Interview with His Majesty King Abdullah II

Jordan's King Abdullah II talks with Bloomberg's Farah Nayeri in Amman, Jordan, about the impact of restoration efforts in Iraq on Jordan's economy and oil supply, Jordan's role in the Middle East peace process and the outlook for Iraq's government. Jordan is hosting the World Economic Forum meeting of 1,900 political and business leaders this weekend.

Bloomberg: Your Majesty, we thank you very, very much for being with us today on Bloomberg Television. Let me begin by asking you, the war in next-door Iraq ended a good two months ago. At the present moment we are still lacking in government, and law and order. I wondered, what are your views about that, and its impact on Jordan?

King Abdullah: Well, I think where we have to concern ourselves is the impact on the whole region. And obviously we all want a role for Iraqi people to decide their future as quickly as possible. It's still difficult in Iraq. A lot better than it was two weeks ago. And I think as time goes on things will improve. But to get Iraq back on its feet I think is going to take a bit longer than people would want. And therefore it needs all the energy and support from the international community to make sure that at least the suffering of the Iraqi people is diminished as quickly as possible and the atmosphere is created so that they can take charge of their lives as quickly as they can.

Bloomberg: How does that instability affect Jordan?

King Abdullah: It doesn't affect Jordan per se, in that I think the sincere feeling of the Jordanian people for what the Iraqi's are going through. But at the end of the day, the concern I think for all the countries in the area is the fragmentation of Iraq. And so watching Iraq with sort of hand on heart to hope that things will get back to normal as quickly as possible.

Bloomberg: Is that one of your concerns, fragmentation of Iraq?

King Abdullah: It was a concern of the international community leading into the war. There's still a potential threat of that. And so, yes, there is concern. I think that the powers that be in Iraq from coalition forces are now understanding some of the critical areas, especially in the south, that could create a sort of time bomb, and they're trying to deal with it as best as they can.

Bloomberg: And how do you mean a time bomb? In what way?

King Abdullah: Well, if you have a confrontation between the Shia elements in the south, between each other, and by de facto creating instability in the south, that could spread to the centre and to the north of Iraq. And obviously the potential of spilling over across borders, Kurds into Turkey, and the Shia problem disintegrating into the Arabian Gulf.

Bloomberg: Before the war actually broke out, Jordan was receiving hundreds of millions of dollars in discounted or free oil from Iraq. How is the Jordanian economy coping now?

King Abdullah: Well, we have had some tremendous support by three Arab countries that have covered us because of the lack of oil that's coming from Iraq. And we're very grateful for that. But at the end of the day, it does pose a threat or a lot of pressure on the economy, and one that I think we can solve and come out of in the next year or two, I hope.

Bloomberg: How do you reckon you might solve that issue?

King Abdullah: Well, part of it is that we had to be weaned off anyway from the support of discounted oil. And we're working with the IMF to do that. But that process can't be done overnight. We're hoping to have a programme that over the next two to three years we'll be able to get the budget done in such a way that discounted oil does not affect the economy anymore.

Bloomberg: But how is it going to be compensated for then, the absence of this discounted oil?

King Abdullah: At the moment the support from some of the Arab countries is taking up the slack. And we hope that that support will continue slightly until we can get that balance, as I said, within the next two or three years. But it is obviously an issue of concern to us.

Bloomberg: Have you received assurances from the United States government of further additional aid?

King Abdullah: Well, what I've been asking for recently is our social economic development programme, the programme that I had asked the government to put in to have reached the citizen, and tried to improve his lot. And we've asked from the United States support for that, which is basically education and health, reform in that respect.

Bloomberg: And what has been the response so far?

King Abdullah: Well, again, we're grateful for the support that we've gotten in 2003; we're asking for a supplemental for 2004, but, again, for the social economic reform package only. And it's still 2003, so we have to do some work I think.

Bloomberg: And what kind of amount would you be hoping for?

King Abdullah: I think it's - it would be several hundred million dollars - 200 million roughly, 300. I don't know. I'm not aware of the specific number at this stage.

