Order Code IB93085
CRS Issue Brief for Congress
Received through the CRS Web
Jordan: U.S. Relations
and Bilateral Issues
Updated June 2, 2003
Alfred B. Prados
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress

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CONTENTS
SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
U.S.-Jordanian Relations and the Gulf Crisis
Jordanian Issues of U.S. Interest
Stability of the Regime and Succession
Experiments in Democratic Reform
Reaction to Terrorist Attacks of September 11, 2001
Murder of a U.S. Diplomat
Jordan’s Role in the Peace Negotiations
Peace Agreements and Normalization
Further Arab-Israeli Negotiations
The West Bank and East Jerusalem
Hamas and Rejectionist Groups
Jordan’s Position Regarding Iraq
Course of Jordanian-Iraqi Relations
Commercial Ties
Alternate Sources of Oil
U.S. Aid Issues
Aid, Funding Levels, and Trade
Previous and Recent Aid
FY2001 Assistance
FY2002 Assistance
FY2003 Assistance
FY2004 Assistance
Wye River Funds
Free Trade Agreement
Debt Relief
Armed Forces Modernization
Military Equipment
Further Requests
Military Cooperation
Alternatives and Implications

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Jordan: U.S. Relations and Bilateral Issues
SUMMARY
The death of King Hussein on February
$225 million in annual U.S. assistance. The
7, 1999, removed a strong U.S. ally and force
Administration proposed doubling U.S. assis-
for stability; however, his son and successor,
tance to Jordan in FY2003, in view of Jorda-
King Abdullah, has continued to follow the
nian support to the anti-terrorism campaign.
late King’s moderate and pro-western policies.
These increased amounts of aid for Jordan
In recent years, Jordan has taken significant
were contained in S. 2779, the Foreign Opera-
steps toward building democratic life, includ-
tions Appropriations bill for FY2003, reported
ing a return to limited parliamentary democ-
by the Senate Appropriations Committee on
racy. Parliament has eased restrictions in laws
July 24, 2002 (S.Rept. 107-219). A compan-
affecting the press, but some remain.
ion bill reported by the House Appropriations
Committee (H.R. 5410) did not contain spe-
Several issues in U.S.-Jordanian relations
cific amounts, but the Committee recom-
are likely to figure in decisions by Congress
mended the amounts requested by the Admin-
and the Administration on future aid to and
istration in report language (H.Rept. 107-663).
cooperation with Jordan. These include the
stability of the Jordanian regime, democratic
The 107th Congress adjourned without
reform under way in Jordan, the role of Jordan
floor action on either bill; however, on Febru-
in the Arab-Israeli peace process, Jordan’s
ary 13, 2003, both houses agreed to the con-
concerns over the U.S.-led campaign against
ference report on a new bill, H.J.Res. 2, the
Iraq in 2003, and its relations with other
Consolidated Appropriations Resolution,
regional states. King Abdullah expressed
2003, which became P.L. 108-7 on February
Jordan’s “absolute condemnation” of the
20. The bill contained $250 million for Jor-
September 11, 2001 terrorist attacks on the
dan in economic assistance but did not contain
U.S. and was the first Arab head of state to
a specific earmark for Jordan in military
visit President Bush after the attacks. Jordan
assistance. Also, the Emergency Wartime
sent military medical and mine clearing units
Supplemental Appropriations Act, 2003 (H.R.
to Afghanistan In December 2001 to support
1559/P.L. 108-11) provides $700 million in
the U.S.-led campaign against terrorism.
additional economic and $406 million in
military assistance to Jordan in FY2003; the
Economic and military aid levels are
House and Senate agreed to the conference
important factors in the bilateral relationship.
report on H.R. 1559 on April 12. It was
At the President’s request, Congress appropri-
signed into law (P.L. 108-11) on April 16,
ated a total of $401 million in three separate
2003.
appropriation bills, enacted between 1994 and
1996, to forgive Jordan’s $702.3 million debt
Several alternative scenarios could de-
to the United States. On October 24, 2000,
velop in Jordan: a continuation of the current
the two countries signed a free trade agree-
course toward democracy under the present
ment. On September 28, 2001, President
regime; a return to a more autocratic political
Bush signed a bill to implement the agreement
system; or fundamental changes in the charac-
(H.R. 2603) as P.L. 107-43.
ter or configuration of the Jordanian state.
Steady democratic growth under the present
In each of the five fiscal years 1998
regime would probably offer the best pros-
through 2002, Jordan received approximately
pects of supporting U.S. interests.
Congressional Research Service ˜ The Library of Congress

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MOST RECENT DEVELOPMENTS
On March 25, 2003, President Bush sent Congress a request for supplemental funding
including, among other things, $700 million in economic aid and $406 million in military
assistance for Jordan to help offset the effects of the war with Iraq on Jordan’s economy and
bolster its security. Versions of the Emergency Wartime Supplemental Appropriations Act,
2003 (H.R. 1559) passed by the House on April 3 and Senate on April 7, respectively,
contained the requested amounts for Jordan, as did the conference report (H.Rept. 108-76),
which was passed by voice vote in the House and unanimous consent in the Senate on April
12, 2003. In addition, Section 1310 of the bill provided that up to $1,400 million may be
transferred under the heading Iraqi Freedom Fund to Pakistan, Jordan, and other key
cooperating states to reimburse them for certain logistical expenses and military support.
The bill was signed into law (P.L. 108-11) on April 16, 2003.

In other developments, as of May 27, 2003, 810 candidates including 55 women plan
to contest 104 seats in the lower house of parliament in elections scheduled to be held on
June 17, after a two-year delay.
Jordan will host a summit conference to be attended by President Bush, Israeli Prime
Minister Ariel Sharon, and Palestinian Prime Minister Mahmoud Abbas on June 4, 2003,
where attendees will discuss further steps to solve the Arab-Israeli conflict..
BACKGROUND AND ANALYSIS
U.S.-Jordanian Relations and the Gulf Crisis
Although the United States and Jordan have never been linked by a formal treaty, they
have cooperated on a number of regional and international issues over the years. Several
factors have contributed toward U.S. interest in Jordan. First, throughout much of its history,
Jordan has been a pro-Western, modernizing country that has adopted moderate policies on
most regional issues. Second, the country’s stable political leadership and talented
population have given Jordan considerable importance in the Middle East political scene.
