The Happy Arab News Service

Tuesday, February 22, 2011

A king on a very big powder keg

Jordan can be much more of a powder keg than generally believed. And I am saying this as one who not so long ago wrote a post titled exactly A king on a powder keg. To put it short, to say that the king is sitting on a powder keg may be a serious understatement. That the king was recently threatened with revolt by leaders of major Bedouin tribes, the traditional supporters of the monarchy, has amazed many. The letter addressed to the king by the tribal leaders was referred to by the media as another sign of the freedom revolution spreading through the region. However this particular visit of freedom to Jordan, besides a regular mix of populist social and economic demands, came accompanied by ominous sectarian undertones, the tribal chiefs revealed intense hostility to the king's liberal Palestinian wife.

The royal couple

The reason for this divergence between the king and his traditional tribal supporters lies in the sectarian context of the economic liberalization the king was promoting in Jordan in recent years. A recent article in the National is right on target regarding the sectarian dimension of the economic reform in Jordan.

Don Duncan
Last Updated: Feb 16, 2011

. . .

Figures from a recent census have been kept secret, but most people agree that Jordanians of Palestinian origin now represent a majority and may even number as much as 70 per cent of the country's estimated 6.4 million people. This demographic divide has an economic dimension.

Traditionally, East Bankers have dominated the public sector, while Palestinian Jordanians commanded the private sector. This arrangement worked well until the late 1980s, when a financial crisis brought in the International Monetary Fund, which demanded that the government privatise parts of what was then a very large public sector. Jordan began selling off its profit-making state-owned companies and reducing the workforce in its government ministries.

. . .

Source: Upheavals highlight tension

The king's traditional support base are the East Bankers who are probably already in minority but assured overrepresentation in the political system by various means including gerrymandering of voting districts. The logic of the economic reform, dictated by the IMF and just plain common sense, favors the more urban and educated Palestinians. This is not to say that majority of the Palestinians should be necessarily happy about subsidy cuts for food and fuel. However, the majority of those, who were capable enough to take advantage of the reforms, are Palestinians. On the other hand, the East Bankers were not only left behind, but also have to face massive layoffs in the state sector and privatized companies.

Given that the reforms are primarily benefiting the Palestinians, the king would have probably found it easier to be a king of the Palestinians. However, the king lives in the Middle East, where sectarian cages are nearly impossible to escape. So now the king is stuck with his backward tribal constituency which is in revolt against his economic policies. The king started paddling back hard on economic reforms to placate his Bedouins, but surrendering the economy to the mob is not without consequences.

East Bank Jordanians like Mr Snaid are a key base for the monarchy and the cabinet. They occupy most of the crucial positions in government and the security services and are therefore integral to the maintenance of stability in Jordan.

To stave off an escalation of the protests, the king has responded to their demands. Earlier this month, he fired his cabinet, replaced his pro-privatisation premier, and promised to invest US$125 million in the public sector.

Mr Rahman, the University of Jordan economist, said: "There is a lot of pressure on the government to hire more and more, at least to lessen the tension and to reduce unemployment."

But Jordan is facing a $20 billion debt. The problem for King Abdullah now is that to pay for the reforms he has promised his East Bank constituents, he will most likely have to increase the taxes that have been slashed in recent years to promote private enterprise.

Basically, Jordan stands apart among others Arab countries by the virtue of its sectarian situation. Non sectarian countries have the pain of reforms spread across the population. In Jordan, on the other hand, the reform hurts first of all the monarchy's limited support base. This is not to say that sectarian structure is always an obstacle for economic reforms. For example, in the same Bahrain it's the more urban Sunnis who are benefiting from market economy and not the marginalized Shia majority. No wonder the Sunni king has succeeded to make Bahrain the freest economy in the region. In Jordan, however, the situation is reverse and the king's traditional support base is now up in arms against his free market economic policies.

So by now the king appears unable to proceed with economic liberalization due to the opposition by a key constituency. However, any delay or reversal of the economic reform would have a negative impact on Jordan's economy. In terms of demography, Jordan is no Tunisia and both the population and the workforce are growing strong. The kingdom can't afford absorbing labor surpluses in the state sector for any prolonged period of time. Without a rapid and sustained growth of the private sector, the unemployment can only explode, setting off another round of instability and popular unrest among both Palestinians and East Bankers in a matter of years.

Theoretically, Jordan is packed with oil shale that can be tapped both for producing alternative oil and for extracting conventional oil and gas. In terms of oil shale reserves, Jordan may not be the Saudi Arabia of oil shale, but she can easily become another Kuwait or Qatar. The population is relatively small, future revenues can provide a significant boost to living standards and relieve the strained budget. However, the technology for extracting oil shale is very recent and to the best of my knowledge right now there are no joint ventures which are about to start producing in the next few years. Time, however, is critical.

From the Israeli perspective, Jordan and Egypt are Israel's two most important neighbors. Jordan is probably even more important than Egypt because both Israel and Jordan are challenged by the Palestinian nationalism and engaged in containment policy vs the West Bank. There is an ongoing effort on both sides of the West Bank to confine the Palestinian nationalism to within the West Bank. It's not for nothing that, while Jordan is reportedly stripping thousands of her own Palestinians of citizenship, Israel, according to the Palileaks, was suggesting annexation of Israeli Arabs areas to the Palestinian Authority. Israel's plans in the West Bank are heavily contingent on Jordan keeping control of her side of the border to prevent arms smuggling and infiltration. A hostile Palestinian state in Jordan is likely to complicate plans for any future Israeli withdrawal from the area and leave Israel permanently bogged down in the West Bank.

Israel is understandably rattled by the revolution in Egypt, but Jordan is not safe. In fact, Jordan's future is more uncertain than the future of Egypt and some possible scenarios are so nasty that they can make even a takeover of Egypt by Muslim Brothers pale in comparison.

Back to HappyArabNews

Proclaimed un monstruooo muy monstruoso at 1:09 AM