Jordan stands at a serious crossroads, and its future remains tenuous. The U.S. and Gulf-backed Hashemite kingdom located between Saudi Arabia, Syria, Jordan and Iraq has played a pivotal role in the U.S. vanguard against terrorism. Despite receiving generous financial support from its benefactors, Jordan is beholden to their whims considering the myriad crises currently facing the monarchy.
Aside from increased tensions with citizens over proposed reforms and the expanding refugee population of 1.3 million Syrians, Jordan is stuck in an economic and political vise grip that threatens to extinguish the nation's future. Between growth that has tumbled over the last few years to a mere 1.8 percent in the fourth quarter of 2018 and high structural unemployment of 19 percent, economic momentum is just one of the many shortfalls that could wind up toppling King Abdullah and ending the Hashemite reign.
Dependency that drives foreign influence
Saudi Arabia and the United States are responsible for much of the aid money that keeps the Jordanian leadership structure intact. Unsurprisingly, there are strings attached to their aid, whether in the religious dimension of Saudi Arabian Wahabism or U.S. demands that the Jordanians support the Israeli-Palestinian peace process.
Efforts to broker peace have expanded divisions between Amman and its Gulf neighbors, especially as Saudi Arabia aspires to have a greater role in Islamic affairs in Jerusalem in tandem with its support for the forthcoming Trump peace plan. However, support for a peace plan has angered the Jordanian government as Saudi Arabia arranges rescue financing worth $2.5 billion to assist the struggling Jordanian economy in 2018. Assuredly, Saudi funding has declined over the years, but that does not mean the Jordanian king does not call upon his benefactors when beckoned. The Jordanian economy is reeling from financial obligations that have brought debt-to-GDP close to a staggering 94.23 percent. In 2016, the country accepted a $723 million loan from the International Monetary Fund (IMF) contingent on the kingdom engaging in a number of fiscal reforms to bring down debt levels, while using funds to drive "inclusive growth" and job creation. However, efforts to reduce debt and improve growth via the accompanying austerity measures caused an extreme backlash. The resulting price increases and measures designed to reduce debt sparked a great deal of protest, forcing the resignation of former Prime Minister Hani Mulki in 2018.
A Saudi commitment of $250 million per year over five years to aid the Jordanian government budget alongside similar efforts from Kuwait and the United Arab Emirates (UAE) has done little to assuage Jordanian citizen's animosity toward the Gulf Cooperation Council.
However, when considering that reforms including higher income taxes and the removal of subsidies for key staples, including fuel, bread and electricity, were met with extreme public protest, Jordan has been forced to accept the funds at the expense of foreign policy independence.
That still has not fixed the debt situation or spurred growth, evidenced by the World Bank recently increasing its financing commitment to Jordan by an additional $1.45 billion through a "second equitable growth and job creation development policy loan" or DPL2.
The same is true when evaluating the Jordanian relationship with the United States. The $1 billion plus annual foreign aid check from the U.S. to Jordan is a means of peddling influence, making the U.S. the single-largest foreign aid donor to Jordan.
Support does come with a price tag: Jordanians are to support U.S. initiatives to build lasting peace between Israel and Jordan. These efforts have been met largely with consternation from Jordan, possibly complicating the economic and political outlook for the king. Moreover, U.S. efforts to wind down its Palestinian aid commitments through the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) has increased the kingdom's fury considering it is home to nearly 2 million registered Palestinian refugees.
Additionally, the war being waged in neighboring Syria has done lasting damage to Jordan, creating an influx of refugees and straining the country's finances ever further at a time when the economy can ill afford to feed more mouths.
However, trying to transform this dependency might have more immediate consequences for the king as he allegedly seeks new allies, either in Qatar or Turkey, and possibly makes quiet overtures towards Iran. Although publicly denied, even if communication with Iran is simply media speculation, it is a sign that the king faces real domestic opposition willing to blacken his reputation, even possibly within his inner circle.
Growing political insurrection intensifies struggles
King Abdullah faces a major internal power struggle, forcing him to fight the opposition by predominantly firing those who present challenges and leveling unsubstantiated charges of corruption.
In the last year alone, the cabinet has been replaced three times after the former prime minister was sacked nearly a year ago. Shuffling the cabinet is the latest of many strategies designed expressly to redirect criticism leveled at the government. Much of this criticism is warranted, especially when considering the endemic corruption that sprawls across the kingdom, complicating the king's tenuous rule.
When faced with criticism or challenges to his rule, King Abdullah goes back to his late father's dismissal playbook of accusing rivals of corruption or shuffling cabinet ministers. Yet, instead of firing his opposition and purging adversaries in the government and judiciary, he should instead turn his focus inwards towards fixing ailing infrastructure and building the foundations needed to attract growth, capital and promote jobs in the country. Only through proper economic management and the end of heavily embedded top-down corruption does King Abdullah stand a chance of clinging to power.
The IMF-led efforts will continue to fail unless a real plan and strategy for the economy that does not involve the nation's corrupt elite comes to fruition. Furthermore, foreign aid should be better directed to ensure that the population, and not the inner circle of Jordanian commercial and political elites, is the sole beneficiary of this support.
Instead of begging allies old and new to prop up the government with more funding every year, Abdullah should change tack and focus on the economy.
Though loath to hear the U.S. administration's peace plans despite the accompanying economic incentives for Jordan to participate, it does represent a light at the end of the tunnel for staving off escaping complete financial collapse. Between the acute water crisis and limited funds to restore any modicum of economic prowess or build supportive economic infrastructure, defiant stubbornness will certainly not provide the way out of the kingdom's conundrum. In an age when protests and rallies can quickly challenge the incumbent power structure and reduce it to rubble in a matter of weeks, King Abdullah must act swiftly and abandon the status quo or risk becoming another failed Middle Eastern or North African (MENA) state mired in conflict. While he certainly does not want to cede political and foreign policy independence to Gulf States and the U.S., without addressing the economy in a way that produces demonstrable results for a population that has seen its standard of living only decline, the kingdom's future may prove terminal.
* Middle East analyst based in London, pursuing Ph.D. in Middle Eastern political history
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