Third, Jordan has made significant contributions to regional stability and economic
development in the Persian Gulf area; during the 1970s and 1980s, Jordan provided the
small, oil-rich but newly independent Gulf states with military advisors, instructors,
engineers, skilled workers, and technical specialists. Fourth, because of its large Palestinian
population, its former role on the West Bank, and its extended border with Israel and the
occupied territories, Jordan is pivotal in the search for a solution to the Arab-Israeli conflict.
U.S. support has helped Jordan deal with serious vulnerabilities, both internal and
external. Jordan’s small size and lack of major economic resources have made it dependent
on aid from Western and friendly Arab sources. Jordan’s geographic position, wedged
between Israel, Syria, Iraq, and Saudi Arabia, has made it vulnerable to the strategic designs
of its more powerful neighbors, but has also given Jordan an important role as a buffer
between these potential adversaries. In 1990, Jordan’s unwillingness to join the allied
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coalition against Iraq disrupted its relations with the United States and the Persian Gulf
states; however, relations improved after Jordan joined the Arab-Israeli peace process in late
1991 and, somewhat later, began to distance itself from Iraq.
Jordanian Issues of U.S. Interest
Stability of the Regime and Succession
Throughout his 46-year reign, the
Jordan in Brief
late King Hussein was the dominant
figure in the Jordanian political scene
Population (July 2002): 5,307,470
and enjoyed a high degree of
growth rate 2.89%
legitimacy as head of a prestigious
Area: 89,213 sq km (34,445 sq mi, slightly smaller
dynasty, the loyalty of the armed
than Indiana)
Ethnic Groups: Arabs 98%
forces, and widespread respect as a
Circassians 1%
strong and energetic leader with
Armenians 1%
extensive experience in governing his
Religion: Sunni Muslim 92%; Christian 6%; small
country. On January 25, 1999, shortly
Muslim sects 2%
before his death from cancer on
Literacy (1995): 87% (male 93%, female 79%)
February 7, King Hussein designated
GDP (2001): $8.7 billion; real growth 3.5-4.0%
his eldest son Abdullah as Crown
Inflation (2001): 1.4%
Unemployment (2001): 16% (official estimate); 25%-
Prince and heir apparent. Upon
3-%, according to some unofficial estimates
succeeding to the throne on February 7,
Armed Forces (2002): personnel 100,240;
1999, King Abdullah appointed his
tanks 1,101; combat aircraft 101
younger half brother, Prince Hamzah,
Trade Balance (2001): -$2.6 billion
as the new Crown Prince and heir
External Debt (2001): $6.7 billion
apparent, in accordance with their late
father’s wishes.
Sources: U.S. Dept. of State; Central Bank of Jordan;
other U.S. and Jordanian government departments.
The King, known as Abdullah II,
attended secondary school in the
United States and has studied at Oxford
University and Georgetown University. He also attended British military schools and has
served in the Jordanian Army since 1984, most recently as Commander of the Special
Operations Command. King Abdullah’s wife, Queen Rania, comes from a prominent
Palestinian family, a fact that may garner additional support from the Palestinian community.
As a military officer who apparently did not expect to succeed to the throne, King Abdullah
was not heavily involved in politics, economics, or foreign affairs, but had many contacts
with military counterparts in Gulf states and other friendly countries, including the United
States. Despite the gap left by the death of King Hussein, most observers agree that King
Abdullah has been successful in consolidating his rule and has won respect for his hands-on
style of governing. (For more background information, see CRS Report 98-703, Jordan:
Succession Issues, by Alfred B. Prados.)
King Abdullah has been keenly interested in boosting Jordan’s economy, which has
been burdened by slow economic growth, declining per capita income, and high levels of
unemployment (see box). The government has recently instituted reform measures, including
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reduced customs fees, laws protecting intellectual property, and removal of barriers to
foreign investment, and on April 11, 2000, Jordan became the 136th member of the World
Trade Organization (WTO). On April 15, 2002, Jordan’s Foreign Minister said the
government would impose “minimal” price increases on such staples as bread, barley, bran,
fodder, and diesel, fuel oil, and kerosene in an effort to qualify for an International Monetary
Fund (IMF) program designed to reduce Jordan’s chronic budget deficits. A 2% general
sales tax was imposed on 87 items, mainly food products, on June 1, thus completing IMF-
directed reforms aimed at increasing domestic revenue. Addressing a forum on October 3,
2002, King Abdullah pointed to significant economic achievements during the past three
years, commenting that the country had seen 4.2% growth in 2001 and 4.9% during the
second quarter of 2002, after experiencing negative growth three years ago. On October 13,
the Jordanian Minister of Trade predicted annual growth would reach 5.1% by the end of
2002, noting that exports had increased during 2002 by 17%.
Experiments in Democratic Reform
Jordan is a constitutional monarchy with a bicameral legislature composed of an elected
80-member lower house and a 40-member appointed upper house. Starting in 1989, the late
King supported a return to limited parliamentary democracy while periodically moving to
curtail dissent when it threatened economic reforms or normalization of relations with Israel.
Jordan held relatively free elections to the lower house of parliament in 1989 and 1993. In
both elections the fundamentalist Islamic Action Front (IAF), which opposed the government
on various issues, emerged as the largest single party, but the King was able to muster
majorities for his domestic and foreign policies. Elections held in November 1997, however,
were boycotted by the IAF and eight smaller nationalist parties, who complained that recent
government decrees had stifled dissent and marginalized the role of parliament.

King Abdullah has taken further measures to open the political system within certain
limits. Despite their boycott of the 1997 parliamentary elections, members of the IAF
decided to participate in municipal elections held in July 1999 to choose 2,530 councillors
for 304 municipalities. Although pro-government candidates won a majority of the seats, the
IAF registered gains, particularly in several larger cities including the capital city of Amman.
In mid-1999, the government proposed amendments to an unpopular press law that had
banned 14 topics including criticism of the royal family or coverage of the armed forces. On
September 6, 1999, Parliament went further and deleted the entire Article 37, which
contained the restrictions. Journalists, however, can still be punished for various violations
under other provisions of the penal code. Moreover on October 9, 2001, with parliament in
recess, the government promulgated an amendment to the press law stipulating closure of
publications that carry “false or libelous information that can undermine national unity or the
country’s reputation.” It also bans articles that incite crimes, strikes, or threats to public
order.
