950818

Jordanian traders

against snapping

ties with Iraq

AMMAN: Cutting economic ties with Iraq would deal a severe blow to Jordan's economy and new outlets in the Gulf and Israel would not compensate, Jordanian business leaders said.

"We will not benefit from U.S. efforts to gear our economy in the direction of Israel," said Wasef Azar, general manager, of Business Bank. "Our direct immediate economic interest is with Iraq...its our strategic depth, our economy's structure has been consolidated towards links with it."

Jordan's business community, still waiting to see actual benefits from its 1994 peace treaty with Israel, harbours hopes a post-sanctions Iraq would be a main export market.

Up to 25 percent of Jordan's total exports are going to Iraq -- mainly goods excluded by U.N. economic sanctions slapped on Baghdad after it invaded Kuwait in August 1990, economists say.

Senior Jordanian officials confirmed on Friday that U.S. Assistant Secretary of State Robert Pelletreau and Special Assistant to the President Mark Parris, who held talks with King Hussein on Thursday, discussed the issue of "disengaging" Jordan's extensive economic ties with Iraq.

The Washington Post quoted senior U.S. officials on Thursday as saying that the Clinton administration is sending top envoys to Jordan to persuade it to sever most of its economic ties with Iraq to put new pressure on the Baghdad government.

The Post said the high-level U.S. team would inform Jordanian officials that Washington was trying to convince Saudi Arabia and Kuwait to sell oil to Jordan to replace oil now supplied by Iraq, the paper said.

Industrialists say losing a billion dollar yearly trade with Iraq, including a $500 million re-export trade, could not be compensated by an estimated $100 to $150 million of business a year in the next few years with both Israel and Palestinian self-rule areas.

Many also fear that loss of remaining trade with Iraq after U.N. sanctions will only benefit Turkish and Iranian traders, who engage in extensive cross border trade. Jordan's business leaders say that cutting Amman's extensive ties with Iraq, as sought by the United States, would be a recipe for economic disaster that could not be compensated by tapping new outlets in the Gulf and Israel.

This is because Jordan's infrastructure has been geared to economic links with Iraq, its eastern neighbour, for so long, they say.

At present up to 25 percent of Jordan's total exports go to Iraq -- mainly goods excluded from the U.N. sanctions.

But Jordanians are not impressed. "Jordan cannot do without Iraqi oil," Energy and Mineral Resources Minister Samih Darwazah told Reuters.

Jordan's industrial base, which sprang up to serve the Iraqi market during the 1980-1988 Iraq-Iran war, would be crippled, they say.-Reuter