At the breakfast meeting with media leaders

Thank you very much for your participation and for your interest.

I hope that in the next hour we can brief you on some of the developments that have been taking place in Jordan and perhaps more importantly on what our future plans are.

Jordan has played a pivotal role in the peace process since its commencement at Madrid in 1992 with the aim of reaching comprehensive peace to the Arab Israeli conflict.

Jordan has signed a peace treaty with Israel in 1994 and has since acted as a catalyst in assisting the parties on the Palestinian, Syrian and Lebanese tracks and in lending them a helping hand in their bid to achieve similar accords.

Jordan keeps close contacts and regular consultations with the Palestinian side at all levels. Jordan, after all, has been the closest to the Palestinian problem since its inception in the earlier decades of the century. The developments at that track have a direct bearing on Jordan itself.

A main issue of concern to us is the problem of refugees. Jordan received the biggest number of Palestinian refugees. Almost 40% of those refugees registered with UNRWA reside in Jordan.

Jordan believes that a settlement for the Palestinian refugees problem should be based on UN Resolution 194 of 1948 which calls for the right of return and compensation, as well as the principles of International law.

Another issue is that of water resources. Since the Jordan River and its tributaries form the backbone of water supply to Jordan, Palestine and Israel, a solution for this problem, which should include equitable sharing, should be done on a regional basis. Syria and Lebanon should be involved as countries from whose territories come the sources of the main tributaries of the Jordan River.

Furthermore, since most countries in the region suffer from the scarcity of water resources, means and ways should be found for regional cooperation on joint supplementary water resources. We believe that international assistance in this respect, both technical and financial is badly needed and required.

The Deputy Prime Minister, the Minister of Foreign Affairs, the Minister of Trade and Industry, the Minister of Tourism and other officials are all here, and I hope that you can make good use of them by asking all the questions that you have on your minds. Also, representatives of the Jordanian private sector are with us today.

I am delighted at the increasing level of coordination and trust that is being built between the public and private sectors in Jordan.

In order to enhance this improving relationship, I took the initiative to bring them together at a retreat at the Dead Sea, away from formal deliberations and from the media, where all of us, regardless of titles or ranks, sat together and discussed as partners in the development of our own country, how we can best achieve sustainable positive economic growth.

We finally produced a document, a blueprint for what is needed to achieve economic growth, further economic liberalization, more encouragement of foreign direct investment, educational reform, civil service reform, more legislative amendments and judicial reform.

A 20-member Economic Consultative Council that I oversee personally was formed with 15 of its members from the private sector; representatives of leading economic sectors; mandated to oversee the implementation of the Dead Sea program and to spur faster measures by both the public and private sectors.

Since I assumed my responsibility last year, I made the economy priority number one. Measures needed to be taken in order to encourage investment in Jordan. A timetable was drawn for privatization, for amendments to necessary legislation and for accession to the World Trade Organization. I have to admit that I am quite satisfied with what has taken place so far: Parliament reconvened this summer for an unprecedented second extraordinary session, and enacted legislation designed to ease our accession to the World Trade Organization, including laws for the protection of intellectual property rights.

As you well know, accession to the WTO, the coming into force of the Association Agreement with Europe, and the establishment of Qualifying Industrial Zones, are all designed to encourage investments in export oriented manufacturing and services. Parliament ratified in its extraordinary session the Association Agreement with Europe, and we have increased the number of QIZ's to five. We hope that accession to the WTO will pave the ground for additional FTA's to be concluded with other major trade blocs in the world in the not too distant future.

Privatization was accelerated, and an agreement was reached with a U.S.-led international consortium for the operation of the Aqaba Railway Company. This is estimated at over $100 million in new investments. Last week, an agreement was signed with a consortium grouping France Telecom and the Arab Bank for their acquisition of 40 percent of the Jordan Telecommunications Company. The contract with Suez Lyonnaise des Eaux for the management of the Greater Amman water distribution system has also come into effect. The privatization of Royal Jordanian is underway, and the bids for the development of Jordan's first 350 megawatt independent power plant are currently being evaluated.

A new sector of our economy has also been identified by a private sector led study as one where an inherent competitive advantage can turn it into a leading field. The study, known as the REACH Initiative, identifies the number of Jordanian graduates in the information technology field and the competitive labor cost as platforms upon which to build an industry. An enabling legislative environment, attractive government incentives of customs and tax exemptions, and more importantly, a modern telecommunications infrastructure were identified as sufficient conditions for the promotion of Jordan as a destination for IT and software-development multinational companies to come and bring their capital and know-how. We are working on all these requirements and shall host a meeting in March for all interested companies. Additionally, the G-7 Summit held in Cologne last July issued a statement in support of a multilateral action for assisting Jordan in alleviating its debt burden. We are closely working with creditors on a bilateral level in order to agree on mechanisms for debt forgiveness or conversion. We made considerable progress with France and Japan on this issue.

Our main purpose is to release funds in the budget allocated for debt servicing to social, educational and health programs rather than to investments which are best made by the private sector. On the contrary, we are seeking debt relief in order to make Jordan a more attractive place to invest in. As economists have argued, reducing the debt-to-GDP ratio would necessarily reduce the cost of capital for any investment in Jordan.

What we have done over the past five months is good but it is only a beginning. More work has to be done on promoting the leading sectors in the economy. Recently, we have identified media and broadcasting as possibly another sector for growth and we have to work on that in order for us to be a regional hub. Freeport is an additional area which I am convinced can spur economic growth. Bureaucracy has to be controlled and civil service reform is a must. The privatization of the electricity company, the deepening of our financial sector, the strengthening of our regulatory frameworks are all areas that need work in the economic domain.

Guaranteeing an independent judiciary is also a main prerequisite for economic stability and investments. We have a long way to go but we shall do it because we are intent on achieving economic growth that can absorb our growing young labor force, and provide all Jordanians with an equal opportunity for prosperity and security.

We look forward to the establishment of joint ventures between Jordanian and foreign enterprises that can transfer capital, know-how, and management skills to Jordan and promote Jordanian exports to the world. Rania and I are very pleased to have had this occasion to meet and interact with you. We wish you all the best of luck and I hope to see you in Jordan in the not too distant future.

I thank you once again for your attendance.