On June 16, 2001, King Abdullah dissolved parliament and approved a new electoral
law on July 23. The new law lowers the voting age from 19 to 18, expands membership in
the lower house of parliament from 80 to 104, and creates new safeguards against ballot
fraud. The law retains a voting system that favors tribal East Bank constituencies over the
largely Palestinian populated cities. In a speech on August 15, 2002, King Abdullah said that
difficult regional circumstances had necessitated further postponements of elections but
added that he expects they will take place in the spring of 2003. On February 27, 2003, the
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Prime Minister announced that elections will be held on June 17, 2003. According to a
statement to the press on May 13 by Jordanian Minister of the Interior Qaftan Majali, 810
candidates including 55 women plan to run in the elections. Also, the Islamic Action Front
has rescinded its 1997 boycott of the elections, thereby broadening the electorate.
Reaction to Terrorist Attacks of September 11, 2001
King Abdullah was the first Arab head of state to visit President Bush after the attacks,
and at a joint press conference on September 28, he reiterated Jordan’s “full, unequivocal
support” for the United States. Since then, Jordan has taken several steps to support the U.S.
campaign against terrorism. In December, Jordan sent approximately 200 military medical
personnel to Afghanistan to set up a 50-bed field hospital in the northern city of Mazar-i-
Sharif. According to a U.S. Defense Department fact sheet, as of June 6, 2002, the hospital
had seen 68,811 patients, almost all of them civilian, and performed 798 surgeries. A
Jordanian Army mine-clearing unit, also deployed to Afghanistan during December, helped
clear 70,000 square meters of territory including a key air base of anti-tank and anti-
personnel mines. Also, the Defense Department fact sheet noted that Jordan has provided
basing and overflight permission for U.S. and coalition forces taking part in operations in
Afghanistan.
Over a year before the September attacks, in April 2000, Jordan had charged 28 persons
(13 in absentia) allegedly linked to the exiled Saudi extremist Osama bin Laden with
involvement in a plot to carry out terrorist acts in Jordan. Six of these were sentenced to
death by a military court on September 18, 2000; 16 received varying prison terms (including
two life terms); and six were acquitted. In later developments, a Time magazine article of
November 18, 2001 reported that Jordan thwarted at least two attacks planned by agents
linked to bin Laden earlier in the year. On June 3, 2002, the Christian Science Monitor
reported that Jordanian authorities had recently arrested 11 suspected terrorists who were
allegedly planning attacks on the U.S. and Israeli embassies in Jordan, along with other
Israeli targets on the West Bank. The detainees are said to have ties to Osama bin Laden’s
Al Qaeda organization.
In November 2002, Jordanian police and military units moved to suppress rioting in the
south-central town of Maan following government attempts to arrest a militant Islamic
preacher who had earlier staged a rally in support of Osama bin Laden. Government sources
attributed the unrest in Maan to drugs and smuggling, but some other observers attributed
it to perceived neglect by the government of poor economic conditions in the Maan area,
notably high unemployment.
Murder of a U.S. Diplomat. On October 28, 2002, Lawrence Foley, a U.S. diplomat
assigned to the U.S. Agency for International Development (USAID) program in Jordan, was
shot and killed by an unknown assailant as Foley was leaving for work, marking the first
lethal attack on a U.S. official in Jordan in more than 30 years. On December 14, the
Jordanian Minister of Information announced that two persons who had been apprehended
by Jordanian authorities as suspects in the Foley case had confessed to membership in Al
Qaeda. According to Jordanian authorities, the two had received instructions from an Al
Qaeda official outside Jordan to target foreign diplomats and Jordanian security services
personnel. According to subsequent press reports on May 12, 2003, a Jordanian military
prosecutor charged 11 men with “plotting to carry out terrorist activities leading to the death
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of an individual” [presumably referring to Mr. Foley]. The charge did not specifically
mention Al Qaeda.
Jordan’s Role in the Peace Negotiations
Peace Agreements and Normalization. Jordan and Israel signed a peace treaty
on October 26, 2003. Subsequently, the two countries exchanged ambassadors; Israel
returned approximately 131 square miles of territory near the Rift Valley to Jordan; the
Jordanian parliament repealed laws banning contacts with Israel; and the two countries
signed a number of bilateral agreements between 1994 and 1996 to normalize economic and
cultural links. Water sharing, a recurring problem, was partially resolved in May 1997 when
the two countries reached an interim arrangement under which Israel began pumping 72,000
cubic meters of water to Jordan per day (equivalent to 26.3 million cubic meters per year–a
little over half the target amount envisioned in an annex to the peace treaty).
An important vehicle for commercial cooperation has been the establishment of
“Qualifying Industrial Zones” (QIZs), under which goods produced with specified levels of
Jordanian and Israeli input can enter the United States duty free, under the provisions of P.L.
104-234. (This act amended previous legislation so as to grant the President authority to
extend the U.S.-Israel free trade area to cover products from QIZs between Israel and Jordan
or between Israel and Egypt.) Since 1998, the United States has designated ten industrial
parks in Jordan as QIZs. As of October 2002, according to a Jordanian official, nine QIZs
are currently operating in Jordan, employing more than 25,000 workers, mostly in the textile
industry.
King Abdullah’s efforts to normalize relations with Israel have faced significant
resistance within Jordan, particularly among Islamic fundamentalist groups, parts of the
Palestinian community, and influential trade and professional organizations representing
some 80,000-100,000 engineers, doctors, lawyers, journalists, and writers. Among many
mainstream Jordanians, there is some disappointment that peace with Israel has not brought
more tangible economic benefits to them so far. Opponents of normalization have repeatedly
called on Jordanians to boycott contacts with Israel, and activists among them have compiled
two “black lists” of Jordanian individuals and companies that deal with Israel. In January
2001, Prime Minister Ali Abu Raghab warned that such lists harm Jordan’s investor-friendly
image. Police subsequently arrested seven union leaders on charges of belonging to an illegal
organization (apparently, a 24-member umbrella committee which had been in the forefront
of the black list campaign). A Jordanian appellate court ruled on November 28, 2002, there
is no legal foundation for the creation of anti-normalization committees by trade unions.
