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Jordan Pays the Price for Egypt's Troubles

Abdullah

Jordan has already been hammered by the Syrian civil war. Refugees are pouring into the country. Spies, arms dealers, terrorists and shady characters of every kind are trying to move money, goods and information through the fragile Kingdom. Trade relations with an important neighbor have been crushed by Syria’s economic collapse. Other countries including the United States see Jordan as a staging area for their own interventions in Syria, further complicating Jordanian politics and exposing it to the wrath of Assad, Hezbollah and Iran.

As if that weren’t enough, political turmoil in Egypt is proving costly for Jordan. The instability and strife has cut Jordan off from one of its main suppliers of natural gas, putting pressure on Jordanian power companies. In response, the government has been providing subsidies to make up for the loss and keep electricity prices relatively low. But the country is also running a large deficit, and is planning to cut its losses by discontinuing subsidies at the end of Ramadan. When this happens, electricity prices are expected to rise by 15 percent. The Financial Times reports:

“Economic growth in Jordan has halved from more than 6 per cent to about 3 per cent over the past three years because of the global economic slowdown and political tumult in its region. The country also hosts more than half a million Syrian refugees.

One economist said the planned electricity price increase would be likely to cause broader inflation. ‘Fuel goes into the price of everything, so everything will rise,’ says Yusuf Mansour, chief executive of Enconsult, an Amman-based economic consultancy.

The timing of the price rises is being watched closely within the pro-western monarchy and by its foreign allies because of fears for its stability as the Middle East copes with war in Syria and escalating conflict in Egypt.”

Jordan is a much more complicated place than most people realize—perhaps even more than the White House realizes. While the President and his Secretary of State wring their hands about Syria, Jordan’s economy is under growing pressure from the influx of refugees, and it has only received 1/7 of its requested international aid. Jordan has deep, almost clan like structures in the East Bank that were typically the backbone of the monarchy’s support. Now, however, even East Bankers are becoming disenchanted with King Abdallah II, participating in protests against the monarchy.

Serious unrest in Jordan would be bad for American interests in the region. While the country has no oil, it is a double buffer zone, between Israel and its enemies as well as between Syria, Saudia Arabia and Iraq. Jordan is also an important Western ally. The main contenders for power in Jordan are Islamists—the Islamist Action Front, a party that has grown in capacity and popularity since its days in the government, but is an unlikely partner for the US. Helping Jordan manage the huge stress now affecting it is an important US and western interest; let’s hope that King Hussein’s increasingly urgent telephone calls reach the right ears.

[King Abdullah of Jordan photo courtesy of Wikimedia Commons]

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  • Nick M.

    This saddens me because unlike other ME rulers, King Abdallah II has been trying to slowly liberalize and westernize Jordan. They still have issues but in the ME have been by far the most tolerant. A while back I read an interview where Abdallah basically states that he doesn’t want his son to rule and hopes to have a more working and non-corrupt parliament system in place by the time he abdicates the throne.

  • USNK2

    Jordan does have shale oil deposits, which I assume they would love to develop.
    I guess I am the only reader here at TAI who sees that most of what Sec Kerry has been doing is in support of Jordan, including Kerry’s ‘obsession’ with getting the West Bank palestinians to talk to the Israelis.

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