on the jordanian economy - GLORIA Center

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The Triumph of the Old Middle Eastthose countries’ losses were less than Jordan’s,they received more and better credits. Jordanobtained only $1 billion dollars from Japan andthe European Union.(19)Furthermore, before the crisis Arab andInternational financial support was vital forJordan's economy. Before the Gulf War Jordanwas receiving almost $600 million a year fromthe wealthy Gulf States alone. As a result ofthe Jordanian support of Iraq during the war,those countries cut off their support andEuropean and other countries such as the U.S.and Japan took the same steps (a situation notreversed until Jordan became involved in thepeace process with Israel, most especially afterthe Wye River Agreement). In addition, Iraqand Kuwait themselves had previously been thesource of 30 percent of the total financial aidreceived by Jordan.(20)Jordanian exports to Arab and othercountries also declined. Kuwait and SaudiArabia prohibited the import of Jordanianproducts because of Jordan’s political positionduring the war. Jordanian agriculture, industryand trade sectors were thus shut out of the mostimportant Gulf markets. The transportationsector was paralyzed as a result of the tradesanctions and the decline in exports andimports.(21)Finally, the tourism sector was harshlyaffected by the Gulf War. Having taken nearlya decade to recover from the loss of theimportant tourist sites of Jerusalem andBethlehem in 1967, by 1990, the industry inJordan had reached all-time highs, with almost2.6 million tourists entering in that year alone(most of whom were Arab). Utilizing its siteslike Jerash and Petra to their fullest, tourismhad even outperformed phosphates (Jordan’sleading export) in net receipts. However, by1991, this number dropped by almost 25percent to 2 million visitors.(22)RETURN OF JORDANIANSThere were many groups of people whopassed through or returned to Jordan due to theGulf War. These people can be classified intofive categories: first, Jordanians who carryJordanian passports and have Jordan as theironly home and who consequently returned toJordan. Second, Jordan had to host Palestinianswho carried identification papers issued byother Arab countries that then refused toreceive them. Third, Palestinians from theWest Bank, who had Jordanian passports, wereforced to stay for a long period in Jordan untilIsrael allowed them to go back to the WestBank. Fourth, over 30,000 Iraqi refugees whoescaped Iraq eventually settled in Jordan.Finally, as many as one million refugees duringthe last five of months of 1990, according toPrime Minister Badran.(23)Jordan was one of the largest providers ofwhite-collar employees to the Gulf countries.Jordanians living in the Gulf countries beforethe crisis exceeded one million (20 percent ofJordan's total population) distributed amongBahrain, Iraq, Kuwait, Oman, Qatar, SaudiArabia and United Arab Emirates. TheseJordanians living abroad also became the mainsupplier of foreign currency to Jordan, whichofficial statistics estimated at over $1.2 billionannually in the mid-1980s (unofficial estimatesran as high as $3 billion). Jordanians in Kuwaitand Iraq alone accounted for almost 40 percentof the total Jordanian expatriate transfers, asthese two countries hosted over half a millionJordanians.However, as a result of the war, theseremittances decreased to $460 million (theofficial statistic) in 1991. It was estimated thatJordan had lost $122 million in 1990 and $318million in 1991 due to the decrease in theemployee transfers.(24) In addition, it wasestimated that Jordanian expatriates lost $1.4billion of their deposits in Kuwait and $1.5billion of their belongings. Making mattersworse, after the Gulf War, former Jordaniansworking outside Jordan, previously a source ofnational income, suddenly became a majorburden inside Jordan.Jordanians started to migrate to Kuwait inthe 1950s, and the total number of Jordaniansworking in Kuwait before the Iraqi invasionwas almost 400,000. Jordanian labor helped inbuilding modern Kuwait, with JordanianMiddle East Review of International Affairs, Vol. 6, No. 2 (June 2002) 73
Barry Rubinemployees working in many governmentdepartments such as education, health care,military, as well as in the private sector. TheJordanian media reported that Jordanians weretreated as second-class citizens, even thoughmost of them had lived many years there andmany were even born and raised in Kuwait.Before the Iraqi invasion many articlesrequesting the government to deport Jordaniansappeared in Kuwaiti newspapers, and theslogan "Kuwait is for Kuwaitis" becamewidespread. Jordanians were unable to buyprivate houses or operate their own businessesin Kuwait. Following the liberation, Kuwaitstarted a comprehensive campaign to deportJordanians out of Kuwait and an estimated330,000 Jordanians returned to Jordan after theIraqi troops were expelled from Kuwait by theUS-led UN coalition.(25) Many otherJordanians, under indirect pressure andchanging economic conditions, returned fromother Gulf countries such as Bahrain, Oman,Qatar, Saudi Arabia, and United Arab Emirates.The return of 330,000 Jordanians from theGulf area, in addition to one million refugeeswho passed through Jordan, had many seriousnegative effects on Jordan. Jordanianunemployment rate soared from 20 percent to30 percent.(26) White-collar employees werethe main victims since Jordan was one of themajor exporters of white-collar employees tothe Gulf area. The situation worsened after thereturn of Jordanians from Kuwait and Iraq, asituation which continued until Jordan createdmore jobs and found vacancies abroad for thelarge number of unemployed.Returnees increased the pressure on thelimited natural resources (e.g., water and food)and on the Jordanian public utilities (e.g.,education facilities, housing, and health careunits). The return of the large number ofJordanians in a short period increased thenumber of Jordanians who lived under thepoverty level up to one-third of the population.Before the Gulf crisis the total number ofJordanians who were living under poverty was600,000--almost 20 percent of the population.A study of 500 Jordanian families revealed thatJordan stepped down from a middle-incomecountry to a low-income country.(27)Salamah Hammad, writing in Sawt al-Sha'b,reported that over 1,625,000 persons hadentered Jordan between August and December1990, out of whom 885,000 continued their tripto their home countries (e.g., India, Pakistan,Philippines, Thailand, and Egypt). Thisnumber equals 23 percent of Jordan’spopulation and would be equivalent to 13million people passing through England. Inorder to help these refugees, the JordanianGovernment spent over $60 million of itsbudget, though the UN eventually reimbursedonly $12 million of that amount. Thousands ofPalestinians also stayed in Jordan because theother Arab countries that issued their papersrefused to receive them. Additionally, manyother nationalities like Somalis, Liberians, andEritreans stayed in Jordan for longer periodsuntil they could find another country that wouldaccept them.(28)Jordanian authorities did not charge therefugees or international airlines taking therefugees home any of the fees normally paid bytravelers. It also gave up the privileges of thenational Jordanian Airline Company (RoyalJordanian) and cancelled many of its flights toallow other airline companies to carry therefugees.(29)CONCLUSIONSThus, the damage of the Gulf War onJordan’s economy was multi-faceted andextensive. Jordan's economy was highlydependent on other Arab countries in severalways, and especially on Iraq. Aside from itsheavy dependence on trade, Jordan also servedas a major thoroughfare for Iraqi imports andexports and had previously prospered on thetransport of goods from the port of Aqaba toIraq. Jordan was also heavily dependent onArab financial aid, subsidized Iraqi oil, andremittances from expatriate Jordanians workingin the Gulf, and to a lesser extent, oninternational tourism—all of which came to anabrupt halt beginning with the Iraqi invasion ofKuwait.74Middle East Review of International Affairs, Vol. 6, No. 2 (June 2002)
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