Further Arab-Israeli Negotiations. Jordan, like Egypt, has resisted pressures from
some Arab states to sever relations with Israel since the outbreak of Israeli-Palestinian
clashes in September 2000, but the Jordanian government has deferred sending a new
ambassador to Israel, because of what Jordan regards as an excessive Israeli response to the
Palestinian uprising. On May 24, 2001, Jordan’s official news agency announced that King
Abdullah and visiting Palestinian leader Yasir Arafat supported the recommendations of a
fact-finding team led by former U.S. Senator George Mitchell aimed at halting Israeli-
Palestinian strife. At an Arab summit conference on March 27-28, 2002, Jordan backed a
peace initiative by the Crown Prince of Saudi Arabia calling, among other things, for Israeli
withdrawal from territories occupied since 1967, a “just solution to the Palestinian refugees,”
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and establishment of normal relations between Arab states and Israel. According to the
press, the Jordanian Prime Minister told attendees at the conference that this initiative
“constitutes a corner-stone of a comprehensive peace in the region.”
Since the resumption of violence between Palestinians and Israelis in September 2000,
Jordan has pushed the United States to take a more active role in the peace process. In a
press release by the Jordanian Embassy in Washington, Jordan welcomed President Bush’s
speech of June 24, 2002, outlining a forthcoming plan, or “Road Map,” to help jumpstart the
peace process. The Road Map, released by the so-called Quartet (the United States, the
European Union, Russia, and the United Nations) on April 30, 2003, includes a role for
Jordan as part of an oversight board to assist in Palestinian-Israeli security cooperation and
reconstruction activities on the West Bank and Gaza. In an interview with CNN
correspondent Christiane Amanpour on April 27, 2003, King Abdullah described Israeli-
Palestinian strife as “the core issue” in the Middle East but said he thinks President Bush is
“committed to take whatever [action] is needed to solve these problems.” King Abdullah
subsequently agreed to host a summit conference to be attended by President Bush, Israeli
Prime Minister Ariel Sharon, and Palestinian Prime Minister Mahmoud Abbas at the
Jordanian port of Aqaba on June 4, 2003, where attendees will discuss further steps to
implement the Road Map.
The West Bank and East Jerusalem. The Jordanian-Israeli peace treaty does not
address the status of the West Bank territory, which was annexed by Jordan in 1950 but
occupied by Israel in 1967, nor does it address the status of East Jerusalem (except as noted
below); both issues are subjects of Israeli-Palestinian rather than Israeli-Jordanian
negotiations. Although King Hussein severed Jordanian ties with the West Bank in 1988,
Jordan remains involved in Palestinian issues for several reasons: Jordan’s large Palestinian
population, its continuing involvement in supporting some West Bank institutions, the
preference on the part of some Israeli leaders for a Jordanian role in a future Palestinian
settlement, and Jordan’s continued role in protecting and maintaining the Islamic holy places
in East Jerusalem. Also, the Jordanian government provides humanitarian, educational, and
social services to Palestinian refugees residing in refugee camps in Jordan, estimated by a
Jordanian official at $400 million in 2001.
Palestinian leaders have taken exception to Article 9 of the 1994 Israeli-Jordanian
treaty, which states that Israel “respects the historical role of the Hashemite Kingdom [of
Jordan] in the mosques of Jerusalem” and “will give high priority to the Jordanian historic
role in these shrines.” Palestinian leader Arafat has asserted that “sovereignty over Jerusalem
and supervision of Jerusalem is for Palestinians.” In a speech to a Washington, DC audience
on May 13, 2002, King Abdullah said that under a peace deal that he envisions, “[t]he
Jerusalem question would be answered, by providing for a shared open city to all faiths.”
Hamas and Rejectionist Groups. According to the U.S. State Department’s most
recent annual report on patterns of global terrorism (April 2001), the Jordanian government
has remained vigilant in opposing terrorism. On August 30, 1999, Jordanian security forces
closed offices used by the fundamentalist Palestinian organization Hamas, which the late
King Hussein had tolerated to some degree, on the grounds that the offices were registered
as businesses but were conducting illegal political activity. In November 1999, authorities
announced that the Hamas offices would be closed permanently. On October 9, 2001, after
the terrorist attacks on the United States, the Jordanian government issued an amendment to
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terrorism laws banning any banking operations “linked to terrorism activities”, along with
banning border infiltration and attacks on industry, shipping, telecommunications, and
computer systems. On April 24, 2002, news articles reported that Jordan had arrested five
members of an illegal Islamic fundamentalist organization known as Tahrir (Liberation),
which has demanded that Jordan send troops to support Palestinians in the West Bank.
Jordan’s Position Regarding Iraq
Course of Jordanian-Iraqi Relations. As U.S.-Iraqi tensions mounted in mid-
2002, Jordan tried to balance its close U.S. ties with its reluctance on political and economic
grounds to support a military campaign against Iraq. Palestinians, who form a majority of
Jordan’s population, and other Jordanians with tribal ties to Iraq largely opposed military
action against Iraq; moreover, Jordanian officials reportedly estimated that a war with Iraq
would create an additional burden of $1 billion on Jordan’s economy. During the months that
preceded the U.S.-led military campaign against Iraq (Operation Iraqi Freedom), Jordanian
officials maintained publicly that Jordan would not become a “launching pad” for military
action against Iraq1 and that there were no U.S. troops in Jordan. On February 24, 2003,
however, Jordanian Prime Minister Ali Abu Raghab and U.S. defense officials
acknowledged that several hundred U.S. troops were in Jordan to operate newly delivered
Patriot anti-missile systems and coordinate search and rescue operations. (“U.S. Troops
Deployed in Jordan,” Boston Globe, February 25, 2003.) A Washington Post article of April
1, 2003, two weeks after the military campaign began, estimated that 3,000 U.S. troops were
in Jordan. As operations were underway in Iraq, Jordanian authorities reportedly prevented
two Iraqi terrorist plots targeting Americans in the country. On March 23, 2003, the
Jordanian government expelled five Iraqi diplomats believed to be involved in the terrorist
plots.
After the war began, Jordan took several steps to meet the humanitarian needs of the
Iraqi people. A 55-bed field hospital dispatched by the Jordanian Armed Forces to Iraq in late
April had treated 5,500 patients, mostly Iraqis, by May 1. The Jordanian port of Aqaba is
serving as a transit point for shipments of wheat and flour to Iraq. As military action
receded, Jordanian leaders voiced concerns over the future of Iraq. In an interview on April
22, King Abdullah expressed the view that the Iraqi public would be more comfortable with
a regime led by fellow Iraqis who had remained in Iraq during the hardships of the last two
decades rather than with a regime headed by former Iraqi exiles. On April 27, Jordanian
Foreign Minister Marwan Muasher strongly criticized a leading Iraqi exile, Ahmad Chalabi,
who is believed by some to enjoy U.S. backing as a potential candidate to head a
reconstituted Iraqi government. Muasher noted that Chalabi is wanted in Jordan for
embezzling $70 million in the 1980s. (Chalabi, who was convicted in absentia in Jordan in
1992, says that he was framed by agents of Saddam Hussein.)
