US embassy cable - 05AMMAN4368

C O N F I D E N T I A L SECTION 01 OF 02 AMMAN 004368 
 
SIPDIS 
 
E.O. 12958: DECL: 06/02/2010 
TAGS: PGOV, PREL, ECON, EFIN, JO 
SUBJECT: IS THE GOVERNMENT TURNING THE CORNER IN GAINING 
PARLIAMENT'S CONFIDENCE 
 
REF: A. AMMAN 3649 
 
     B. AMMAN 3551 
     C. AMMAN 3252 
     D. AMMAN 2969 
 
Classified By: Charge David Hale, Reasons 1.4 (B) & (D) 
 
1.  (C) Jordan's eight-week old reform-oriented cabinet 
continues to encounter stiff resistance from members of 
parliament (now in recess) and their allies in the press. 
This opposition stems from fear of genuine reforms, 
antagonism toward the leading reformist personalities, 
hostility toward the "western" orientation of the 
government team, and the failure to consult parliament in 
the choice of ministers (refs A-D).  The new prime 
minister, Adnan Badran, who only learned he would head the 
government two days before its formation, was initially 
caught off balance by the attacks, and made matters worse 
by advertising his own reservations about such leading 
reform ministers - and polarizing figures -- as Finance's 
Bassem Awadallah. 
 
2.  (C) The palace and cabinet team, with the aid of the 
security apparatus, is finally getting its act together to 
counter the opposition.  Planning Minister Suhair al-Ali 
confided to Charge that the prime minister seemed to change 
his mind on a strategy for gaining a confidence vote every 
day.  A key issue is timing:  whether and when to call an 
extraordinary session and face a vote, or delay a regular 
session as long as possible constitutionally, until 
November - at a high price of appearing cowardly and 
slowing attention to critical reform legislation.  Another 
question is whether to accede to the MPs' demands, 
principally to sack the Finance Minister and stuff more 
southerners into the cabinet.  The King has solved Badran's 
uncertainty for him, indicating to Charge he favored a 
summer extraordinary session, but would leave the timing to 
Badran.  The King is also insistent on retaining Awadallah 
(whom Badran described to a visiting staffdel as a "genius" 
but whose manner and style with parliament made him a major 
liability).  Badran told Charge on June 2 that he would 
call parliament into session in mid- to late summer, after 
he has had a chance to complete his tour of the provinces. 
He has taken the most prominent reformist ministers on a 
traveling road show, to southern Tafileh (the heart of the 
MP rebellion) and Ajloun and Jerash in the north.  He 
claimed to Charge, as has al-Ali, that these visits have 
been received favorably locally, and are working to crack 
parliament's opposition. 
 
3.  (C) Perhaps more persuasive has been the intervention 
of the General Intelligence Directorate (GID), which helped 
fuel initial antagonism in parliament under its former 
head, Saad Khayr.  Its current de facto head, Muhammad 
Dhahabi, has worked closely with the King to develop an 
argument on the inevitable need for these MPs - 
many of whom were put into parliament through the design of 
Khayr - to accept reforms and the King's cabinet.  He told 
Charge recently that he has met with most of the 49 
declared foes, and believes he is making headway.  A number 
of ministers themselves sensed a turning point with 
Badran's May 25 Independence Day address, in 
which he for the first time presented himself and his 
agenda to the nation on live television, and came across as 
a commanding figure with a human touch. 
 
4.  (C) While palace, GID, and cabinet all sense a 
lessening of political resistance, we can see no such sign 
in our contacts in parliament.  Abd al-Raouf Rawabdeh, who 
commands a substantial bloc in parliament and is so far 
staying silent and neutral about a cabinet that does not 
impress him, told Charge June 1 that Badran did not have 
the needed votes.  His advice to the King has been to go 
slow on a confidence motion, delaying until August or 
September when emotions will have cooled.  Self-servingly, 
he identifies the cabinet's biggest problem as the absence 
of any politicians, who he claimed can be both committed 
reformers and skilled parliamentarians (although the 
examples he cited of "reform" made it clear that Rawabdeh 
would need a long time in rehab before he fit the bill). 
While East Bank traditionalists have criticized Badran's 
cabinet as "too Palestinian," even some West Banker MPs are 
inclined to withhold their confidence in the government. 
Three of them told poloff May 30 that while they recognized 
that ministers such as Awadallah and al-Ali were "bright and 
dynamic," they were "too detached" from, and did not truly 
represent the majority of Jordanian-Palestinians.  These 
MPs were also afraid that economic reforms pursued by the 
cabinet could burden their mostly poor constituents with 
higher fuel prices and taxes. 
 
5.  (C) Hanging over this entire process is a looming 
fiscal crisis, little known outside the cabinet and palace 
but one which, if unresolved, could itself cause the 
collapse of the government.  Despite strong economic 
performance (over 7% growth this year), Jordan's public 
finances are in a disastrous state. The Finance Minister 
in confidence has suspended all payments except salaries. 
Without relief from Saudi Arabia and other Gulf friends to 
meet its oil bill, Jordan's budget deficit will soar to 
over $600 million, twice what was stated in the budget 
presentation last December.  This is due to the difference 
in the expenditures of oil at $45 per barrel for the 
remainder of the year.  The deficit would represent 5.2% of 
GDP, the largest it has been since before King Abdullah's 
accession.  Higher prices will even further increase the 
deficit.  The obvious answer is to end the fuel subsidies 
that so encumber the budget, but to do so now could prompt 
protests and eliminate the chance of winning parliament's 
confidence.  The government is committed to that course, 
but over a three year time span.  Meanwhile, Awadallah is 
accelerating privatization plans (the remainder of Jordan 
Telecom being first on the auction block, with France 
Telecom enjoying first right of refusal).  He is also 
desperate to 
secure additional Gulf oil aid, a cash transfer of U.S. 
supplemental assistance, and debt relief.  Without these 
steps, he and the King fear that Jordan's fiscal dilemma, 
and its impact on the government's ability to cushion lower 
income groups, will impede seriously an ambitious reform 
agenda which populist politicians would then find even 
easier to attack. 
 
HALE