
consequently hurt our efforts to promote reform in the 
region.  The GOJ continues its strong support to rebuild 
Iraq, but the King still believes a complete transfer of 
sovereignty on June 30 is premature.  The number one topic in 
Jordan remains the Israel-Palestine conflict, with the 
Jordanian mood swinging optimistic or pessimistic in tandem 
with perceived U.S. action (or inaction) and movement on the 
peace process.  The King's recent Washington trip was hailed 
here as a diplomatic victory that protected Jordan's 
interests and helped the Palestinians, but the President's 
subsequent statement to the Arab press that a Palestinian 
state by 2005 is "unrealistic" blunted the positive reaction. 
 As the recently uncovered Zarqawi plot against Jordanian and 
U.S. targets in Amman shows, Jordan is a victim of terrorism 
and will continue its close cooperation with the U.S.  END 
SUMMARY. 
 
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FLASHES OF ANGER -- AND HOPE -- ON THE PEACE PROCESS 
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2.  (C)  The Palestinian-Israeli conflict remains at the top 
of the agenda for most Jordanians, who look to the United 
States to make good on its May 6 "assurances" to King 
Abdullah to protect Jordan's interests in the region.  The 
King's visit was seen here as a diplomatic victory which 
balanced what most here perceive as a U.S. policy tilted 
towards Israel, but Jordanians were disappointed by President 
Bush's remarks to an Egyptian daily that a Palestinian state 
by 2005 is "unrealistic."  The King and other Arab leaders at 
the WEF will press for concrete U.S. steps to improve the 
status quo and rein in Israeli military actions, particularly 
home demolitions, the tight closure of the West Bank and 
Gaza, and targeted killings.  The IDF military operations and 
violence in Gaza this week provide an alarming backdrop to 
the meeting. 
 
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GROWING DISMAY OVER IRAQI SITUATION 
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3.  (C)  The Iraqi prisoner abuse scandal and ongoing 
instability in Iraq continue to dominate Jordanian and Arab 
media.  Outraged by the graphic and offensive nature of the 
Abu Ghreib photographs, the crisis has struck a deeply 
sensitive chord in this conservative and religious society. 
Outside the Jordanian military, most believe the problem is 
systematic and not the work of a "few bad apples," and the 
scandal has contributed to widespread questioning not only of 
U.S. policy in the region, but also of the moral underpinning 
of American society.  Some of our closest partners on our 
reform agenda have said the prisoner abuse scandal has caused 
"irreparable" damage to those efforts and our image. 
Continued violence in Iraq and uncertainty over the political 
transition is of increasing concern as June 30 approaches. 
Put off by perceived heavy handed tactics of the U.S. 
military in Iraq and insensitivity towards Iraqis -- 
exacerbated by the abuse scandal and tensions in Fallujah and 
Najaf -- popular calls for a speedy U.S. departure are 
mounting, as is support for the Iraqi "resistance."  By 
contrast, the King believes that the June 30 transfer date 
may be premature and will caution the U.S. to consider that 
move very carefully. 
 
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REFORM EFFORTS CHUG ALONG 
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4.  (C)  The GOJ has taken a leading role in advocating 
reform in Jordan and in the region.  While insisting that 
reform not be imposed from the outside, the GOJ has been 
receptive to the Greater Middle East Initiative and is 
working within Arab League parameters to advance a reform 
agenda during the Arab League summit in Tunis on May 22.  A 
recurring refrain from Arabs is that a political solution to 
the Palestinian-Israeli conflict must be realized so that 
true reform efforts can succeed.  While political and social 
reform efforts in Jordan move forward, the Abu Ghreib scandal 
has seriously hurt our ability to sell social and political 
reform in the region -- particularly on human and women's 
rights.  However, there have been a few public voices who 
point to the U.S. military and congressional investigations 
into Abu Ghreib as a positive aspect of the American 
democratic system worthy of emulation (implicitly noting the 
lack of such a system of accountability in the region).  A 
complete investigation and punishment of offenders could over 
time help rectify the damage done to America's image. 
 
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JORDAN'S ECONOMY -- GOING STRONG; U.S. TOP TRADE PARTNER 
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5.  (C) Jordan's economy continues to strengthen.  After 
growing by 3.3% in 2003, that rate is expected to accelerate 
in 2004 with some analysts predicting it may reach 5%.  Trade 
continues to boom, with Jordan's exports up 29% in the first 
quarter of 2004 over the same quarter the previous year.  The 
U.S. is Jordan's top trading partner and the two-way trade in 
2003 exceeded $1 billion.  Thanks to economic reforms enacted 
by the King, Jordanian exports to the U.S. under the FTA are 
growing at a faster rate than those under the Qualified 
Industrial Zones, which manufacture products with both 
Israeli and Jordanian content.  Jordan has also signed an 
Association Agreement with the European Union and a regional 
trade association with Tunisia, Morocco and Egypt known as 
the Agadir Agreement.  On the fiscal side, Jordan's total 
public debt stands at 92.4% of the estimated GDP for 2004, 
down from a high of 111.3% in 1999.  Jordan will be 
graduating from its IMF program in July.  Finally, Jordan 
continues to be helpful in recovering frozen Iraqi assets, 
returning over $235 million to the Development Fund for Iraq 
and promising to transfer more funds shortly. 
 
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