U.S. Organizes Pool of Foreign Aid for Jordan

The United States is quietly orchestrating a massive infusion of international aid for Jordan despite evidence that truckloads of supplies are still pouring across the Jordanian border into Iraq, undercutting the U.S.-backed embargo.

Sources said the aid package, to be unveiled this week, will emphasize large initial payments from Japan and Saudi Arabia in an effort to avoid the embarrassing specter of direct U.S. assistance to a non-cooperating nation.

But officials said the package holds the potential for generous future U.S. aid if King Hussein fulfills his pledge to enforce U.N. sanctions barring all trade with Iraq.

The delicate handling of the aid reflects the Bush Administration’s effort to complete the worldwide trade compact against Iraq without offending the Arab neighbor nation considered crucial to a permanent solution of the crisis.

The initial aid, projected at tens of millions of dollars, is regarded by U.S. officials as crucial to helping Jordan cope with a huge flow of refugees and cushion the crisis’s blow on its economy.

At the same time, in flagrant violation of its embargo commitment, Jordan has allowed supplies of food, sheet metal and building materials to cross its desert toward Baghdad each day in what American diplomats concede is “seepage” into Iraq.

An indication of the new U.S. policy came Monday in a State Department pledge to provide $1 million in assistance to new war refugees in Jordan--the first major U.S. grant to the country since King Hussein failed to support American and U.N. policy in the region.

A ranking U.S. official said Administration calculations are based on a judgment that Jordanian sanctions-busting, while “politically significant,” will “not be the lifeline that keeps (Iraqi President) Saddam Hussein afloat.”

“We are hoping the aid will enable Jordan to be more aggressive in cutting off the flow,” another Administration official said.

Moreover, the officials suggested, the Administration is trying to preserve its public hard line against sanctions violators while also minimizing the danger of an Arab backlash that might be provoked by a rigid policy against King Hussein.

White House spokesman Marlin Fitzwater said Monday only that future aid to Jordan is “under consideration.” But other officials said Japan and Saudi Arabia, in actions coordinated with the United States, are scheduled later this week to pledge assistance worth tens of millions of dollars to Jordan as part of even larger regional aid packages.

“We’re looking at the Japanese to do the major portion of this,” said a State Department official involved in managing the crisis.

The go-ahead for aid to Jordan comes as the Administration has judged that sanctions against Iraq have taken effective hold despite leakage from Jordan.

John H. Kelly, assistant secretary of state for Near Eastern affairs, said in a television interview this weekend that “internal food prices are going through the roof for certain commodities like rice, sugar and so on. We know that there are bread lines.”

“The sanctions are beginning to pinch more and more as each day goes by,” added Robert M. Kimmitt, the State Department’s third-ranking official.

As part of the new aid package, sources said Japan would make its most significant contribution to the effort against Iraq by promising long-term assistance worth $5 billion to $6 billion to countries in the region adversely affected by the crisis.

Most of the money is expected to flow to Egypt and Turkey, but a first-step allotment of at least $80 million is planned for Jordan, the sources said. At the same time, Saudi Arabia has committed itself to a multimillion-dollar package for Jordan and Syria. And the World Bank is completing work on a “structural adjustment fund” providing $150 million in loans to Jordan.

Before the crisis, Jordan sent one-fourth of its exports to Iraq and Kuwait and was able to buy Iraqi oil at prices far below the world rate in a concession that allowed Baghdad to pay off debts incurred during the 1980-88 Iran-Iraq War.

Jordan now contends that the cost of cutting off trade with its next-door neighbor could total $4 billion in one year. While that figure is disputed, a special U.N. committee established to consider the issue declared last week that Jordan is a special case.

Jordan has clearly maintained significant trade of food and other goods to Iraq even after the U.N.-ordered embargo. Daily airline flights between Amman and Baghdad continue. Jordanian officials have indicated that their citizens, many of them sympathetic to the Iraqi cause, would defy any mandatory shutdown.

But U.S. officials insisted in interviews Monday that Jordan’s King Hussein has now taken strides toward honoring a new commitment to heed the trade ban, issuing orders to various ministries to cut ties with Iraq.

While conceding that the flow of trucks to Iraq shows that some trade ties are continuing, the officials said the U.S. naval blockade in the Red Sea--in which more than a dozen freighters have been stopped and searched--has effectively halted the flow of all Iraqi-bound goods through the Jordanian port of Aqaba.

The flow of Jordanian goods that continues is composed largely of food and other goods that are “significant in a political sense, but can do precious little to supply Iraq,” a State Department official said Monday.

U.S. officials also expressed skepticism Monday about Israeli intelligence reports, provided to reporters in Jerusalem, charging that Jordan has continued programs of military cooperation with Iraq.

The reports allege that Jordanian aircraft are flying daily reconnaissance missions along the Saudi Arabian border and relaying the intelligence to Iraq. But officials in the United States said it is unclear what value such a service might provide and suggested that the Israelis might have made the information public to further their own agenda.

In describing the new $1 million in U.S. refugee assistance, however, a State Department official stressed that the Administration regards the humanitarian aid as “entirely a separate matter” from the broader economic questions.

The official made it clear that the question of future U.S. assistance is “not yet fixed” and indicated that the United States will expect more complete Jordanian compliance before “looking at the next step.”

The $1-million package, to cushion the blow caused by tens of thousands of refugees who have streamed into Jordan from Iraq, included a Sunday night airlift by the United States bringing 500 tents and 14,875 plastic water bottles to Amman.

About $300,000 of the aid is to be provided directly to the International Red Cross, while $275,000 will be made available to the U.S. ambassador to Jordan to pass on to Jordanian officials, sources said. In addition, the United States is likely to make available stocks of rice and other food maintained by the Agency for International Development.

While regarded as still the principal hole in the dike around Iraq, Jordan is not the only country believed to be violating sanctions.

A State Department official confirmed Monday that cargo flights had carried food and other goods to Iraq from Yemen but said the United States now had “sewn up Yemen pretty well.”

But officials said the Administration remains deeply concerned about successful efforts by Libya to provide military supplies to Iraq, generally through third countries in Eastern Europe. “That’s what we’re trying to put the kibosh on,” one source said.

Times staff writer David Lauter, in Kennebunkport, Me., contributed to this report.