Bloomberg: Sure, sure. On the matter of the roadmap for peace, what role can Jordan play perhaps in fostering the roadmap, in bringing it forward and perhaps in mediating to obtain an Hamas ceasefire for instance?

King Abdullah: Well I think we've shown over the past two or three years the role of the Jordanian government in identifying a lot of benchmarks: A viable Palestinian state within three years; the roadmap, are three subjects that Jordan has had some at least small part in pursuing. And so I think that it would be only natural that Jordan would continue to be the honest broker between the Israelis and the Palestinians to help them solve their differences. And our relationship with the United States and the EU in the peace process has always been very healthy. And so I think it will be business as usual in that respect.

Bloomberg: But specifically I think there are some US administration officials who say that they would really like your help in the particular issue of the ceasefire by militant groups. Do you think that's a role that Jordan could play? Or is it asking too much?

King Abdullah: No, I mean this is a role that Jordan has been playing with the PLA and with the Israeli authorities over the past three or four years. So it's not a new role. It's something that we've been doing, and will continue to do to help both sides achieve, as you probably are well of now, an agreement on security issues.

Bloomberg: Yes. You're hosting the World Economic Forum here right now. I wondered what role you thought business might play in a region that is sometimes well, often in part ridden by conflict and hostility.

King Abdullah: Well, the old joke used to be that Jordan is between Iraq and a hard place. Now, we have to deal with the hard place. And I think that the future of Iraq is a bright one. We have to solve the Israeli-Palestinian issue if we really want the economies of this region to flourish and move forward. So we have one final critical area of conflict, which is the Israeli-Palestinian or Israeli/Arab issue, which, as we've just said, is something that we're working very hard to work to solve. But having said that, I think that there's a lot of interest in investments in the Middle East. WEF being held in Jordan I think represents a recognition by the international community that the Middle East region is actually a very important place for businesses to look at. And I hope that the conference will be a great success. There's a lot of Arab participation, so there's interest from both sides. And there's tremendous potential.

Bloomberg: In terms of actual - actually helping in the Palestinian/Israeli conflict, what role do you think business might be able to play there?

King Abdullah: Well, I think extremely importantly for the Palestinians is revitalising their economy, and creating jobs, lowering the unemployment rate, and assisting in poverty. The Palestinians are highly educated, very capable people. And any investment into the West Bank and Gaza would have a direct effect I think in the peace of mind and the hope of Palestinians for the future. When life starts to look better, then they have more of a say, more of a control of their lives. And so I think it is critical for the international community to look investing into the Palestinian Authority, and creating a vibrant economy. And I think that the people that they have to work with there are extremely capable and very talented.

Bloomberg: What about the Jordanian economy? What steps are you taking to invite foreign investment here, as opposed to neighbouring Iraq for instance, which is now under US administration?

King Abdullah: Well, Jordan has some very specialised roles, I think: the IT sector, pharmaceuticals, minerals, power distribution. We have many projects of interest. And again I think that the one thing that Jordan always had is its wealth and its export was from its talent. And so working in Jordan, at all levels, I think is of tremendous interest to foreign companies. And also using Jordanian talent that has spilled out throughout the region. I mean, we are a very talented workforce and then so the joint venture aspect of working with Jordanian companies and then projecting themselves into other parts of the Middle East I think is of tremendous interest for international investors.

Bloomberg: What are your views of the US criticism launched currently against Iran and its developments of nuclear weapons - allegedly?

King Abdullah: Well, in Jordan, we have always been against weapons of mass destruction. And I think there comes a time that countries like Jordan, I think there are many others throughout the region that say we want a mass weapons of mass destruction-free ban throughout the region. And I'm talking from Morocco in the Atlantic all the way to India in the Indian Ocean. So all countries in the area should at one stage or another either stop any potential programmes of weapons of mass destruction, or if they have them, get rid of them.

Bloomberg: And do you think that Iran could be "next on the list" quote, unquote?

King Abdullah: I don't think so. I know that the Iranian government is - and I think politically they are one of the most astute nations in the region, have a tremendous ability of reading the political map. I think they do sense that they have a problem with the West or with the United States. And I'm sure that they will be very flexible in dialog on trying to solve the problems that they have. And I'm hopeful that this present crisis will be resolved by peaceful means and by exchange of ideas and positions.