1 In an interview with Reuters on March 6, 2003, Jordanian Foreign Minister Marwan Muasher said
“[w]e’ve made it clear Jordan is not going to participate in a war and will not be a launching pad for
war against Iraq.” In an interview with the official Jordan News Agency published on April 3, King
Abdullah stated that “[w]e are not part of this war.”
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Commercial Ties. Prior to Operation Iraqi Freedom, Jordan continued to import oil
from Iraq at discounted prices, pointing out to the U.N. Sanctions Committee that it has had
no other source of affordable oil since the cessation of Saudi oil shipments in 1990. Sources
quote somewhat varying figures, ranging from 70,000 to 80,000 bpd of crude oil and
additional amounts of oil products (fuel oil, gas oil, lubrication oil), with maximum estimates
of 96,000 bpd of crude oil and oil products combined. Actual payments were reportedly
made in commodities rather than cash, through shipments of humanitarian goods from
Jordan to Iraq, in accordance with annual trade accords signed between the two countries.
Under the trade accord for 2002, for example, Jordan was to export an estimated $260
million worth of commodities to Iraq. A news wire report of August 30, 2002, provided
higher figures, indicating that Jordan was receiving an oil grant of $300 million and another
$350 million worth of oil in barter arrangements. According to preliminary Jordanian
government figures covering the first 11 months of 2002, Iraq and the United States ranked
first and second, respectively, among Jordan’s leading trading partners.
On late March 25, 2003, then Iraqi Vice President Taha Yasin Ramadan accused
Jordanian authorities of suspending Iraqi oil shipments to Jordan, and other Iraqi officials
said Jordan had prevented the entry of commodities into Iraq. Jordanian Trade Minister
Salah Bashir denied that Jordan had impeded entry of commodities into Iraq but said that the
on-going military campaign in Iraq necessitated halting the movement of oil trucks from Iraq
to Jordan for reasons of safety. With the collapse of the Iraqi government in early April,
future trade arrangements between the two countries are unclear. In the meantime, Jordanian
transportation officials said on April 15 that 11,000 trucks are available in Jordan to haul
humanitarian supplies to Iraq; according to press sources, the trucks can carry up to 500,000
tons monthly, which is approximately the amount of food and medicine scheduled to be sent
to Iraq per month.
Since 1991, annual U.S. foreign assistance appropriations acts have contained
restrictions on U.S. assistance to any country not in compliance with U.N. Security Council
sanctions against Iraq. According to the State Department, the U.N. Sanctions Committee
has “taken note of” Jordan’s imports of Iraqi oil and its lack of economically viable
alternatives. The U.S. Administration issued annual waivers of the above restrictions on U.S.
assistance to Jordan on grounds of national interest but continued to encourage Jordan to
seek alternative energy sources. (See below.)
Alternate Sources of Oil. According to news reports on March 6, 2003, an
unidentified Arab official said Saudi Arabia, Kuwait, and the United Arab Emirates had
agreed to provide Jordan with a total of 120,000 barrels of oil per day to replace shipments
of Iraqi oil. A subsequent news report in April indicated that Saudi Arabia and Kuwait had
agreed to provide Jordan with 50,000 and 25,000 barrels of oil per day, respectively. On
April 13, Jordanian Energy Minister Muhammad Batayneh announced that a Saudi tanker
delivered a shipment of 100,000 tons of crude oil to Jordan. Sources did not indicate
whether these shipments are being provided at market prices, which would be significantly
more costly than the discounted prices previously offered by Iraq.
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U.S. Aid Issues
Aid, Funding Levels, and Trade
Previous and Recent Aid. The United States has provided economic and military
aid, respectively to Jordan since 1951 and 1957. Total U.S. aid to Jordan through 1997 is
approximately $3.9 billion, including $2.1 billion in economic aid and $1.8 billion in military
aid. Levels of aid have fluctuated, increasing in response to threats faced by Jordan and
decreasing during periods of political differences or worldwide curbs on aid funding. The
United States has markedly increased its aid to Jordan since the mid-1990s to help Jordan
strengthen its economy, maintain domestic stability, and pursue normalization with Israel.
Between FY1998 and FY2002, annual U.S. economic and military aid levels to Jordan were
approximately $150 million and $75 million, respectively. Further increases in U.S. aid to
Jordan began in FY2003, in view of Jordan’s support for the post-9/11 campaign against
terrorism. More detailed discussion follows. Table 2 shows U.S. levels of U.S. assistance
to Jordan since 1990.
FY2001 Assistance. The President included the following amounts for Jordan in his
FY2001 budget request: $150 million in economic support funds (ESF), $75 million in
foreign military financing (FMF), and $1.7 million in international military education and
training (IMET). The same ESF and FMF amounts for Jordan were included in S. 2522, the
Foreign Operations Appropriation bill for FY2001, which was reported by the Senate
Committee on Appropriations on May 9, 2000. The Senate passed a companion bill, H.R.
4811, on July 18 by unanimous consent, after substituting the text of S. 2522. Meanwhile,
on July 13, the House passed another version of H.R. 4811, which did not contain earmarks
for Jordan, by 239-185 (Roll No. 400); however, in accompanying report language (H.Rept.
106-720, July 10, 2000), the Committee on Appropriations recommended the same amounts
contained in the Senate bill for Jordan. The conference report (H.Rept. 106-997, October 25,
2000), which contained the Senate earmarks for Jordan, was passed by both houses on
October 25 and signed into law by the President as P.L. 106-429 on November 6, 2000.
On November 14, 2000, President Clinton submitted a request to Congress for
supplemental aid to address emergency needs for several Middle Eastern countries. For
Jordan, he requested $50 million in ESF to help compensate for lost tourism and higher oil
prices and $25 million in FMF to promote border security and military modernization. These
funds apparently are in addition to amounts specified in P.L. 106-429, above. The 106th
Congress did not act on this supplemental request.
