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Al-Ahram Weekly On-line 9 -15 November 2000 Issue No.507 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly On-line 9 -15 November 2000 Issue No.507
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region International Economy Opinion Culture Books Travel Living Sports Profile People Time Out Chronicles Cartoons Letters Exigency's last word
By Salah HemeidA few months ago, a number of top Iraqi officials briefly shunned going through Amman's airport, which they had used to travel overseas since the 1991 Gulf War, and Baghdad appeared to be taking steps to scale down its reliance on Jordan as its key trade partner and its main overland link to the outside world.
Last week, however, Jordanian Prime Minister Ali Abul-Ragheb visited Baghdad despite US objections to the move -- Jordan being one of its main allies in the Middle East. Abul-Ragheb became the highest ranking Arab official to fly to the Iraqi capital since the war. With three important trade and economic agreements signed during his two-day visit to Baghdad, the two Arab countries are seemingly opening a new chapter in their bilateral ties. Over the past decade, their relations have oscillated over issues ranging from Jordan's hosting of Iraqi opposition groups to its strong ties with the United States and its major role in promoting the Middle East peace process.
Under the terms of these agreements, Iraq will continue to provide Jordan with its full oil needs for the coming year -- half of the supplies completely free of charge and the other half at a discounted rate of $20 per barrel, up from $19 this year. The two sides also agreed to raise bilateral trade in 2001 to a new total of $450 million from its current $300 million figure. The first agreement means the Jordanian government will not be forced to take a drastic decision to raise oil and gas prices to curb its budget deficit and the second will greatly benefit Jordanian industries, many of them running at low production capacities.
But perhaps the more significant factor in developing closer bilateral strategic economic ties between the two countries is the initial agreement reached during Abul-Ragheb's visit to build an oil pipeline to replace the tankers currently used overland to carry Iraqi crude to Jordan. Abul-Ragheb said the 750-kilometere-long pipeline will cost some $350 million, with each country paying for the section of the pipeline lying inside its territories.
So what has motivated Jordan and Iraq to take this drastic step lauded by the media in both countries as a great stride that will usher in a new chapter in bilateral ties between the two Arab neighbours? Whatever the answers, the agreements signify a new commitment by the two governments to solve their political differences and an increasing realisation that the two sides would need each other in an era of tremendous political, economic and security challenges facing both. Iraq remains Jordan's main trade partner and sole supplier of oil, while Jordan can utilise its extensive network of foreign ties to champion Iraq's cause and demand an end to the devastating 10-year-old UN sanctions.
Many observers believe Iraq is successfully using its huge oil resources in its struggle against the US-led economic sanctions and the political isolation imposed on the country since its 1990 invasion of Kuwait. Last week, both the influential Cyprus-based Middle East Economic Survey and Reuters news agency disclosed that Baghdad and Damascus have completed repair of an Iraq-Syria oil pipeline -- inoperative since 1982. Pumping is due to restart once a technical inspection is completed. Iraqi Oil Minister Amir Mohamed Rashid said Wednesday the Iraq-Syria pipeline would be ready to export crude in a couple of days, while another Iraqi industry official said Baghdad was waiting for Syria to give the green light before injecting the crude at a rate of about 100,000 barrels per day, to be built up gradually to 200,000 bpd.
Iraq resumed domestic flights to the southern towns of Basra and Mosul , in defiance of the no-fly zone imposed by US and British warplanes since the end of the Gulf War in 1991
Such a move appears to put sanctions-bound Iraq back on a collision course with the United Nations, which controls the country's oil export revenues under the 1996 oil-for-food agreement. Once the crude starts flowing through the pipeline, another nail will have been driven into the coffin of the embargo. With more oil supplied to the market, Iraq will be able to secure additional revenues. What is more, Iraq will be in a position to woo two of its key neighbours -- Jordan and Syria -- and neutralise them in its conflict with the United States. Also, with its enormous petroleum reserves, Iraq will be able to exercise considerable influence on the world market, possibly turning economies of major industrialised countries into pawns in the Iraqi regime's game of survival.
Some analysts believe that Washington will not object to the oil pipeline through Jordan. American construction companies had attempted to build the pipeline with an export terminal in Aqaba in the 1980s. When Iraq resisted attempts to involve Israel in the project, construction was stopped. According to analysts, the pipeline is one of the multinational projects the US has been promoting to encourage regional economic cooperation and integration during the post-Middle East peace era. While both Iraq and Jordan say the pipeline will be built strictly for bilateral purposes, the analysts believe its construction could be an incentive for a wider participation and rehabilitation that could possibly involve both Iraq and Israel.
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Cairo-Baghdad-Cairo 19 - 25 October 2000
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