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Opinion: The end of an oasis?

Published by The New York Sun on 2005-11-10

Until yesterday's bombings in the capital city of Amman, Jordan enjoyed two years of remarkable economic growth, fuelled mostly by large dollops of foreign investment in tourism and real estate, and rising exports to America and the Islamic world. For a largely poor country that was always pitied by its oil-rich or militarily powerful neighbors, a more prosperous future seemed within grasp.

The deadly attacks by suicide bombers most certainly ended that prospect, at least for now. The bombers targeted three hotels popular with foreigners; of at least 57 dead and more than 300 injured, an overwhelming number were foreign tourists and businessmen. It's all but assured that the upcoming tourist high season will be a bust, and last night several American travel agents were already reporting cancellations.

It will also be surprising if foreign direct investment doesn't dry up. So far this year, Jordan, a country of 5.4 million people, received nearly $7 billion in FDI; in contrast, India, with 1.2 billion people, received barely $4 billion.

Foreign investment was eagerly sought by the ambitious young King Abdullah II, who was legitimately concerned that in the 46 years that his late father, King Hussein, ruled the Hashemite kingdom, political and social tensions kept escalating steadily while domestic poverty deepened. Bereft of the oil resources of neighbors such as Saudi Arabia, or the industrial infrastructure of Egypt and Syria, Jordan had only its phosphates to sell.

Its economy was largely propped up by foreign aid, with America providing $2.3 billion in the last decade. Militarily, too, Jordan relied heavily on America, which last year offered $100 million in weapons. Moreover, Washington also wrote off $700 million in Jordan's external debts.

The American largesse was not entirely altruistic. King Hussein, after all, was long considered a reliable ally; he had undertaken several secret negotiations with Israel, leading to the establishment of formal diplomatic ties between the two countries in 1994. Jordan was - and still is - the second Arab country to recognize Israel; Egypt established ties in 1979. Successive American administrations also warmed up to Jordan because it displayed determination in undertaking economic reforms.

But Hussein - who died in 1999 of cancer - was not completely focused on the economy. His supporters say that was because he was too busy trying to create a lasting peace with Israel, placate his Arab fellow leaders - and thwart countless assassination plots. His detractors have a less benign view: the king, they say, was too much of a sybarite and popinjay to concern himself with the cumbersome details of economic management.

His son, however, worried about Jordan's deteriorating economy. King Abdullah accelerated free-market policies, trimmed the traditionally large bureaucracy, and focused on economic reforms. American appreciation translated into more trade: Mainly on account of the 40 so-called "Qualifying Industrial Zones" on the Jordan-Israel border where clothes, jewelry and luggage are manufactured, Jordan's exports to America rose from $16 million in 1998 to nearly $450 million in 2004. Jordan, which signed a Free Trade Agreement with America in 2000, became the Arab world's biggest manufacturing exporter to America by last year, expanding its sales to include soap, cosmetics, goat cheese, air conditioners, and intricate gold necklaces created by the artisans of Amman.

"But we were lulled by this progress," an influential Jordanian analyst, Salameh Abdul-Hadi, told The New York Sun from Amman yesterday. "Especially after the Iraq war, we failed to track the dangers in our own backyard."

His reference was to more than 500,000 Iraqi refugees who have reportedly settled in Jordan. Mr. Abdul-Hadi, who frequently counsels palace officials, said that many of these Iraqis have been buying vast chunks of real estate and also reportedly supporting groups who could be to be hostile to America and the monarchy.

"Do we really know whose money they are spending?" Mr. Abdul-Hadi said. "Do we really know whether these Iraqis sympathize with, or even represent, the insurgents in Iraq? How can we keep tight surveillance across our vast borders with Iraq, where Iran is reportedly supplying arms and money - some of which will inevitably enter Jordan."

He recalled that despite Jordan's political closeness to America, it has long offered sanctuary to radical Arabs and militant Islamists. In the late 1960s and early 1970s, for example, Yasser Arafat's Fatah faction of the Palestine Liberation Organization very nearly toppled King Hussein. The PLO was driven out by troops loyal to the king, but nearly 60% of Jordan's population is Palestinian.

Jordan also hosted the Muslim Brotherhood, whose offices in Amman regularly churned out anti-Israel and anti-Semitic propaganda. Some intelligence agencies in the West believe that many of the rebels who've tried to overthrow the Saudi monarchy were trained in Jordan's vast barren areas that are contiguous to the oil-rich kingdom.

Mr. Abdul-Hadi also suggested yesterday that Iran's role in fomenting disturbances in the region has yet to be fully examined. Although Jordanians are heavily Sunni Muslims and Iranians are mostly Shias, militarily Iran has become the region's dominant nation mainly because of the collapse of law and order in Iraq, he said.

"For many years we Jordanians considered our country an oasis of stability in a region of political turbulence," Mr. Abdul-Hadi said. "And people were envious of us. There was jealousy about our economic progress - from Morocco to Tehran. There was resentment over our good relations with America and Israel. It all had to blow up some day. It was simply a question of when."

The answer to that question came yesterday.

Pranay Gupte,
Senior Writer and Global-Affairs Columnist

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