US embassy cable - 02AMMAN5915

C O N F I D E N T I A L AMMAN 005915 
 
SIPDIS 
 
E.O. 12958: DECL: 10/09/2012 
TAGS: PREL, EAID, PGOV, US, JO 
SUBJECT: PM ABUL RAGHEB TELLS DAS CHENEY GOJ TO CONTINUE 
ECONOMIC, CIVIL SERVICE REFORM EFFORTS 
 
 
Classified By: Amb. Edward W. Gnehm for reasons 1.5 (B) and (D) 
 
1.  (SBU)  NEA DAS Elizabeth Cheney discussed the USAID 
program and economic reform October 8 with Prime Minister Ali 
Abul Ragheb and Planning Minister Bassam Awadallah 
(discussion of honor killings reported in septel). 
Ambassador Gnehm, USAID Director Christiansen-Wagner and 
PolCouns Silliman accompanied.  DAS Cheney praised Jordan's 
economic reform program and noted that Jordan has the 
potential to be "a model of reform and development for the 
region."  She previewed the Middle East Partnership 
Initiative (MEPI) which Secretary Powell will roll out in a 
speech on November 6.  MEPI will "demonstrate U.S. commitment 
and dedication" to key areas of development in the Middle 
East, including economic development, education, political 
reform, rule of law, and development of civil society.  All 
of these areas, she noted, were highlighted in the recently 
released UN Arab Human Development Report.  She explained 
that this initiative will encompass all of the U.S.'s 
existing assistance programs in the Arab world which total 
over USD 1 billion annually.  In addition, the USG will 
dedicate USD 20 million for pilot projects in FY02 and 
anticipates additional funding in following years. 
 
2.  (SBU)  Abul Ragheb expressed Jordan's great appreciation 
for continued USG support, especially through the USAID 
program.  He noted that the GOJ is now focusing its social 
development activities in areas that the poorest Jordanians 
can feel most:  education, health, vocational training, 
water, and youth programs.  "We need the people to feel what 
is going on."  He described GOJ relations with the IMF and 
World Bank as excellent, and thanked the U.S. for its efforts 
earlier in the year to secure a new Paris Club agreement for 
Jordan. 
 
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PRIVATIZATION, ITC UPDATE 
------------------------- 
 
3.  (C)  Abul Ragheb said that the privatization process is 
going well.  Jordan TeleCom will conduct its first IPO in the 
coming week, selling an additional 15 percent of its shares 
(France TeleCom currently owns 40 percent and Jordanian 
pension systems an additional 10 percent, he noted.) 
Planning Minister Awadallah commented that he hoped the GOJ 
would be "completely outside of JTC" and not dependent on its 
revenues by 2004 "so the Finance Ministry won't defend JTC's 
monopoly so much."  He said Jordan hopes to find a way to 
fund a USD 53 million project to install the hardware to 
provide a broadband link among all Jordanian schools.  This 
would enhance both Jordanian education and market access. 
The GOJ also has plans to turn school IT facilities into 
after-hours community IT centers. 
 
4.  (C)  Abul Ragheb said that, in the process of 
privatization, it is important that the GOJ "deal fairly" 
with those employees who might lose their jobs.  Jordan needs 
more and better programs to retrain workers for jobs in the 
private sector.  This will be especially important, he said, 
when the overstaffed phosphates company is privatized. 
 
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PENSION REFORM 
-------------- 
 
5.  (C)  Responding to a question on civil service and 
pension reform, Abul Ragheb said the GOJ's ultimate goal is 
to reduce the number of public sector employees.  Jordan has 
been working with international donors and the IMF on civil 
service and pension reform, and has succeeded in getting all 
newly-hired government employees into the centralized system. 
 The problem remains the "different style of pension" systems 
for the military and security services.  Eventually, the GOJ 
wants to move these systems under the umbrella of the central 
pension system, but there are important political factors to 
take into account.  In the short term, however, the GOJ is 
examining ways to reduce military pension expenditures, for 
example by raising the minimum service time to qualify for a 
pension from 16 years to 18 or 20, and by increasing GOJ 
programs to help retired military to find private sector 
jobs.  On e-government, Abul Ragheb said the GOJ is in the 
process of amending civil service bylaws to increase the 
service orientation of government employees.  Awadallah noted 
that Jordan had just received a USD 120 million loan from the 
IMF as the second phase in a public sector reform program. 
 
6.  (U)  DAS Cheney has cleared this message. 
GNEHM