US embassy cable - 05AMMAN8005

UNCLAS SECTION 01 OF 02 AMMAN 008005 
 
SIPDIS 
 
SENSITIVE 
 
PASS TO USTR 
STATE FOR NEA FRONT OFFICE, NEA/ELA, NEA/RA 
STATE ALSO FOR EB, OES 
 
E.O. 12958: N/A 
TAGS: ETRD, EIND, KIPR, PREL, EAID, JO 
SUBJECT: TRADE MINISTER ZU'BI ENGAGES DAS DIBBLE ON S&T 
COOPERATION 
 
 
SENSITIVE BUT UNCLASSIFIED.  FOR USG USE ONLY.  NOT FOR 
DISSEMINATION ON THE INTERNET. 
 
1.  (SBU) SUMMARY: The U.S.-Jordan Free Trade Agreement is a 
platform upon which to increase higher value-added production 
and attract investment in advanced laboratories, research 
institutions, and manufacturing, Jordan's Minister of 
Industry and Trade Sharif Zu'bi told visiting NEA Deputy 
Assistant Secretary Dibble late last month.  Jordan should 
not become the sweatshop of the region, but instead needs to 
add to its successful industrial base in the garment sector. 
Minister Zu'bi's vision is of a high-tech industrial park in 
Jordan providing tens of thousands of jobs held by educated 
Jordanians within a decade.  Leaders from the Royal 
Scientific Society (RSS) and the Higher Council for Science 
and Technology shared with DAS Dibble their views on Jordan's 
current work in such fields as biotechnology and advanced 
materials, and inquired about more avenues for cooperation 
and assistance.  DAS Dibble emphasized focusing on 
private-sector solutions and improving Jordan's investment 
climate through greater attention to protecting IPR and 
lowering trade barriers.  END SUMMARY. 
 
Jordan Shouldn't Be a Sweatshop Economy 
--------------------------------------- 
 
2.  (SBU) Minister of Industry and Trade Sharif Zu'bi 
welcomed the continued interest in Jordan's economic 
development shown by DAS Dibble's visit, and explained his 
long-term vision for trade development.  While Jordanian 
exports to the United States are expected to exceed $1.5 
billion in 2005 (an estimated 15-20% increase over 2004), 
Zu'bi worried that Jordan cannot sustain continued growth in 
the textile and garment trade upon which this success had 
been based.  In the longer term, Jordan has to focus on 
producing higher-value-added goods, and this depends on 
technology.  Jordan does not wish to become the sweatshop for 
the world.  Hence, the GoJ is considering shifting gears in 
its economic relations, according to Zu'bi, who emphasized 
his gratification with the job and wealth creation - 
especially for women - provided by the U.S.-Jordan Free Trade 
Agreement and Qualifying Industrial Zone (QIZ) trade 
initiatives.  Highlighting his strong belief that Jordan had 
the knowledge base and talent to produce high-tech goods, he 
said that Jordan needs to find niche markets.  Jordan needs 
assistance to attract direct foreign investment, build a 
high-tech manufacturing base, and assist advanced 
laboratories and research institutions, according to Zu'bi. 
 
Frontier Technologies...But No Breakthroughs 
-------------------------------------------- 
 
3.  (SBU) Secretary General of Jordan's Higher Council for 
Science and Technology Khaled Elshuraydeh briefed DAS Dibble 
on the GoJ's science policy, outlining initiatives such as 
the National Center for Technology and Business Incubation 
which has focused on an ICT (information and communications 
technology) incubator project since 2003.  Jordanian 
scientists are currently concentrating on a handful of key 
frontier technologies, including information and 
communications technology, biotechnology, advanced materials 
and nanotechnology, and energy research, including 
photovoltaics. 
 
4.  (SBU) Royal Scientific Society (RSS) President Sa'ad 
Hijazi explained that while Jordan has good human resources 
and academic contacts in the wider research community, 
Jordan's S&T efforts to date have not resulted in 
breakthrough advances.  The incubators and other research 
labs do not have a research system in place that would lead 
to "something tangible", he noted, referring to applied 
technologies with potential as marketable products.  Hijazi 
requested assistance in the field of science administration. 
 
Hi-Tech Park 
------------ 
 
5. (SBU) Minister Zu'bi said it was high time for Jordan to 
take S&T seriously.  He estimated that the QIZs would produce 
$5 billion in revenue by 2010 at which time he would like to 
have a Technology Park QIZ operational with 30-40 small and 
medium sized enterprises (SMEs), each with gross revenues in 
the $100,000-$1 million range.  By 2015, Jordan could have 
more than 150 hi-tech SMEs employing tens of thousands of 
employees.  Jordan has top people, but they now work in the 
Gulf states, according to Zu'bi; this project would bring 
them home. 
 
Improve Investment Climate; Seek Private Partners 
--------------------------------------------- ---- 
 
6.  (SBU) DAS Dibble noted that Jordan's relatively favorable 
investment climate would help attract the investors in high 
technology ventures that the GoJ was seeking, but added that 
several areas needed improvement.  Jordan has to demonstrate 
strong compliance with intellectual property rights (IPR) 
protections.  Programs that are perceived as barriers to 
trade - such as DAMAN - need to be eliminated.  Zu'bi took on 
board these points, relating that Jordan still has work to do 
to enhance its IPR system, and that the Investment Law also 
needed "tweaking."  He expressed the hope that USAID could 
provide technical comments on this law. 
 
7.  (SBU) DAS Dibble said that with the proper investment 
climate, Jordan could attract investment from the U.S., 
including from R&D leaders such as Dow Chemicals or Monsanto. 
 She also noted that individual states in the U.S. had 
public-private partnerships that might be explored to 
identify U.S. partners.  The Charge raised other possible 
partners for Jordan in its high-technology endeavors, 
including academic exchanges with leading U.S.-based research 
institutions and the multi-disciplinary Colorado State 
Partnership Program that the embassy's Military Assistance 
Program had initiated with the Colorado National Guard. 
Young scientists identified through the USAID-sponsored 
Junior Achievement program might also be a source of 
up-and-coming talent.  The Charge added that the Embassy 
EST&H officer would follow up to assess USG and academic 
entities' interest and resources in S&T-related cooperation. 
 
8.  (SBU) COMMENT: Minister Zu'bi clearly wants to use the 
U.S.-Jordan FTA as a platform upon which to make new advances 
in industrial development and trade, and appears to 
understand the need to improve the investment climate and IPR 
enforcement.  It is  not clear, however, that the current S&T 
organizational infrastructure in Jordan will support the type 
of immediate advances Zu'bi hopes for.  Although it is true 
that Jordan produces some fine scientists, the institutional 
barriers to effective S&T development and commercialization 
are high.  Individual components of a healthy S&T sector are 
present, but a new generation of S&T leadership - and an 
enabling legal and regulatory environment to support it - are 
likely needed to make the vision of a hi-tech Jordanian 
economy a reality. 
 
9.  (U) DAS Dibble did not have the opportunity to clear this 
message. 
HALE