FY2002 Assistance. The Bush Administration requested $150 million in ESF and
$75 million in FMF, as well as $1.8 million in IMET for Jordan in FY2002. The House
version of the Foreign Operations Appropriations bill for FY2002, H.R. 2506, did not
contain specific allocations for Jordan; however, in report language (H.Rept. 107-142, July
17, 2001) the House Appropriations Committee expressed “its continued strong support for
Jordan’s constructive and critical role in the region” and recommended the same levels of
ESF and FMF contained in the President’s budget request. The House passed H.R. 2506 on
July 24, 2001, by 381 to 46 (Roll no. 266). The Senate version, passed on October 24, 2001,
by 96 to 2 (Record Vote No. 312), did contain the amounts requested by the President for
Jordan. The conference report (H.Rept. 107-345, December 19, 2001) included the amounts
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contained in the Senate version ($150 million in ESF and $75 million in FMF). The House
agreed to the conference report by 357-66 (Roll no. 505) on December 19 and the Senate
agreed to the report by unanimous consent on December 20. President Bush signed the bill
as P.L. 106-115 on January 10, 2002.
As part of its campaign against terrorism in the aftermath of the September 11 attacks,
the Bush Administration requested supplemental funding in FY2002 for a number of
countries that are playing a role in supporting the U.S. effort. Under supplemental funds
proposed by the Administration, Jordan would receive an additional $125 million in U.S.
assistance, consisting of $100 million in budget support and $25 million to finance
equipment for border security and special operations forces. Respective versions of a
supplemental bill (H.R. 4775) passed by the House on May 24 and the Senate on June 7 did
not specifically earmark these funds for Jordan; however, both bills provided a $420 million
fund for payments to Jordan, Pakistan, and other cooperating nations for logistical support
provided to U.S. military operations in connection with the war on terrorism. The conference
report changed this figure to $390 million (H.Rept. 107-593, July 19, 2002.) The President
signed H.R. 4775 as P.L. 107-206 on August 2, 2002. According to the Jordanian press, the
last installment of the $100 million in FY2002 supplemental budgetary support was released
to Jordan on November 7, 2002.
FY2003 Assistance. The Bush Administration sought to double U.S. aid to Jordan
in FY2003, in view of Jordanian support to the campaign against terrorism. The
Administration’s budget request contained a total of $448 million for Jordan in FY2003,
including $250 million in economic assistance and $198 million in military assistance. A
spokesman for the Office of Management and Budget was quoted as saying the increased aid
would be used to improve border controls and interdiction of illegal weapons flow, to
support financial training, trade, and investment, and to strengthen educational opportunities.
These amounts were contained in S. 2779, the Foreign Operations Appropriations bill for
FY2003, reported by the Senate Appropriations Committee on July 24, 2002 (S.Rept. 107-
219). In the report, the Committee “notes with appreciation Jordan’s constructive role in the
peace process and efforts to implement economic reforms.” A bill reported by the House
Appropriations Committee on September 19, 2002, H.R. 5410, did not contain specific
amounts; however, in report language (H.Rept. 107-663), the Committee recommended the
same levels of aid as those contained in the President’s budget request. The Committee also
“expressed its continued strong support for and appreciation of Jordan’s constructive and
critical role in the region.” The 107th Congress adjourned without floor action on either bill.
On February 12, 2003, both houses agreed to the conference report on a new bill, H.J.Res.
2, the Consolidated Appropriations Resolution, 2003, which President Bush signed as P.L.
108-7 on February 20. The conference report (H.Rept. 108-10) contained $250 million in
ESF for Jordan in FY2003. The conference report did not contain a specific earmark in FMF
for Jordan in FY2003 but noted that the $198 million contained in the Senate version of the
bill had already been obligated by the Administration for Jordan.
On March 25, 2003, the President sent Congress a request for supplemental funding
including, among other things, $700 million in economic aid and $406 million in military
assistance for Jordan to help offset the effects of the war with Iraq on Jordan’s economy and
bolster its security. Versions of the Emergency Wartime Supplemental Appropriations Act,
2003, H.R. 1559) passed by the House on April 3 and Senate on April 7, respectively,
contained the requested amounts for Jordan, as did the conference report (H.Rept. 108-76),
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which was passed by voice vote in the House and unanimous consent in the Senate on April
12, 2003. In addition, Section 1310 of the bill provided that up to $1,400 million may be
transferred under the heading Iraqi Freedom Fund to Pakistan, Jordan, and other key
cooperating states to reimburse them for certain logistical expenses and military support.
The bill was signed into law (P.L. 108-11) on April 16.
FY2004 Assistance. In its budget request for FY2004, the Administration has
requested $250 million in ESF and $206 million in FMF for Jordan.
Wye River Funds. In addition to these annual aid funds, at the request of the Clinton
Administration, Jordan received $300 million as part of a special package to support the Wye
River agreement, a U.S.-sponsored Israeli-Palestinian agreement that the late King Hussein
had helped negotiate in 1998. Of the $300 million in Wye River funds provided to Jordan,
$100 million ($50 million in ESF and $50 million in FMF) were included in a supplementary
appropriations bill for FY1999 (P.L. 106-31, May 21, 1999). The remaining $200 million
($50 million in ESF and $150 million in FMF) were included in H.R. 3422, the Foreign
Operations Appropriations bill for FY2000, which was passed by reference in the
Consolidated Appropriations Act for FY2000 (P.L. 106-113, November 29, 1999). (See
Table 2.)
Free Trade Agreement. On October 24, 2000, President Clinton and King Abdullah
witnessed the signing of a U.S.-Jordanian Free Trade Agreement, which will eliminate duties
and commercial barriers to bilateral trade in goods and services originating in the two
countries. Earlier, in a report released on September 26, the U.S. International Trade
Commission concluded that a U.S.-Jordan Free Trade Agreement would have no measurable
impact on total U.S. imports or exports, U.S. production, or U.S. employment. Under the
agreement, the two countries agreed to enforce existing laws concerning worker rights and
environmental protection. On January 6, 2001, then President Clinton transmitted to the
107th Congress a proposal to implement the Free Trade Agreement. On July 23, U.S. Trade
Representative Zoellick and Jordanian Ambassador Marwan Muashir exchanged letters
pledging that the two sides would “make every effort” to resolve disputes without recourse
to sanctions and other formal procedures. These letters were designed to allay concerns on
the part of some Republican Members over the possible use of sanctions to enforce labor and
environmental provisions of the treaty.
