Financial Times: Intifada, Iraq Crisis Behind Slump in Jordan's Hotel Industry
Neatly built five star hotels have become landmarks in Jordan’s capital, Amman.
Everything is ok, except for one thing: customers are not there.
According to a report by the Financial Times Internet edition this week, the Palestinian Intifada and the crisis in Iraq are the main reasons for the recession the industry suffers.
Several five-star hotels have opened in the Jordanian capital and others are under construction to satisfy “the boom in demand the country was expecting this year.”
"The new hotels are opening to nobody," Omar Masri, head of Atlas Investment, a local research and investment company told the FT.com, adding that "other hotels are laying off people and many are operating at 30 percent capacity.”
Jordan is trying to promote itself as "the other Holy Land" through encouraging religious tourism. The country hosts Christian and Muslim religious sites. Minister of Tourism Aqel Biltaji has repeatedly said that the year 2000 was to be the base year for a growing tourism industry. He expected the sector to become number one among the kingdom’s income-generating sectors.
But the empty fancy hotels stand as a reminder that the ambitious government plans are too far-reaching unless peace prevails in the neighboring countries, which is not the case with the escalating Intifada and the latest US-British strikes on Baghdad.
“Stuck between Iraq and the West Bank - two places that seem in perpetual turmoil - Jordan has repeatedly suffered from its neighbors' instability,” said the report.
The paper added that Jordan, accordingly, is not likely to have achieved the 4 percent gross domestic product expected last year. “Although figures for the fourth quarter have yet to be published, economists say that projection will not be met.
"We are dependent on our neighbors, whatever we do internally," an official was quoted by the daily as saying.
"The uprising caused some foreign companies to cancel plans for investment, because the political risk became huge, said Masri.
"We had the feeling that we might be able to make up the loss from the Palestinian uprising with more business with Iraq and that the US would allow this." "But with the strikes, it won't be an easy ride.”
Because Iraq was Jordan's primary trading partner before the Gulf war, the UN has made an exception to its sanctions regime, allowing Jordan to receive about $450m worth of Iraqi oil at discounted prices in return for Jordanian goods. Not surprisingly, Ali Abu al-Ragheb, Jordan's prime minister, became the highest-ranking Arab official to visit Baghdad late last year, according to FT.com.
“His aim, at least in part, was to ensure the smooth continuation of the economic protocol and avert an Iraqi oil price increase that would have devastating effects on the Jordanian budget.”
© 2001 Al Bawaba (www.albawaba.com)
