Reform&liberalization: King Abdullah\'s economic agenda

Published December 7th, 2000 - 02:00 GMT

King Abdullah has spent much of the year expanding the country's economic liberalization and lending support to a growing pro-reform camp. In tandem, he continued forming regional alliances vital for the survival of Jordan in a shaky region with politically unstable neighbors like Iraq, Israel and the Palestinians. The Monarch, who ascended the throne in February 1999, quickly crafted his national agenda, giving priority to economic reform in a country saddled with a $7 billion foreign debt, rising poverty and joblessness.  


“The King's strongest point is that he identified his priorities quickly and worked hard to achieve them, especially on the economic front,” said liberal Senator Taher Masri, a former prime minister. “But there are impediments he is not to be blamed for, including regional instability, the small size of the Jordanian market (five million people) and inefficiency due to bureaucracy,” Masri said.  


Jordan's signing of a Free Trade Agreement with the US in October was a personal triumph for the King, capping an ambitious modernization drive to draw foreign investors to resource-poor Jordan. The pact — subject to US congressional approval — will put Jordan on an equal footing with Israel, Mexico and Canada, offering duty free access to the world's largest economy and encouraging multinationals to set up export-oriented businesses.  


It builds on Jordan's accession to the World Trade Organization (WTO) in January, several Qualifying Industrial Zones operating across the Kingdom, a Jordan-EU partnership agreement signed three years earlier and a free trade pact with the UAE. On all his foreign trips, the King has promoted tourism and investment potentials in key areas of IT, pharmaceuticals, minerals and fertilizers to governments and company executives alike.  


“2000 was the year of consolidation and implementation (of reforms), though not without its difficulties,” said Bassem Awadallah, 35, head of the Economic Unit at the Royal Court. “Hopefully, 2001 will be the start of some changes taking shape on the ground that will reflect on Jordanians.”  


At the heart of the King's economic agenda lies a 20-member Economic Consultative Council he named last December to implement a blueprint for socio-economic, administrative and educational reform he had defined a month earlier. The council groups private and public sector officials, an effort that helped cement ties between the two sides, who were adversaries for years.  


Although the council has no legislative power, it provided the King with a tool to offset resistance from the old guard—then led by conservative premier Abdur-Ra'uf S. Rawabdeh—and the bureaucracy.  


“The ECC has achieved 75 percent of its objectives,” said Awadallah, the council's rapporteur. It has dealt with fiscal, financial, health and judicial reforms, vocational training, a bloated civil service, economic restructuring, privatization, e-government and expansion of the stock market, which recently signed dual listing pacts with its counterparts in Bahrain and the UAE.  


Responding to an ECC suggestion, the government introduced computer skills and English as a second language to first graders in all public schools. The council also endorsed a controversial plan to turn Aqaba into a special economic zone by January 1, 2001, provided the government with research papers and prepared necessary legislation for the WTO entry.  


“Only one and a half years ago, Jordan was on the US `Watch List' (of countries found in consistent violation of copyright laws), no one cared about the IT sector, giants like Microsoft did not want to hear Jordan's name and nobody knew what e-government was all about,” said a businessman.  


Though reforms have gone a long way, politicians and officials agree that they have not yet managed to improve the living standard of most Jordanians. Once again, the influence of regional events on the Kingdom has been underlined. This time it is the Palestinian uprising against Israel, which erupted in the West Bank and the Gaza Strip on  


Officials, who had expected a 4 percent economic growth in 2000, up from 1.5 percent in 1999, will have to settle for lower targets after the unrest took a toll on tourism and scared away foreign investors. “Major IT companies and pharmaceuticals are showing unprecedented interest in Jordan,” said one official. “But the political situation next door is troubling... all will not happen if conditions there do not improve.”  


For Jordan, where nearly half of the population is of Palestinian origin, what has become known as Al-Aqsa Infitada has placed the country under enormous strain. Popular sympathy for the Palestinians has spirited hundreds of mostly peaceful street protests, eroding the belief that Jordan's 1994 peace treaty with Israel would ensure economic progress regardless of turmoil beyond the Jordan River.  


