His Majesty King Abdullah II said Jordan's economy was moving in the right direction and "our efforts over the past five years have been devoted to conduct economic and social reforms." This is clearly illustrated through the international financial institutions' assertion that Jordan has accomplished a distinguished economic restructuring, King Abdullah added in interview with the Japanese leading paper "Nihon Keizai Shimbun".

However, the King said foreign debts form a heavy burden on the national economy particularly when 28 per cent of the state budget is being used to cover debt services. King Abdullah disclosed that he has asked the Paris Club creditors to reschedule Jordan's debts under soft loans that enables the country to fulfill its economic and social programs and curb poverty and unemployment.

King Abdullah, who noted Jordan's efforts to develop the high Tec sector, urged Japanese investors and businessmen to benefit from the favourable investment climate in Jordan, which has concluded free trade agreements with the U.S., the EU and with 16 Arab countries.

On the situation in the region, King Abdullah called upon Japan and China to play a greater role, along side the U.S., Europe, Russia and the UN, in supporting peace efforts in the Middle East.

The King, who described Japan as fair and balanced partner to peace, said Japan has the financial capacity to settle economic and social problems facing the Palestinian people.

King Abdullah said President Bush's speech on the U.S. Middle East policy was is balanced contained positive elements such as his call for establishing a viable Palestinian state within three years. The speech also called for halting Israeli settlement building in the Palestinian areas, the King added. "Our job now is to put the speech into effect," King Abdullah told the paper.

Answering a question on the call to oust Palestinian President Yasser Arafat, King Abdullah stressed that "it is the Palestinians who decide on their leader." "President Arafat is a leader, elected by his people and he has shown a tendency toward reforming the Palestinian authority and he is facing big pressure to ensure a better political future for his subjects," King Abdullah said.

Launching a U.S. military strike on Iraq would create more instability that would be difficult to handle by the region's states, the King said.