These are uncomfortable times for King Abdullah, the 38-year old Jordanian monarch who has sat atop the Hashemite thrown since the death of his father King Hussein in 1999. The uprising in the Palestinian territories, Israel’s harsh counter-reaction and tough economic times have converged together, creating a force that is severely stretching the intricately-interwoven fabric of Jordanian society.
Even when the economy has been buoyant, Jordanian ruling family has traditionally been required to perform a delicate balancing act. The kingdom occupies a strategic stretch of land, bordered by powerful neighbors with often-divergent interests—Iraq, Syria, Saudi Arabia, Egypt and Israel, with which Jordan has a peace agreement since 1994 and which also controls the eastern border of the immediately adjacent Palestinian West Bank
The three-month uprising in the West Bank has proven a political minefield for the young monarch. Jordan’s connection to the territory to its west runs deep. Between 1948 and 1967 it controlled the area and actually annexed it in 1950, when it created three governorates — Nablus, Al-Quds (Jerusalem), and Al-Khalil.
They were lost to Israel in the June 1967 war, but that conflagration led to a dramatic increase in the number of Palestinians living in Jordan. Its Palestinian refugee population, which already stood at 700,000 in 1966, grew by another 300,000 from the West Bank. Today, more than 1.4 million Palestinian live in the kingdom.
Jordan’s peace treaty with Israel has always been criticized by a wide section of the Jordanian public ¯ a major portion of which is of Palestinian descent. Indeed, for most of the Jordanian population, few tangible benefits have emerged from the reconciliation with Israel. In real terms, salaries have fallen and unemployment today runs between 25 and 30 percent. Almost half of Jordan’s citizens live below the official poverty line. To compound matters, in the wake of the Palestinian uprising, jittery foreigners have been canceling travel bookings to the kingdom. As a result tourist arrivals are down 35 percent.
The economic peace dividend, which the Jordanian leadership had hoped for in 1994, was anemic at best. While real GDP increased by 6.6 percent between 1995 and 1999, providing an average annual compound growth rate of 1.7 percent ¯ because the population increased by 15.3 percent over the period ¯ there was a decrease in real GDP per capita to about $1,600 in 1999 and consequently a steady fall in the standard of living.
Today, Jordan’s debt ratio is about 100 percent of GDP, which is one of the highest rates in the world, and servicing the debt consumes more than a quarter of the government’s budget. In 1999, according to the Central Bank of Jordan, the kingdom’s GDP stood at $8.07 billion.
In October, the kingdom was rocked by unrest, ostensibly led by Jordanian-domiciled Palestinians in identification with the uprising over the border. The Jordanian security forces acted sternly, and King Abdullah described the people behind the vandalism that had accompanied the unrest as being from a minority in the kingdom that is attempting to destroy Jordan's reputation. “We are ready to confront those who seek to destabilize the security of the nation," the king said.
King Abdullah has been demonstratively careful to avoid a situation in which political disquiet may spill over into economic strife. In late December, he announced that he would be selling land to help cover salary increases for the military. The country’s $3.2 billion budget for 2001 already includes a deficit of $563.4 million, and the Jordanian cabinet refused to add to it by approving the $14 per month pay rises the king had requested.
In saying he would use his own money, Abdullah followed a page out of his father’s book. In 1997, King Hussein had sold a house he owned in London for $8 million to pay for work on the Al-Aqsa mosque in Jerusalem.
But the Jordanian king still has his work cut out for him. Sources report that a 14 percent increase in the price of fuel is in the offing, early in the new year. This has the potential to spark off a new round of trouble, which in this case could be directed firmly against the government and not, as was the case previously, in sympathy with the Palestinians of West Bank and Gaza. Violent demonstration in reaction to price rises is not an unknown phenomenon in Jordan.
Although he was a career soldier before his ascension to the thrown, King Abdullah has devoted himself to economic matters over the past year and a half. He has led an invigorated program of economic reform, which now also includes foreign debt restructuring, privatization and structural change, designed to attract foreign investment.
The IMF sponsored a structural adjustment program, which will provide new loans over a three-year period to help the government’s commitment to further economic liberalization. The World Bank extended a $210 million loan in 1999, and the European Union and Jordan signed an aid-package in April 2000 worth €129 million — $117.9 million — in grants, soft loans and investments to support various aspects of the reform program.
Then, on October 24, King Abdullah traveled to the White House to sign a Free Trade Agreement (FTA) with President Bill Clinton, making Jordan is only the fourth country in the world, after Canada, Mexico and Israel to enjoy such a status.
But time is not on the king’s side and other forces in the region are affecting his plans. The weeks and months ahead are likely to prove critical. – (Albawaba-MEBG)
© 2001 Mena Report (www.menareport.com)
