Armour rue REPORT Iraqs neighbors are playing a major role—both positive and negative—in the stabilization and reconstruction of "the new Iraq.” As part of the Institute’s ‘Iraq and Its Neighbors” initiative, a group of leading specialists on the geopolitics of the region is assessing the interests and influence of the countries surrounding Iraq and the impact on U.S. bilateral relations with these countries. The Institute is also sponsoring dialogue between Iraqi national security and foreign policy officials and their counterparts from the neighboring counties. Scott Lasenskys report on Jordan is the fourth in a series of special reports by the U.S. Institute of Peace on "Iraq and Its Neighbors." Jon Alterman’s report on Kuwait and the Gulf States and Steve Simon's study on Syria will be published in the coming months. Peter Pavilionis is the editor of the series. For more infomration about the "Iraq and Its Neighbors” project, go to http://www.usip. org/iraq/neighbors/index.html. Scott Lasensky is a senior research associate at the Institute's Center for Conflict Analysis and Prevention and an adjunct professor of government at Georgetown University. He directs the Institute's "Iraq and Its Neighbors" project The research for this report includes inten-iews with Jordanian, Iraqi, and U.S. officials over the past two years. The author wishes to thank Sam Parker and Kerem Levitas for their research support, as well as the reviewers for their comments. The views expressed in this report do not necessarily reflect the views of the United States Institute of Peace, which does not advocate specific policy positions. SPECIAL REPORT 178 g_ j __DVECE_NIIEFT20A0§ Corrrenrs Introduction 2 Jordan’s Interests: Security and Stability 3 Jordan’s Influence in Iraq: Positive but Modest 7 Compatibility with U.S. Interests—Present and Future 11 Conclusions and Policy Recommendations 15 UNITED STATES INSTITUTE OF PEACE wvwv.usip.org CIAL REPORT 1200 17th Street NW ' Washington, DC 20036 ' 202.457.1700 ° fax 202.429.6063 ~ _II.A...QSW.I..DI ITS Nit9j@Hi§i.BlLR;§;f Scott Lasensk_y Jordan and Iraq An Nhlflya h_ AI My h vi I\§ , Betr/veen Cooperation and Crisis Summary Jordan wants a strong, stable, moderate, and unified ‘Iraq. Having wrestled with the dilemmas of an assertive Iraq for many years, Jordan—like Iraq's other neighbors- now faces a myriad of challenges presented by a weak Iraq. The kingdom, for years a linchpin in the U.S. strategy to promote peace and stability in the region, is now less secure in the wake of the U.S.-led occupation of Iraq. Jordanian leaders worry that Iraq is becoming a haven for terrorist groups, a fear dramatically heightened by the November 2005 suicide bombings in Amman. Jordan also has an interest in the development of an Iraq that does not inspire radical Islamist politics in Jordan. Moreover, the kingdom is anxious about growing Iranian involvement in Iraqi politics, and—more broadly—increasing Iranian and Shiite influence in the region. Despite periodic crises of confidence and lingering Iraqi resentment over Jordan's close ties with Saddam Hussein, the two countries have managed to forge deep ties; in fact, Jordan has taken the lead among Arab states. In the face of repeated attacks and threats, Jordan has maintained a strong diplomatic presence in Baghdad. The kingdom has also played a positive, if modest, role in stabilization and reconstruction efforts. The economic impact of the Iraq crisis in Jordan has been mixed. Jordan has ben- efited greatly from serving as a “gateway” to Iraq for governments, aid workers, con- tractors, and businesspeople; its real estate and banking sectors are booming, and it stands to reap more benefits from increased trade and transport should the situation in Iraq improve. However, with the fall of Saddam Hussein, Jordan lost the sizable oil subsidies and customary shipments it received from Iraq. One of Jordan's principal economic interests in the new Iraq is securing future energy assistance.