By  Suzanne Baroud

Freelance Writer — Seattle

Most “economic reform experts” would argue that quicker reforms hardly mean quicker positive outcomes. Russia is often cited as a country that merged with the world markets almost overnight. The results were devastating. China, on the other hand, chose a much more relaxed pattern of whipping its economy into shape. Steadily but surely, the Chinese economy is making itself a visible competitor, not only in the Asian market, but in the world’s markets in general. So, is their any convincing explanation that permits a sudden jump into the world’s economy without the so-called phase-in period, that allows developing countries to become relatively acquainted with the “fitting in” procedure? In the case of Jordan, the answer remains unknown.Although the official rate of unemployment is estimated by governmental statistics at 12 percent, independent estimates put it at 27 percent. Aside from statistics, the Jordanian economy suffered its hardest hits yet as a result of the Gulf War. Ten years after the end of the war, the Jordanian economy is nowhere near recovery.

No bombs fell on Jordan nor were sanctions imposed, but there is little doubt that the fate of the Iraqi economy shadowed Jordan in the past years, and likely for years to come. Hundreds of thousands of Jordanian workers in Iraq and the Gulf states were either sent home or chose to return to Jordan fearing for their safety. Large sums of bank transfers into Jordanian banks made by those workers thereafter ceased. Even though most of those returnees acquired relatively large fortunes which were accumulated through years of hard work, neither the government nor the economy was ready or even had the capacity to use the incoming capital wisely. The results were predictable; the money was spent on consumer oriented ventures, where the life span of the circulated money was short lived.

Unlike the usual economic depressions created by wars, the Gulf War depression was prolonged by very tight and uncompromising sanctions. The effects of these sanctions on the Iraqi economy needs no elaboration. For Jordan, the negative effects were indirect, but devastating as well. Jordan lost its closest trade partner, Iraq, in addition to the significant loss of revenue generated by Jordan as a lively “Iraqi port” on the Red Sea.

It took little time for Jordan to realize that its alliance with Iraq was no longer a sound strategy, either politically or economically speaking. Based on the above understanding, Jordan altered its policy toward Iraq, Israel, the United States and the Gulf states. Years after King Hussein’s attempt to fix Jordan’s image in the eyes of its former enemies, and King Abdullah II’s continuation of his late father’s legacy, Jordan is finally getting signs of assurances that its efforts are paying off.

As of April 11 this year, Jordan was admitted as a full member in the World Trade Organization (WTO). Six years after its application to the GATT, and its attempt to convince its predecessor WTO, Jordan became the 136th member of the controversial yet expanding economic body. WTO members who welcomed Jordan’s membership, commended the latter on implementing its pledges to open the markets for goods and services without the phase-in period which is usually a necessity for other admitted developing country members.

Jordan’s speedy ventures of opening up the economy, aimed at impressing foreign investors and acquiring their trust was also combined with the initiating of a special economic zone, in the Red Sea port of Aqba, and the expected construction of a joint industrial zone with Israel, on both sides of the Jordan valley. The Jordan-Israel industrial zone, and the warm relations between both countries, and King Abdullah’s II visit to Israel present a strikingly different role for Jordan. These issues also demonstrate the magnitude of economic policy transformation taking place in Jordan nowadays.

Despite the moral implications of its closeness to Israel, or the ethical dilemma of participating in the WTO (which has become a worldwide controversy after the Seattle Riots), one must understand that desperate times call for desperate measures. But was Jordan desperate enough to gamble on the remaining stability of its economy through its speedy entry into the world market, especially when there is little proof that other countries, with similar capacity and economic conditions have succeeded to survive such change? And even if Jordan is indeed desperate enough to participate in such a risky venture , is there a backup plan if its world market policy fails? Jordanian officials are likely to argue the existence of plan b and c, if failure occurs, but time, unemployment estimates, and per capita income will be the main factors in determining the level of success and failure. Jordan is certainly a special case. Its location, limited natural resources, proximity to Iraq and its 1994 peace agreement with Israel place it in a very sensitive and demanding position. It is realizing that remaining a relatively neutral and compromising force is no longer possible. A firm stand must be taken. Whether the right stand is the one being implemented at the moment, is debatable. Yet time, statistics and political stability will always provide indisputable answers.


Suzanne Baroud is an American writer and editor of several books. She is the managing editor of PalestineChronicle.com, and a regular contributor to IslamOnline.net.