Donors Scuffle Over Aid to Jordan

International fund set up to help affected nations; Crown Prince Hassan defends Jordan. GULF CONFLICT

THE Gulf Crisis Financial Coordination Group (GCFCG) - created last week to distribute international assistance for Jordan, Egypt, and Turkey - is called an emergency measure. But the actual disbursement of money may not be so fast, as it becomes ensnared in politics. After meeting with President Bush in Washington last week, Turkish President Turgut Ozal said the aid amount discussed by donor countries is $21 billion. But so far, he said, the subject of aid ``has been a lot of thunderstorms, but no rain.''

The distribution of aid has already become a point of contention among GCFCG members, which include both Arab and Western nations. The economies of Egypt, Turkey, and Jordan, have all been severely disrupted by the Gulf crisis. But some nations, including the United States, Kuwait, and Saudi Arabia, have faulted Jordan for slow and only partial compliance with the economic embargo against Iraq.

The brewing controversy over aid to Jordan, has made the process of distributing the funds unclear. US Treasury Secretary Nicholas Brady is chairman of the fund, which was spearheaded by the United States. But other member countries may have a large impact on the earmarking process.

Members of the GCFGC include the Group of Seven industrial powers - Canada, France, West Germany, Italy, Japan, Britain, and the US - as well as South Korea and the six-member Gulf Cooperation Council: Saudi Arabia, Kuwait, the United Arab Emirates, Oman, Bahrain, and Qatar. The fund was created during the annual meeting of the International Monetary Fund and the World Bank.

The fund will extend immediate and unconditional relief as well as medium-term financial assistance through 1991. Canceled trade and commercial relations with Iraq, loss of worker's remittances from the Gulf, and the return of millions of expatriates to Jordan, Egypt, and Turkey have left their already strained economies cash-strapped.

US Treasury and State Department officials have strong reservations about giving a high priority to Jordan for aid. David Mulford, US Treasury Undersecretary for International Affairs, said there will be differences in each donor's stance toward the three countries.

Not surprisingly, Kuwaiti Finance Minister Sheikh Ali Khalifa al-Sabah has stated that his exiled government will not ``offer any of our money to Jordan considering the position it is currently taking.'' By contrast, the Kuwaiti minister strongly supports aid to Egypt and Turkey, two countries firm in their condemnation of Iraq and quick to observe the boycott. Kuwait has begun disbursing $2.5 billion to these countries.

Germany and Japan may take the lead in assisting Jordan. West German Finance Minister Theo Waigel announced that his government's $2 billion overall assistance will be nonrepayable grants rather than loans. But German officials repeatedly point out that if they are pressed for more, it will be hard to justify to the German taxpayer who is already carrying the burden of German reunification costs and assistance to the Soviet Union.

Out of Japan's $4 billion commitment to the Gulf situation, some $600 million has been targeted for immediate transfer to the most affected ``front-line'' nations. According to an official with Japan's Ministry of Finance, roughly $100 million will go to Jordan as a 30-year loan on very soft terms.

JORDAN'S Crown Prince Hassan is bitter that the international community is slow to aid Jordan while his country is under severe pressure to observe economic sanctions against Iraq.

Mr. Hassan calls the criticism of his government's policies concerning Iraq unfair. He brought this message to Washington last week when he met with Bush administration officials and members of Congress. It was his first trip outside Jordan since Iraq invaded Kuwait Aug. 2.

``I'm fully aware of ... the perceptions of infidelity of Jordan, even, dare I say it, the disloyalty of Jordan in terms of its relations with the United States,'' he said. Mr. Hassan, brother of King Hussein and heir apparent to the throne of the Hashemite Kingdom of Jordan, said his government has observed the embargo with ``complete loyalty.''

Jordan's severed commercial relations with Iraq have devastated the economy, and the political costs may be greater, he warns. ``Fifty percent of our GNP [gross national product] has been slashed, unemployment is rampant, people are bitter, desperate and disillusioned.''