Bloomberg: The regime change is not - in Iran is not something that would be particularly desirable?

King Abdullah: I would hope not. I would again say that I think the leadership in Iran is - has contacts with the West, and I think those are being used at the moment to iron out their differences and to explain their positions. And, again, dialog I believe is the way of solving this particular problem.

Bloomberg: There have been reports that Saddam Hussein and his two sons are still alive. I don't know whether you believe these reports. And if you do, where do you think they might be?

King Abdullah: Well, out of the three, there are reports of at least one, but which one of the three is difficult to say. There are many rumours of where their whereabouts might be if they are alive. Until there is undeniable proof that they're not alive, I think we have to base the assumption that they are alive and well and living in Iraq somewhere. But, you know, I think that if they are at large, it will be more and more difficult for them to keep away from getting caught by the authorities. So I think sooner or later, and probably sooner other than later, we'll have an answer to these questions.

Bloomberg: And what kind of government do you think that Iraq should get now, in terms of composition?

King Abdullah: Well, I think.

Bloomberg: Who should be in it?

King Abdullah: Well, I think it's a government that at the end of the day that the Iraqis choose. And, again, I believe that there is tremendous leadership capability inside of Iraq. And as the situation starts to settle, I think that the coming together of the three different factions of Iraq, you see, the north, the central, and the south, I think the Iraqis are very capable of creating a future government for themselves. What that will be at this stage is difficult to say. But I think we should leave it to the wishes of the Iraqi people as opposed to imposing any outside ideology on them. They're quite capable I think, left to their own, to create the type of government that would make us feel all comfortable.

Bloomberg: One of the figures the US is very familiar with is Ahmad Chalabi, who has a history and a track record in Jordan that is perhaps not a very good one from this perspective. How would you view a prominent role for Ahmad Chalabi in Iraq?

King Abdullah: Well, again, I know that there's a lot that has been made about this particular situation. I don't think I've ever met the man. There is an outstanding issue, a criminal issue, with him in Jordan as in Lebanon and certain other areas. And that's something that he has to deal with those states. And if he is a choice by the Iraqi people, then this is up to the Iraqi people. If he does become a government official in Iraq, then at one stage or another, whatever form of government represents Chalabi, he'll have to deal with the problems that he has with Jordan and Lebanon.

Bloomberg: In your view, how soon should the United States of America leave Iraq and let it govern itself?

King Abdullah: Well, as quickly as possible. And I think that that's an international position. But, again, I see that the difficulties on the ground, you know, I'm always an optimistic person by nature, but I think it will take a bit longer for the dust to settle and for there to be a strengthening of institutions before Iraqis can fully take over the future. Our role is to try - Jordan and all the countries in the region - is to try to speed up that process. But I just - I have a feeling with what we're seeing on the television that it's going to take a bit longer than all of us had hoped.

Bloomberg: So, would you put a time on that?

King Abdullah: You can't, obviously; you know, we would like to see the Iraqis govern themselves in this year, 2003. That would be a sort of a wonderful thing if it could happen. But the process to get there, I just have a feeling, bureaucracy and trying to get civil institutions to move in the right directions might take a bit longer than that.

Bloomberg: A relative of yours, Sharif Ali Bin Al Hussein, has now made a return to Baghdad, and is claiming the throne in the form of a constitutional monarch. How do you view his claim to the throne as a constitutional monarch in Iraq?

King Abdullah: Well, again, I have to say that I'm hesitant on any claims that people should do towards the Iraqi people. I strongly, honestly believe that the Iraqi people themselves should decide their future. If that's a way that they decide, then that's up to the Iraqi people. I think we all have to be very careful on trying to impose our will on the Iraqis, that people will come from outside and say this is what the future should be for you. I think it's for the Iraqis to determine that.

Bloomberg: Your Majesty, thank you very much for being with us today on Bloomberg Television.

King Abdullah: Thank you very much.

Bloomberg: Thank you.