10 March 2011

Demonstrators took to the streets in January to complain about high unemployment and rising food prices. Protests continue, with thousands taking part in a demonstration in Amman in early March calling for political reform.

Government actions:

• Public sector employees and servicemen have been granted a JD20 ($29) a month salary increase
• On 31 January, King Abdullah replaced his government
• A 6 per cent sales tax on kerosene and diesel has been removed and the tax on unleaded fuel has been reduced from 18 per cent to 12 per cent
• Gas cylinders will continue to be subsidised at a cost of JD100m

Political Risk assessment

Protests have failed to gain the scale and momentum seen elsewhere in the region and King Abdullah is popular, but may have to concede more ground.

23 February 2011

Although King Abdullah’s military-tribal networks among ‘East Bankers’ (Jordanians of non-Palestinian origin) are strong and provide for a bulwark of support against the urban Palestinian-origin Jordanians, who have pressured the Hashemite monarchy, he has few economic levers to pull to lighten the load on his impoverished subjects.

King Abdullah’s swift response to the Tunisian and Egyptian events, sacking his government and appointing a new prime minister Marouf Bakhit, suggests an alertness to the dangers facing his regime. However, Bakhit’s appointment has failed to convince many of the new commitment to reform. He previously served as prime minister and showed little inclination to advance an agenda of political and economic change. The Muslim Brotherhood’s growing boldness in pushing for the restoration of Jordan’s constitutional monarchy could trigger wider political conflict. Pressure to change the electoral system and reduce the powers of the king could prove unpopular with the East Bank constituency. If the king is forced to resort to loyalist tribal networks to suppress dissent, violence along the lines of the 1970 Black September clashes – pitting royal forces against Palestinians – could resurface.