Opinion |

King Abdullah Survives This Coup, but His Troubles Are Far From Over

Time is running out for Jordan's economy amid a changing Middle East

David Rosenberg
David Rosenberg
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Jordanian street vendor reads a local newspaper with a headline on its front page about the latest events in his country, in the capital Amman, on April 4, 2021
Jordanian street vendor reads a local newspaper with a headline on its front page about the latest events in his country, Amman, April 4, 2021Credit: KHALIL MAZRAAWI - AFP
David Rosenberg
David Rosenberg

We know very little about the arrests and other measures being taken by the Jordanian government following the abortive palace coup involving a few-score officials, reportedly including King Abdullah’s half-brother Hamzah bin Hussein.

A new Arab Spring it was not, but that day may yet come. The country has long muddled through economically and politically – never a terrible failure nor a glorious success – a glass that could be seen as either half empty or half full.

The half-empty view has been the dominant one. Small and bereft of natural resources, Jordan hasn’t been able to survive economically without substantial aid from the Gulf and the West. It never found the formula for becoming a competitive economy, leaving Jordanians suffering chronically high levels of poverty and unemployment.

King Abdullah, and his father before him, have worn their autocracy light, but Jordan doesn’t come close to being free and democratic. The Economist Intelligence Unit still regards it as an authoritarian regime on par with Iraq and Algeria. There isn’t a practical way for ordinary Jordanians to express their grievances or effect change.

But the half-full view shouldn’t be dismissed out of hand. Abdullah and Hussein managed to keep their kingdom stable through upheavals, such as Black September and the Arab Spring, that would have undone less capable rulers. They have deftly played Jordan’s role as a strategic linchpin to win subsidies, including $1.4 billion from the United States last year, plus hundreds of millions more in refugee aid.

The last several years have been particularly difficult for Jordan, but Abdullah has so far muddled through in the best Hashemite tradition. The Arab Spring left Jordan taking care of some 750,000 refugees, most of them from neighboring Syria. All told, non-citizens in Jordan account for nearly half the population. Most of them are integrated into the economy, but as expats, they can’t counted on to be as supportive of the regime as citizens are when times are tough.

Meanwhile, the Jordanian economy has been growing too slowly to create enough jobs and reduce poverty. From an average growth rate of 5.1% annually in 2000-2015, the rate slackened to 2% in each of the three years before the pandemic. Mistrust in the government and disgust over corruption were growing, according to the Arab Barometer survey.

The coronavirus crisis stage

All in all, Jordan has been living close to the edge, and the coronavirus pushed it a little closer. The country on the whole has done a decent job at rolling with the COVID punches, but it is battered and bruised.

The government imposed draconian measures last spring to contain the pandemic but, like other governments, it eventually let loose the strings and new cases surged in the fall and again in the spring. per capita rates of covid cases and deaths are relatively high for the region (bearing in mind that a lot of countries don’t report accurately, if any, statistics). Jordan has been slow to get its vaccination program up and running, and only about 2% of the population has been inoculated.

The economy has, remarkably, weathered all this relatively well, especially when you consider that nearly a fifth of gross domestic product derives from tourism and another 12% from expat Jordanians sending wages back home. The International Monetary Fund estimates that GDP contracted a mere 3% in 2020 thanks to government measures to keep the economy afloat.

Jordan’s problem is that it still isn’t past the coronavirus crisis stage. New cases are still close to record heights and a vaccination fix is a long way off. The government has taken on a lot of debt to keep COVID at bay and its own forecast is for debt to swell to 112% of GDP.

Nor will Jordan likely be bouncing back from last year’s recession anytime soon: The IMF estimates it will grow 2.5% this year; the World Bank, by just 1.4%.

Jordan’s problem is that even when the pandemic really does wind down, at best the economy will simply return to the same lackluster performance of previous years, and that’s not sustainable in the long term. Jordan has dangerously high rates of unemployment, especially among young people, and needs to spur the pace of growth to create jobs for them.

Worse, the political environment is becoming more challenging because of the Abraham Accords. Jordan remains an important strategic partner for Israel and the U.S., but, like Egypt, it is becoming less important than now that Israel has newer, more influential friends in the Gulf. That may make it harder in the future for Abdullah to get the U.S. and Gulf to fork over aid.

Going forward, Abdullah faces immense economic challenges and no easy solution. But if there is one, it lies in copying the Dubai model as best it can by turning itself into a center for logistics, tourism and high-tech by welcoming outsiders. It’s not a perfect fit, but Jordan does have a stable and well-run government, proximity to the Israeli economy and to Europe, and a decent level of human capital. You can see the day where, if Jordan’s cup doesn’t quite runneth over, it would be a lot more than half full.

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