Meanwhile, similar bills were introduced in both houses of Congress to implement the
U.S.-Jordanian FTA: S. 643 (Baucus, introduced on March 28, 2001), H.R. 1484 (Levin,
introduced on April 4, 2001), and H.R. 2603 (Thomas, introduced on July 24, 2001). On
July 26, the Senate Finance Committee and the House Ways and Means Committee approved
S. 643 and H.R. 2603, respectively, by voice votes. On July 31, the House passed H.R. 2603
by voice vote, and the Senate passed the bill by voice vote on September 24. President Bush
signed the bill as P.L. 107-43 on September 28, during King Abdullah’s visit to Washington.
For additional information, see CRS Report RL30652, U.S.-Jordan Free Trade Agreement.
Debt Relief
In 1994, in recognition of Jordan’s support for Middle East peacemaking, President
Clinton asked Congress to pass the necessary legislation to forgive Jordan’s $702.3 million
debt to the United States (approximately 10% of Jordan’s worldwide debt). Congress has
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appropriated a total of $401 million in subsidies, which under pertinent budgetary procedures
are sufficient to forgive the entire $702.3 million owed to the United States. The $401
million in subsidies were contained in three appropriations bills beginning in 1994, as shown
in Table 1 below. Not covered under the previous debt forgiveness package are certain loan
guarantees, Commodity Credit Corporation loans, and other special categories estimated at
$389 million at the end of 1998. (The Central Bank of Jordan carries a slightly higher figure
of $396.1 million as of 2001.) (The Consolidated Appropriations Resolution, 2003, P.L.
108-7, makes $15 million available from FY2002 supplemental funds to restructure certain
loans and guarantees for Jordan.) In seeking U.S. debt forgiveness, Jordanian officials hoped
to obtain a three-fold benefit: to foster popular support for peace with Israel by creating a
climate favorable for foreign investment with accompanying economic benefits; to
demonstrate the credibility of U.S. commitments to domestic and regional opponents of the
peace process; and to encourage Jordan’s other international creditors to follow suit in
providing debt relief.
Table 1. U.S. Debt Forgiveness for Jordan
($ in millions)
Fiscal Year
Amount of
Approximate
Act
Funds
Subsidy
Amount Forgiven
P.L. 103-306
1994
99
220
P.L. 104-19
1995
275
419
P.L. 104-208
1997-1998
27*
63
*Subsidy split as follows: $15 million in FY1997 funds, $12 million in FY1998 funds.
Though willing to ease payment terms, Jordan’s creditors (other than the United States)
have been largely unwilling to forgive debts, and Jordan’s total indebtedness changed little
between 2000 ($6.76 billion) and 2001 ($6.69 billion). (These figures do not include certain
types of bonds and undisbursed loans.) Among major creditors, Jordan owes $1.56 billion
to Japan, $1.0 billion to the World Bank, and $2.01 billion to three major European
countries: Germany, France, and Britain. Jordan did succeed in easing repayment pressures
by rescheduling $400 million of its debt to Paris Club creditors in 1997 and another $800
million in 1999; and on April 4, 2000, Jordan signed a $123 million aid agreement with the
European Union, of which about two thirds was to be used to alleviate poverty in Jordan’s
burgeoning cities and shanty towns. A subsequent Paris Club agreement in July 2002
rescheduled $1.2 billion out of $3.8 billion owed by Jordan to the 11 members of the Paris
Club, thereby relieving Jordan of an annual $250 million in debt-servicing payments to
international creditors until 2007.
Armed Forces Modernization
Military Equipment. The United States is also helping Jordan modernize its armed
forces, which have been the traditional mainstay of the regime. The Jordanian military
forces, though well trained and disciplined, are outnumbered and outgunned by each of
Jordan’s neighboring forces. In 1996, under Section 572, P.L. 104-107 (the FY1996 Foreign
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Operations Appropriations Act), Congress approved a drawdown of $100 million, mainly in
ground force equipment from U.S. stocks (including 50 M60A3 tanks), to enhance Jordan’s
ability to maintain border security and implement terms of the peace treaty with Israel. Most
of this equipment was delivered in December 1996. In addition, during 1996, the United
States agreed to lease 16 refurbished F-16 fighter aircraft to Jordan at a cost of approximately
$220 million (most of which represents the cost of upgrading the aircraft), with title passing
to Jordan after five years. Deliveries of the aircraft were completed in early 1998. The
aircraft transfer was funded through a combination of foreign military financing (FMF)
allocations to Jordan over a four-year period ($150 million), plus $70 million in additional
FMF funds contained in the FY1996 omnibus continuing appropriations bill (P.L. 104-134).
(For more information, see CRS Report 96-309, Jordan: U.S. Military Assistance and
Cooperation. Out of print, but available upon request from author, Alfred Prados.)
Further Requests. In his request for supplemental funding for Jordan and other
Middle East countries in FY2001, President Clinton noted that the military assistance portion
of the package would be used to upgrade armored personnel carriers, air defense radar, and
other systems in Jordanian Armed Forces inventories. Jordanian Armed Forces leaders are
hoping ultimately continue modernizing their tank fleet and to obtain three or four more
squadrons of F-16 fighters (70-80 planes), enabling them to replace older model French
Mirage F-1 and U.S. F-5 fighters. Under a March 1999 agreement, Jordan received 288
Challenger-1 tanks (which mount a 120-mm gun) from Britain. It was announced on
October 24, 2002, that Britain has offered Jordan an additional 100 Challenger-1 tanks. In
April 2002, the U.S. Defense Department said it was proposing to sell a $22 million long-
range radar system (AN/FPS-117) to Jordan to provide it with an enhanced early warning
capability. With regard to the three Patriot anti-missile batteries delivered to Jordan by the
United States in early 2003, Jordan’s Prime Minister stated on February 25 that Jordan
requested these weapons from the United States after Russia was unable to deliver S-300
surface-to-air missiles originally requested by Jordan in a timely manner.
