Jordan to support Iraq war in exchange for "guarantees"

  • From: "Muslim News" <editor_@xxxxxxxxxxxxxxx>
  • To: <submit@xxxxxxxxxxxxxxx>
  • Date: Sun, 27 Oct 2002 09:52:23 -0000

AMMAN (Reuters) - Jordan, a major U.S. ally in the Middle East, has won
a promise from Washington to shore up its fragile economy if war
ruptures Jordan's crucial oil lifeline from Iraq, a key Jordanian
official said on Friday. 

Washington has given the kingdom its strongest commitment yet to
compensate Amman for economic losses if a war against Jordan's powerful
eastern neighbor and main trading partner ends a decade of reliance on
cheap Iraqi energy supplies, the official, who requested anonymity, told
Reuters. 

"Senior U.S. officials have told Jordan don't worry. You won't be left
alone. Your friends in Washington will not idly stand by and watch
economic adversity hit our traditional ally," the official said. 

His account of economic pledges was supported by diplomatic sources also
speaking to Reuters this week. 

The sources said Washington had promised aid in addition to present
assistance of more than $450 million a year, which makes the kingdom the
fourth-largest recipient country of U.S. aid. 

Jordan estimates a war would add a $1 billion burden to its debt-ridden
economy from the loss of cheap, subsidized Iraqi oil, which now saves it
at least $300 million a year that it would otherwise have to pay
non-Iraqi suppliers. 

Jordan's businesses also fear hundreds of millions of dollars in trade
deals with Iraq would be lost. 

DEPENDENCE ON IRAQI OIL 

Jordan's dependence on Iraqi oil developed after Saudi Arabia cut its
supplies to the kingdom in 1990 in retaliation for Amman's opposition to
the U.S.-led coalition that drove Iraqi troops out of Kuwait in 1991. 

A string of senior U.S. officials visiting the region this month have
pledged U.S. support for helping Jordan finance purchases of oil from
outside Iraq, the sources said. 

The latest pledge came this week from U.S. envoy William Burns, an
former ambassador to Jordan, who lobbied hard in Congress and the
administration to push for extra aid and a landmark free-trade accord to
end Jordan's dependence on Iraq. 

"I would stress again our absolute commitment to our relationship with
Jordan and its stability and its economic growth and prospects," Burns
said in Jordan during a regional tour to allay fears among Iraq's
pro-U.S. neighbors about the consequences of war on regional stability. 

The U.S. promises followed months of lobbying by King Abdullah to get
U.S. backing to finance an international fund that would ensure the
kingdom fulfils its crude oil needs from the world market, the sources
said. 

Washington has also supported a contingency plan for a floating
strategic stockpile of oil already sent to Jordan from Iraq to be stored
on a tanker close to the Red Sea port of Aqaba, the sources said. 

This would allow for an extra 30 days' consumption beyond the present
one-month stockpile of oil on mainland Jordan. 

EASING THE PRESSURE 

Washington was also pressing allies Saudi Arabia and Kuwait to help ease
the financial pressure on Jordan in the event of war, officials said. 

Economists said Iraqi crude oil has been virtually subsidizing Jordan's
aid-dependent economy, which is undergoing reforms guided by the
International Monetary Fund. 

Iraqi oil exported to Jordan -- whose projected market value is about
$700 million for 2002 -- is credited with narrowing Jordan's chronic
budget financing gap. 

Without aid to compensate for loss of Iraqi oil, economists and
officials said Jordan's budget deficit would erode the country's healthy
foreign currency reserves of $3.5 billion. 

In contrast with the first 1991 Gulf War, Jordan is now firmly in the
Western camp and has distanced itself from Iraqi President Saddam
Hussein. 

The country, a buffer between Israel to the west and Iraq to the east,
has denied vehemently that it would offer facilities for U.S. troops in
offensive operations against Iraq. 

But diplomats told Reuters Jordan was discussing with U.S. military
planners a role as a base for search-and-rescue teams for possible
military operations in eastern Iraq. 

"Jordan in 1990 is not Jordan 2002. We will not do anything to
jeopardize our excellent relations with the United States," Marwan
al-Muasher, the country's pro-Western foreign minister, said in a recent
foreign press briefing. 

U.S. officials have said Jordan's support of Washington's possible war
goals would position it to become a major beneficiary in a redrawn
regional map after a possible war. 
Source: Reuters 

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