US embassy cable - 05AMMAN1234

C O N F I D E N T I A L SECTION 01 OF 02 AMMAN 001234 
 
SIPDIS 
 
E.O. 12958: DECL: 02/14/2015 
TAGS: PGOV, ECON, EFIN, JO 
SUBJECT: PARLIAMENT APPROVES 2005 BUDGET BY WIDE MARGIN 
AFTER LENGTHY DEBATE 
 
REF: A. AMMAN 187 
 
     B. 04 AMMAN 10173 
 
Classified By: CDA David Hale for Reasons 1.4 (b), (d) 
 
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SUMMARY 
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1.  (C) The Lower House of Parliament approved the 
government's 2005 budget of 3.3 billion Jordanian dinars (JD) 
-- approximately USD 4.7 billion -- on February 12 by a vote 
of 82 to 24.  During the four days of debate preceding the 
vote, 99 out of 110 MPs insisted on presenting individual 
speeches which included a hodgepodge of non-financial 
subjects.  Former Prime Minister Rawabdeh and some of his 
allies sharply criticized the current cabinet and joined MPs 
from the Islamic Action Front (IAF) in opposing the budget. 
The government's victory reflected a strong behind-the-scenes 
campaign to pressure MPs to deliver a favorable outcome.  End 
Summary. 
 
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COMMITTEE ISSUES A QUALIFIED ENDORSEMENT 
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2.  (U)  Prior to open debate by MPs, the government's budget 
for 2005 was examined by the Lower House financial committee. 
 (NOTE:  An economic analysis of the budget will be provided 
septel.  END NOTE.)  The 11-member committee voted 8-3 on 
February 2 to recommend approval of the budget, but issued 30 
accompanying "recommendations" in a 58-page report.  These 
recommendations, focused primarily on means to reduce the 
estimated JD 270 million (roughly USD 381 million) budget 
deficit, included suggested cuts in current and capital 
expenditures, proposed new taxes on dividends and insurance 
companies, and a moratorium on new international loans. 
 
3.  (C) MP and financial committee member Mohammad 
Al-Shawabkeh (East Banker, Madaba) had earlier voted in the 
committee against recommending approval of the budget for 
what he considered a lack of transparency.  Shawabkeh, a U.S. 
citizen who owns a successful tourist-oriented store in New 
Mexico, told poloff that he objected to the budget because it 
did not include all government expenditures and contained 
expensive outlays that no one was able to justify to him. 
Nevertheless, he changed his vote after coming under 
"enormous pressure" from the GOJ.  Shawabkeh said he had 
received calls from several government officials, including 
an agitated Prime Minister Faisal Al-Fayez, who explained how 
it was "in (his) interest and the interest of Jordan" to drop 
his opposition. 
 
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EVERYONE GETS TO SPEAK 
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4.  (U) By tradition and internal by-laws, each of the 110 
MPs in the Lower House was allowed 15 minutes during open 
debate to present his or her comments on the budget, as well 
as to address any other topic.  99 MPs insisted on exercising 
this prerogative, resulting in four full days of nearly 
continuous speeches.  While a majority of remarks related to 
the budget, MPs also used their time on the floor to cover a 
hodgepodge of issues they hoped would resonate with 
constituents bored enough to watch proceedings on Jordan TV, 
including expressions of support for the Palestinian people, 
criticism of inaction on corruption, charges of government 
nepotism, and complaints that ministers and senior officials 
had not been appointed from their districts. 
 
5.  (U) A few common themes emerged from the budget debate. 
Many MPs spoke out against what they considered a dangerously 
high reliance on foreign assistance (foreign grants 
constitute 32 percent of the budget) and a wide gap between 
government revenues and expenditures.  At the same time, 
numerous MPs vocally rejected any increases in commodity 
prices, including fuel oil, or university fees.  Several MPs 
called for closer monitoring of the government's 
Socio-Economic Transformation Plan (SETP), included in the 
budget for the first time, on the grounds that its projects 
were "executed chaotically or on the basis of favoritism." 
 
6.  (U) Some of the most senior and influential members of 
the Lower House were unabashedly critical of the current 
cabinet during the budget debate.  Former Lower House Speaker 
Saad Hayel Srour (East Banker, Northern Badia) painted a 
picture of a disjointed and divided cabinet, claiming that 
there was "more than one team and more than one head in this 
government."  Former minister of justice and former IAF 
member Abdullah Akayleh (East Banker, Tafilah) charged that 
"there is a smaller team within the government led by the 
Minister of Planning setting the government's policies." 
Former Prime Minister Abdur Rauf Rawabdeh, who normally 
refrains from addressing the Lower House during budget or 
government confidence debates, was the last MP to speak.  He 
criticized the cabinet for "trying to run a country the way 
you run a company" and for ignoring constructive advice from 
seasoned politicians.  "It seems that now is not the time for 
those who are considered from the old guard . . . since 
anyone who suggests a different opinion is considered a 
backward force," Rawabdeh stated. 
 
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A GOVERNMENT WIN 
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7.  (U) In responding to MPs before the budget vote, Prime 
Minister Fayez refuted claims that there was a "government 
within a government," insisting that "the ministers work as 
one team."  He also took aim at Rawabdeh's comments by 
stressing the need for injecting "new blood" in the 
government to reflect Jordan's high percentage of young 
people "who should be given the chance to serve their 
country."  Fayez summarized his government's economic 
achievements and reiterated the cabinet's commitment to 
social, political and economic development. 
 
8.  (U)  When the vote finally took place late on February 9, 
the budget was passed by 82 MPs out of 106 present.  Apart 
from the 17 members of the IAF, only seven MPs voted against 
the budget, including Rawabdeh and Srour.  The Lower House 
also approved several of the Financial Committee's 
recommendations, although these are not binding on the 
government (and have been routinely ignored by the GOJ in the 
past).  The budget next moves to the Senate, which given past 
practice is expected to pass it after a generally perfunctory 
examination. 
 
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COMMENT 
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9.  (C) The government's success in garnering a large 
majority to support its budget did not come without 
considerable effort and expense.  According to contacts 
within Parliament and political insiders, the GOJ recognized 
that strained relations with MPs could endanger passage of 
the budget (ref a) and thus waged a vigorous 
behind-the-scenes lobbying campaign that included, as 
necessary, promises of government jobs for friends and 
relatives, new cars, and cold cash.  Several MPs confided to 
emboffs how some of their colleagues had been "paid off," 
although they all denied having received any financial 
incentives themselves.  While this strategy proved successful 
for the GOJ in this instance, it will likely raise 
expectations and demands by MPs the next time the government 
needs to push a high-profile, controversial item through 
Parliament. 
HALE