The Caravan – August 2019

the lede

AUGUST 2019 17

asa multilateralpartnershipwitha “renewed

focus”onJordan’seconomictransformation,the

agreementresultedinanannualgrantofoversev-

enhundredmilliondollarsforthenextthreeyears.

Thiswasinadditiontoconcessionalloansof$1.

billion,aswellastherelaxationoftheEuropean

Union’straderegulationsforJordanianproducts.

Thisfinancialaidwasaimedattargetssuchas

providingworkpermitsforSyrianrefugees,and

ensuringallSyrianchildrenwereenrolledin

schools.Nevertheless,theJordaniangovernment

facesconsiderablechallenges.InFebruary2018,

itshandforcedbytheworseningeconomicenvi-

ronment in the kingdom, it stopped subsidising the

medical treatment of Syrians, leading to a fivefold

increase in their medical expenses.

To make things worse, in August 2018, the Unit-

ed States government announced that it would stop

all funding toward the UN relief agency for Pales-

tinian refugees. It also passed the Anti-Terrorism

Clarification Act of 2018, which allows recipients of

US aid to be sued in US courts. When the law came

into force in February 2019, the Palestinian Author-

ity wrote to the US State Department that it would

stop accepting aid, out of fear of being implicated in

counterterrorism lawsuits in the United States.

Earlier, in December 2017, the Donald Trump

administration also recognised Jerusalem as the

capital of Israel. The move was deemed unaccept-

able by both Palestinians and Jordanians, since it

would entail giving up their stake in eastern Jeru-

salem, which was annexed from Jordan by Israel

in 1967. The Jordanian government considers East

Jerusalem integral to the two-state solution, as the

capital for a future Palestinian state.

Meanwhile, Jordan’s economy has been wilting

under increasing debt, due to its large public sector,

generous subsidies and the drying up of foreign

capital and aid. In 2016, the kingdom accepted a

structural-reform package from the International

Monetary Fund. However, the IMF mandated tax

hikes and the removal of government subsidies

in 2018, resulting in massive protests across the

country, eventually leading to the resignation of the

prime minister, Hani al-Mulki.

The domestic situation is further exacerbated

by the lack of opportunities. While the average

growth rate during the first decade of the century

was 6.5 percent, it dropped to 2.5 percent during

the 2010s. This slowdown is primarily attributed to

the effects of the global financial crisis in 2008–09,

as well as the regional turbulence that accompa-

nied the Arab Spring two years later. The unem-

ployment rate remains at an alarming 18.7 percent,

while youth unemployment has soared to a record

high of 40 percent. The kingdom has also wit-

nessed a reduction in its exports as a consequence

of the unstable geopolitics in its neighbourhood.

In February this year, the government finally

responded to this domestic turmoil with what King

Abdullah II called, at an investment summit in Lon-

don, a “strategic refocus on our competitive advan-

tages.” According to the king, this would mean de-

vising an economic strategy that “prioritises certain

sectors that benefit directly from Jordan’s high-val-

ue human capital,” as well as “foster a healthy busi-

ness climate” in the country. The government plans

to make private players and public–private partner-

ships central to spurring economic activity, and has

also positioned the capital, Amman, as a gateway

to business in West Asia. However, the decrease in

public expenditure following the IMF restructur-

ing has had the unintended consequence of stalling

private-sector growth, stifling investment in an

atmosphere of austerity.

In a country where one in three people is report-

ed to be employed by the state, the government’s

effort to direct people towards private-sector em-

ployment has also faced opposition. In February,

around a hundred and fifty job seekers from Aqaba

marched on foot for over three hundred kilome-

tres to Amman, and staged a protest demanding

jobs in state-run enterprises. Similar marches

towards Amman were reported from the cities of

Irbid, Karak and Madaba. The protesters rejected

the government’s offer to find them jobs in the

private sector.

During the 2011 Arab Spring, protests erupted

in Jordan as well, demanding better governance.

However, Abdullah prevented the protests from

spiralling out of control by dismissing the govern-

ment and significantly reforming the constitution.

Part of the reforms included the establishment of an

independent election commission. As a result, the

royal family has an image of being reform-oriented,

of espousing liberal values in a region historically

perceived to be authoritarian and rent seeking.

However, economic deprivation is turning public

sentiment against the monarchy. It is evident that

the king’s plans are not working, and that thepro-

posed “strategic refocus,” or the IMF’s structural

readjustment, will not solve Jordan’s problems. s

above: Jordan’s
refugee camps
accomodate
nearly seven
hundred thousand
registered Syrians
and over two
million Palestinian
refugees.