The Hashemite Kingdom of Jordan appears to be looking for new allies in Qatar, Turkey, and the Islamic Republic of Iran, as it faces declining subsidies and support by long-time strategic sponsors such as Saudi Arabia, the US, and the Israeli regime.
The still-brewing development also comes as Jordanian King Abdullah II has angered Riyadh, Washington, and Tel Aviv with his growing reservations about joining the Trump administration’s so-called “deal of the century” plan for Palestinians, overwhelmingly rejected by the Palestinian populations and leaders within and outside of the occupied territories.
Jordan’s refusal to join the Saudi-led military coalition against Yemen has also contributed to the disappointment with Amman by the despotic Saudi rulers.
Threatened by persisting protests at home — on top of the declining Saudi cash subsidies that have kept Jordan afloat for decades — King Abdullah has reportedly opened talks in recent months with the longstanding rivals of Saudi Arabia: Turkey and Qatar. Amman has even made subtle overtures to Iran.
“Our relations depend on our interests,” said a source close to the government in Amman, speaking on condition of anonymity, adding, “Jordan doesn’t have any conflict with Turkey or Qatar, or even Iran. What distance we have depends on the benefits to us.”
The 57-year-old King Abdullah has further come under even greater pressure due to Washington’s intention to dictate its own grand “peace plan” for the Middle East — with US President Donald Trump’s son-in-law and senior advisor Jared Kushner acting as its chief architect.
Unlike its neighbors, Jordan has few natural resources. It is an emerging knowledge economy, with key obstacles identified as scarce water supplies, total reliance on oil imports for energy, and regional instability.
Just over 10 percent of Jordan’s land is arable and the water supply is limited. Rainfall remains low and highly variable, and much of the country’s available ground water is not renewable. Its economic resource base centers on phosphates, potash, and their fertilizer derivatives, in addition to tourism, overseas remittances, and foreign aid.
Jordan relies on natural gas for 93 percent of its domestic energy needs, as it lacks coal reserves, hydroelectric power, and large tracts of forest or commercially viable oil deposits. The country used to depend on Baghdad for its oil imports until the US-led invasion of neighboring Iraq in 2003. It also has a surplus of industrial zones, producing commodities in such sectors as textile, aerospace, military, ICT, pharmacy, and cosmetics.
In the last few years, Jordan’s economic growth has slowed, however, averaging nearly two percent. The nation’s total foreign debt in 2011 was 19 billion dollars, representing 60 percent of its GDP. In 2016, its debt reached 35.1 billion dollars, representing 93.4 percent of Jordan’s GDP.
Such substantial increase is attributed to effects of regional instability leading to declining tourist activity and foreign investments, growing military expenditure, persisting attacks on Egyptian pipeline supplying the kingdom with gas, the collapse of its trade with Iraq and Syria, the costs of hosting Syrian refugees, as well as accumulated interests from outstanding loans.
Since the foreign-sponsored war in Syrian began in 2012, Jordan has had an influx of 1.5 million refugees over its northern border. According to the World Bank, Syrian refugees have cost Jordan more than 2.5 billion dollars per year, amounting to six percent of its GDP and 25 percent of the government’s annual revenue.
Due to the introduction of Syrian refugees in Jordan, wage growth declined considerably due to the growing competition for jobs between refugees and Jordanian citizens. The downfall that began in 2011 continued until 2018.
The country’s top five economic sectors contributing to its GDP — government services, finance, manufacturing, transport, tourism and hospitality — were badly damaged by the war in Syria.
Firstly, Jordan received in 2011 and 2014 its largest amount of foreign financial aid in decades. In 2011 alone, it took in 1.2 billion Jordanian dinars (1.7 billion dollars). Additionally, during the December 2011 summit of the [Persian] Gulf Cooperation Council, the regimes of Saudi Arabia, the United Arab Emirates, Kuwait, and Qatar decided to extend five billion dollars in financial grants for development schemes in Jordan over a five-year period, with each state contributing 1.25 billion dollars.
This is while these Persian Gulf states offered Jordan three times as much foreign aid in 2011 as the country received in the previous year, since that was the year of the Arab Spring, which brought the largest and most serious wave of protests in Jordan’s history.
It was obvious that aid Jordan received that year was intended at calming down the Jordanian streets in an effort to avoid regional instability.
Meanwhile, in 2018, Saudi Arabia and two other Persian Gulf nations pledged 2.5 billion dollars to help support Jordan’s economy after a proposed income tax increase sparked some of the largest protests since the Arab Spring in 2011.
In 2017, the foreign grants Jordan had previously received declined by 15 percent. This explains an important aspect of the current economic crisis, and the reason why the government was forced to raise the prices of many goods as well as the income tax rate for the working population, triggering massive protests.
Saudi Arabia — facing budget shortfalls of its own due to lower oil price and attempts at engineering economic reforms — has since cut its regular subsidies to Jordan.
The public unrest in Jordan is not dying down, and the frequent protests are threatening to destabilize the country. Not only are the kingdom’s dire economic straits — one of the factors driving the protests — not improving despite harsh austerity measures, but the situation is getting even worse.
Alongside calls to address the economic problems, various political forces — including not only the traditional opposition but also tribal leaders, former regime officials, and retired military officers — have been demanding political reforms and even calling for limiting the king’s powers.
Among the key forces taking part in protests across Jordan in recent months have been the unemployed and popular protest movements, tribes constituting the regime’s traditional support base, as well as former government officials and military officers — many of whom are also tribal members that have grown disenchanted with the king’s policies.
The “National Follow-Up Committee” — a pro-reform coalition, including military veterans, leftists, and Muslim activists — have railed against growing corruption and economic policies that they insist have brought the country’s economy to its knees.
Before the protest, the committee issued a statement demanding immediate reform and also called on King Abdullah II to enter into dialog with them.
“Despite our repeated calls on the king to expedite reform and to crack down on corruption, he never listened to the pulse of the street or addressed our grievances,” said the statement.
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