A prolonged confrontation would intensify popular pressure on the government to break ties with Israel and would strengthen the Muslim-led vocal opposition, who see the deaths of Palestinian protesters as vindicating their hostility towards Israel. “Advocates of boycotting the Israeli enemy have emerged stronger, and the peace camp has diminished,” said Abdul Majeed Thuneibat, head of the Muslim Brotherhood Movement.  


In a popular move, the government has delayed sending its ambassador-designate to Israel as a sign of protest of the Jewish state's “excessive use of force” against the Palestinians.  


Also, Prime Minister Ali Abul Ragheb visited Iraq, the first such visit by an Arab premier since the UN imposed sanctions on Baghdad after it invaded Kuwait in 1990. The much-trumpeted trip scored points with the opposition and ordinary Jordanians who, after six years, still see no sign of the promised economic benefits of the peace treaty.  


The visit resulted in a renewed oil deal for Jordan at prices still well below international market rates and an agreement to increase trade with Iraq, Jordan's long-time and principle business partner. “To improve the Jordanian economy, you need both the Palestinian and the Iraqi markets,” said an economist. “As long as both are under siege, I do not think our economy will do that well.”  


On the internal political front, many see the King's appointment of Abul Ragheb on June 19 and his retirement of General Intelligence Department Chief Samih Battikhi on November 9 as major turning points in favor of the growing pro-reform current. Both moves came months after the King navigated his way through the hidden agendas and personal rivalries among some of his advisers, former ministers and court officials.  


Abul Ragheb is committed to trade liberalization, to wider political freedoms and to the King's vision of an integrated Jordanian-Palestinian society based on equality and merit. “The King could have gone faster on reform, but much of the first year of his reign was wasted under the Rawabdeh government,” said a senior politician.  


Rawabdeh, a career-bureaucrat and member of the Lower House of Parliament, alienated reformers while his strong character and sharp tongue proved damaging to the government's relations with deputies and the media.  


Officials and analysts said the King's appointment of Battikhi, 56, as a senator on November 23, halted popular speculation that he was to move on to a top political post after his GID retirement. Battikhi, who also held the post of advisor to the King since October 1999, gave up his palace job after he took the oath as Senator.  


While some argued that Battikhi's double portfolio — unprecedented in Jordan's modern history — gave the GID an excessive say in public affairs under security pretexts, others insisted that security and stability had to be the priorities during a naturally delicate period at the beginning of a new reign.  


Officials said Abul Ragheb and Battikhi did not see eye-to-eye because of their differing perceptions of the boundaries between the security apparatus' and the government's authorities and jurisdiction.  


Abul Ragheb's decision in October to reinstate Mustafa Hamarneh as director of the Center for Strategic Studies at the University of Jordan after Battikhi ordered his demotion in July 1999, was at first blocked by the GID chief. Abul Ragheb also rejected attempts by Battikhi to interfere in the naming of some ministers to his cabinet.  


Battikhi's move to the Senate freed up the government to proceed with intended reforms and signalled an end to the transition.  


“As it should be, the King wants the government to have more authority and he wants other departments to work under its general policy,” said one politician. “This is a major victory for the new guard led by Abul Ragheb and a major loss for the old guard, led by Rawabdeh, Battikhi and others”.  


The King has surrounded himself with young Western-educated palace aides who share his vision, urgency and action-oriented approach. But the change of guard has alarmed some, including former officials who argue that he could still benefit from experienced politicians and statesmen to cope with regional political turbulence.  


Still, according to one senior official, this is not problematic. “He is hearing advice from newcomers and from the establishment — the army, the security apparatus and the foreign ministry who provide a traditional continuation of the regime and still have a say”.  


Meanwhile, billboards designed to forge a new sense of national unity and improve the mood of skeptical Jordanians, have sprung up across the Kingdom in a campaign supervised by the Monarch. In parallel, King Abdullah has launched an international campaign to lure investors and attract tourists.  