Military Cooperation. A U.S.-Jordanian Joint Military Commission has functioned
since 1974. Combined training exercises by U.S. and Jordanian military units continue to
take place in Jordan, at least on an annual basis and sometimes more often. These have
included fairly large scale training activities involving special forces, air defense,
communications, fighter aircraft, and other military units, together with an annual month-
long exercise with U.S. Navy and Marine units called “Infinite Moonlight,” held most
recently between August 12 and September 5, 2002. U.S. and Jordanian officials reportedly
stated that the exercise was not connected to any U.S. plans for future military operations
against Iraq. Similarly, in a statement published in a London-based Arabic newspaper on
October 20, 2002, a Jordanian official denied that a multilateral exercise in southern Jordan
involving troops from the United States, Jordan, Oman, and Kuwait was linked to any
possible military operations in Iraq. In early 2002, at U.S. request, Jordan reportedly began
a training program to help Yemeni forces in countering terrorism. Subsequently, after
Operation Iraqi Freedom, an article carried in the June 2, 2003, issue of Defense News
reported that the United States has asked Jordan to help train the nucleus of a new Iraqi
Army.
Under the provisions of Section 517 of the Foreign Assistance Act of 1961 as amended,
President Clinton designated Jordan as a major non-NATO ally of the United States,
effective on November 13, 1996. According to a State Department spokesman, this status
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“makes Jordan eligible for priority consideration for transfer of excess defense articles, the
use of already appropriated military assistance funds for procurement through commercial
leases, the stockpiling of U.S. military material, and the purchase of depleted uranium
munitions.”
Alternatives and Implications
In the aftermath of the Gulf war and the peace treaty with Israel, several alternative
scenarios could develop in Jordan. The first would be continued movement toward
democracy under the present regime. There is much evidence that the late King favored this
course, and some speculate that his U.S. and British trained successor will do likewise. The
political experience since the parliamentary elections of 1989 and 1993 has been generally
positive, although the 1997 elections were marred by a boycott by much of the opposition.
During his reign, King Hussein succeeded in opening the political system to a wide spectrum
of Jordanian opinion while restraining extreme steps by the religious right or the nationalist
left. Externally, Jordan has survived major diplomatic isolation and economic loss brought
on by the Gulf crisis, and conditions have improved on both fronts. The process of
normalizing relations with Israel and fluctuating relations with Iraq will continue to confront
the King with sensitive decisions, in seeking to accommodate opposition groups within the
Jordanian political system.
Under a second scenario, Jordan might return to a more restrictive political system. In
addition to his commitment to fostering democracy, the late King was long dedicated to
preserving the basic integrity and institutional character of the state that his grandfather built.
On at least two occasions — when threatened by a radical nationalist coup d’etat in 1957 and
by a potential takeover of the country by armed Palestinian guerrillas in 1970 — the late
King, backed by the armed forces, moved decisively to reestablish order at the expense of
democratic experiments previously under way. It is arguable that the country’s institutions
today are stronger, more durable, and more able to absorb political pressures than they were
in 1957 or 1970 and that the current situation is far less threatening. On the other hand, the
combination of domestic economic hardships, an uncertain peace process opposed by many
Jordanians, and a strong and aggressive Islamist movement could create new challenges that
the new King might feel compelled to preempt through returning to a more autocratic system
of government.
A third scenario would involve a fundamental change in the character of the Jordanian
state. This could come about in a number of ways: emergence of a strongly Islamist
government that would exclude other groups from participation in national political life; a
close alliance with a neighboring patron (Iraq or Syria) that would exert control over
Jordanian policies; disappearance of the monarchy; or replacement of the present Jordanian
state with a Palestinian entity. These developments, though not likely in the short term,
could become more plausible if the country’s governmental, economic, and military
institutions should suffer serious erosion. Radical changes in the character or configuration
of Jordan would be of concern to U.S. policy makers. Almost any successor to the Jordanian
state as it is now constituted would present the United States and its allies with a less stable
and more threatening regional environment.
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Table 2. Annual U.S. Aid to Jordan since the Gulf Crisis
($ in millions)
Economic Assistance
Military Assistance
Fiscal Year
(FY)
EconSpt
Food
Devel
PeaceCp
FMF*
IMET**
Totals
1991
35.0a
0
0
0
20.0a
1.3
56.30
1992
30.0b
20.0
0
0
20.0b
.6
70.60
1993c
5.0
30.0
0
0
9.0
.5
44.50
1994d
9.0
15.0
4.0
0
9.0
.8
37.80
1995
7.2
15.0
6.7
0
7.3
1.0
37.20
1996
7.2
21.0
7.9
0
200.0e
1.2
237.30
1997f
112.2
2.6
4.5
1.1
30.0
1.7
152.10
1998f
150.0
0
0
1.2
75.0g
1.6
227.80
1999
150.0
0
0
1.4
70.0g
1.6
223.00
1999 (Wye)
50.0
0
0
0
50.0
0
100.00
2000
150.0
0
0
1.7
75.0
1.6
228.30
2000 (Wye)
50.0
0
0
0
150.0
0
200.00h
2001
150.0
0
0
1.7
75.0
1.7
228.40
2002
150.0
0
0
1.4
75.0
2.0
228.40
2002 (Suppl.)
100.0
0
0
0
25.0
0
125.00
2003
250.0
0
0
1.0
198.0
2.4
451.40
2003 (Suppl.)
700.0
0
0
0
406.0
0
1,106.00
2004i
250.0
0
0
***
206.0
2.9
458.90
*Foreign Military Financing
**International Military Education and Training Program
***To be determined
a. Suspended in April 1991 under P.L. 102-27; released in early 1993.
b. Released in late July 1993.
c. Restrictions on FY1993 funds waived by Presidential Determination (PD) 93-39, Sept. 17, 1993.
d. FY1994 funds released by PD 94-11, Jan. 13, 1994, waiving restrictions under P.L. 103-87.
e. Three components: $30 million (Administration’s original request); $70 million in additional FMF under
FY1996 appropriation (P.L. 104-134) to cover balance of F-16 aircraft package; and $100 million in
special drawdown authority (P.L. 104-107).
f. These figures include $100 million in economic assistance under the President’s Middle East Peace and
Stability Fund ($100 million in FY1997, $116 million in FY1998).
g. For each of these two years, FMF figure includes $25 million in drawdown authority.
h. Some of these funds to be obligated in later years (FY2001or 2002).
i. Administrations request for FY2004.
Note: These figures do not include debt relief subsidy appropriations listed in Table 1 or small amounts for
de-mining assistance. Nor do they include supplemental funding requested by the Clinton Administration in
FY2001 (never acted upon by Congress) or supplemental funding requested by the Bush Administration in
FY2002.
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