US embassy cable - 02AMMAN3044

C O N F I D E N T I A L SECTION 01 OF 02 AMMAN 003044 
 
SIPDIS 
 
E.O. 12958: DECL: 06/10/2012 
TAGS: ECON, ETTC, ETRD, IZ, JO 
SUBJECT: JORDAN'S ECONOMIC OLD GUARD FLEXES MUSCLES 
 
REF: A. AMMAN 1721 
     B. AMMAN 2334 
 
Classified By: Ambassador Edward W. Gnehm, reasons 1.5 (b,d) 
 
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SUMMARY 
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1.  (c)  Anti-normalization, pro-Iraq, and anti-reform 
elements in Jordan's business community are trying to 
re-establish themselves in the kingdom's economic 
decision-making arena.  These recidivist groups have been 
encouraged by an increase in anti-American, and hence 
anti-globalization, feeling since Israeli incursions into 
Palestinian areas stepped up earlier this year.  While their 
strengthened influence is probably temporary, it could 
complicate the GOJ's progress on promoting economic openness 
in the short term.  End summary. 
 
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POWER PLAY IN AMMAN CHAMBER OF INDUSTRY 
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2.  (c)  The Amman Chamber of Industry (ACI) announced in 
late April that 10 of the 12 members of its board of 
directors had resigned.  Officially, this followed an 
expression of no confidence by the majority of board members 
in ACI Chairman Othman Bdeir's ability to manage the 
chamber's interests.  Unofficially, the move is believed to 
be a power play by influential businessmen who sell their 
products to Iraq under the bilateral oil and trade protocols 
(led by former ACI chairman Khaldoun Abu Hassan) to regain 
control of the ACI and re-energize and re-orient its 
political activities.  The two remaining board members are 
also pro-Iraq, and have ties to Abu Hassan and to PM Abul 
Ragheb and former Trade Minister Wasef Azar (all of whom are 
seen as supporters of the Iraq trade).  We have also heard 
from government contacts that one of the reasons for the 
resignations was a belief by some members that the ACI was 
not doing enough to advocate for a boycott of US products. 
It is unclear at this point if the interim board appointed by 
Trade Minister Bashir and that includes a number of 
forward-thinking businessmen will be able to solidify its 
position and remain in place, or if Abu Hassan will succeed 
in re-taking control of the ACI. 
 
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NEW CHAMBERS LAW WORRIES PRO-QIZ GROUPS 
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3.  (c)  Meanwhile, Irbid Chamber of Industry (ICI) chairman 
Maher al Nasser told us recently that a law reforming the 
operations of Jordan's three local chambers of industry is 
currently under consideration in the cabinet.  Nasser worried 
that the law is a bid by the ACI to merge the chambers into a 
single chamber under its control.  Nasser called this 
potentially disastrous, as the ACI is dominated by 
Palestinian Jordanians who, he said, want to politicize the 
chambers.  He said ACI members want other chambers to support 
a boycott of U.S. products, support "anti-normalization" 
efforts (i.e. oppose doing business with Israel), and give 
assistance to the Palestinian cause.  An East-Banker and 
chairman of a chamber that has many QIZ exporters as members 
(and hence does extensive business with Israel), Nasser said 
the impact of such a law on the ability of the chambers in 
Irbid and Zarqa to pursue liberal trade practices could be 
severe. 
 
4.  (c)  In a separate conversation, Trade Ministry Secretary 
General Samer Tawil told Econ chief that the proposed law 
would not subsume the other chambers under the ACI, but would 
instead establish an additional body, a national federation 
of chambers of industry, as an umbrella group.  The local 
chambers would retain their separate identities.  He said a 
federation would function similarly to the existing 
federation of chambers of commerce (note: this body is a 
highly politicized, but largely ineffective and essentially 
marginal grouping of equally ineffective local chambers of 
commerce.  End note.).  Tawil said the current system, which 
dates from 1949, was in dire need of reform to help Jordanian 
companies upgrade their standards and market themselves to be 
able to take advantage of opportunities under the FTA and 
other new trade programs - rather than continue to rely on 
the Iraqi market.  He was, however, worried that a new law 
would require new chamber elections that in the current 
political environment could put anti-normalizers and pro-Iraq 
elements in control.  Thus, he said he would advocate 
delaying chamber elections if the new law is enacted. 
 
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COMMENT 
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5.  (c)  The dramatic worsening of the situation in the West 
Bank over the past two months created an opening for 
old-guard elements of the business community to re-insert 
their agendas into the economic policy debate in the kingdom. 
 They hope to take advantage of an increase in popular 
displeasure with the GOJ's relationships with Israel and the 
U.S. to push a politicized economic agenda focused on 
monopolizing government contracts, trade with Iraq, and 
anti-normalization.  Such efforts by economic reactionaries 
are reflective of ongoing tensions between different segments 
of Jordan's business community -- between old guard, 
subsidy-dependent industrialists and new economy businessmen, 
and between "pure" private sector business interests and 
those who wish to tie economic decisions to political stands 
on Iraq and Palestine. 
 
6.  (c)  Although distracted by the regional political 
situation in recent months (ref a), the GOJ commitment to 
reform highlighted in the King's recent visit to Washington 
means the momentum for economic liberalization will continue. 
 Indeed, senior GOJ officials tell us they are finalizing a 
number of new economic reform bills, for which they expect to 
secure cabinet approval before the end of June (septel).  In 
the short run, though, the momentum of reform will be slowed 
to the extent that the old guard is able to capitalize on 
political developments to advance their self-interested 
agenda. 
Gnehm