“You have to remind people that they have to be proud and to believe in their country,” said one official, referring to the first phase of the campaign which projects an Arab verse of poetry that says the more determined you are, the more you can achieve.  


“The stress is on people who can achieve and those who can reach the top, not because they are subject to a social quota, but because it is an achievement-oriented civil society that you want to build,” said one official close to the unprecedented drive. “This has to be instilled in the new generation, who make up around 70 percent of the population, to counter the negative views they come across.”  


The next phase of the campaign, to be launched early next year, will introduce photos of young and old Jordanian heroes to highlight success stories. And with the advent of elections next year, voters will hopefully be encouraged to cast their ballot for people who embody the vision of King Abdullah.  


But in a conservative, tribally dominated, country, the campaign has raised controversy, as has much of the King's youthful style of rule — a combination of Arab traditionalism and Western modernism.  


Some Jordanians have dismissed the campaign as irrelevant — one-third of their compatriots live below the poverty line, and unemployment is officially estimated at 14 percent and unofficially at up to 22 percent. But others said non-conventional ideas were bound to stir debate. “Eventually it will succeed in creating perceptions of the aspired change,” said one official.  


In contrast to his enthusiasm for economic reform, the King has been reluctant to introduce “fast-track” political change, party leaders and independent politicians say. “Maybe it was not easy to advance political reform while certain forces were in place,” said one official.  


But many hope trade liberalization will eventually have a positive effect on the country's drive to widen democratic reforms, launched in 1989. “Economic and political reform must go hand in hand,” said a leading Islamist figure. “But so far, the political equation of the process seems left out.”  


However, he and others have taken heart from the King's stepped up effort to reform the state-run media and his public commitments to pluralism, a democratic system and general freedoms. Such repeated messages have prompted Information Minister Taleb Rifai to publicly call for an end to the umbilical cord linking national security, the press and television to ensure a professional media. “The King's biggest test on political reform will be the electoral law,” said one politician.  


However, government officials say there are no plans to change the current one-person, one-vote Elections Law to ensure fairer representation in the November 2001 general elections. Instead, they are promising easier administrative procedures and increased districts in the densely populated areas of Irbid, Amman and Zarqa.  


The Muslim-led opposition, who boycotted the 1997 elections to protest the electoral and press laws, has said they will not take part in the ballot if the electoral system remains unchanged. However, officials believe that the opposition will eventually rescind their decision on grounds they gained little from their policy of self-exclusion from the incumbent parliament.  


On the foreign policy scene, many politicians and analysts agree that King Abdullah faces the biggest challenge of his 21-month reign. He has to reconcile the peace treaty with Israel and the Kingdom's friendly ties with the US while accommodating public sentiment.  


But over the past year or so, King Abdullah has struck a delicate balance — making Jordan less dependent on Israel while improving ties with all Arabs states, including Syria, Iraq, Libya and Gulf Arab countries.  


Even Jordan's ties with Egypt, often uneasy because of decades of rivalry over regional roles and Middle East peace efforts, have moved forward. Both leaders have promoted policies of moderation, and their foreign ministers are working jointly to calm the unrest and re-engage Israel and the Palestinians in final status peace talks.  


The Palestinian cause and its effect on Jordan's internal situation will continue to influence King Abdullah's thinking and strategies as it did his father because of close historic, political, economic and demographic links.  


Officials have braced themselves for four possible scenarios on the Palestinian-Israeli track — a unilateral declaration of a Palestinian state, the declaration of a state as a result of an agreement, a continuation of the status quo or a total breakdown of the peace process and Israel's re-occupation. “All of these four scenarios will bear negative effects on Jordan, but the declaration of an independent Palestinian state within the framework of an agreement would be the least evil,” said a senior Jordanian official. — ( Jordan Times )  


By Rana Sabbagh-Gargour

© 2000 Mena Report (

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