Amid violent clashes in Syria and continued unrest in Egypt, Jordan, which borders Syria and faces Egypt across the Gulf of Aqaba, has managed to remain relatively calm in 2011. There have been regular demonstrations in the country throughout the year, but they have been mostly peaceful and calls for regime change have been all but absent.

Government figures … have to strike balances on reform between different interest groups

Elliot Hentov, Standard & Poor’s

Maintaining that level of stability in the midst of such regional turmoil has been a challenge for the authorities. To date, people have been allowed to protest against the government in the presence of generally benign security forces and, occasionally, the regime has met some of their demands. Subsidies have been increased on a range of basic goods and government ministers have been forced to resign.

Whether the political strategy the regime has adopted will continue to work as well in the future remains an open question, however.

“Pressure is building and it will continue to build unless the government is able to find ways to make meaningful reforms that address some of the demands,” says Elliot Hentov, a credit analyst at US ratings agency Standard & Poor’s.

Deflecting blame

Since ascending to the throne in early 1999, King Abdullah II has managed to stay above the fray by deflecting blame for the lack of political reforms on successive prime ministers. He has appointed nine so far, but on average their governments have lasted less than 18 months, often collapsing in response to public protests over the lack of reforms. In 2011 alone, there have been three prime ministers; Samir Rifai made way for Marouf Bakhit in February, who was replaced by Awn Khasawneh in October.

Jordanians are aware of where things could head if events got out of hand, so there’s a higher degree of patience

Elliot Hentov, Standard & Poor’s

This year, there have at least been some amendments to the constitution, although the changes were not particularly far reaching. Among them was a decision to set up a constitutional court as well as an independent commission to supervise elections.

Khasawneh, a former judge at the International Court of Justice in The Hague, will have to push the laws codifying these changes through parliament. The record of other prime ministers over recent years suggests that the prospects for more substantial changes are not particularly bright.

His immediate predecessor is a case in point. Bakhit was appointed in February in the wake of several weeks of protests and, at the time, there was a fresh momentum for reform. In his formal letter of designation from the king, he was tasked with taking “practical, swift and tangible steps to launch genuine political reform” and there were hopes he could achieve that.

“There are grounds for optimism,” said one political analyst in Amman at the time. “But what will determine the success or failure of this experiment is going to be what concrete fundamental political reform steps are being taken in the next months.”

Ultimately, not enough progress on reforms was made to keep protesters off the streets. The credibility of the government was further undermined when Bakhit was linked to a scandal over the contract to build a casino near the Dead Sea and by the resignations in May of Justice Minister Hussein Megalli and Health Minister Yassin Hosban. The two ministers stepped down after a businessman convicted of bribery and corruption, Khalid Shahin, was allowed to leave the country for medical care in the US, but was later reported to have been seen in a London restaurant. In the end, Bakhit resigned like so many before him.

“The Bakhit government ended up in an atmosphere when it left that was worse than when it came in,” says the political analyst.

Cautious optimism

Now, with a new prime minister in place, there are the familiar calls for meaningful reforms coupled with a mood of cautious optimism. In his letter of 17 October appointing Khasawneh, King Abdullah laid out a series of key issues that he expected his new prime minister to deal with. Among them were the passing of laws on elections and political parties, in addition to the establishment of the new election commission.

“The primary mission of this government is to implement a political reform process with clear milestones,” the king said in his letter.

The government is due to bring the laws on political parties, elections and the constitutional court to the lower house of parliament, the Chamber of Deputies, during the opening three months of 2012. While he may be serious about bringing in such reforms, Khasawneh is faced with the same political environment that has caused so many of his predecessors to fail.

Alongside a general appetite for reforms, there are also deep fissures in Jordan between the more numerous Palestinians and the more politically powerful East Bankers, and also between regime insiders with power and privilege and those left on the outside. Nonetheless, some feel that Khasawneh is better placed than most to succeed.

Obstacles to reform in Jordan

“The appointment of this prime minster and government is qualitatively different from the last one or two reshuffles, at least with its efforts to implement reform,” says Hentov. “The prime minister has very technocratic credentials. The sincerity to actually pursue reforms is greater than in the previous government. But there are structural political obstacles to reform. Government figures, from the king downwards, have to strike balances on reform between different interest groups. I think it is unclear how well they can navigate that.”

For his part, Khasawneh appears to be trying to keep expectations in check. In a policy statement to the chamber on 23 November, he said: “The government does not claim it is a salvation government, but rather one with a reform approach and it believes that there is a genuine opportunity for reforms.”

Just as important as the political changes is how he deals with the economic situation. With unemployment at more than 13 per cent, persistent budget and trade deficits, and few natural resources, Jordan’s economy is in a difficult position. Its reliance on imported energy is a critical weakness, given the high oil prices this year and the regular blowing up of the gas pipeline from Egypt.

The 2011 Arab uprisings have also caused tourist numbers to fall, alongside lower demand for real estate from overseas buyers. All this has prompted Amman to try to ease the pain for its citizens by, among other things, raising the subsidies on wheat, barley and fuel. In all, these measures have cost about 5 per cent of gross domestic product (GDP), according to Washington-headquartered World Bank estimates.

However, corruption is still widely seen as a major problem despite repeated promises to tackle it, and the economy is not growing fast enough to provide jobs and boost the standard of living of ordinary Jordanians.

According to the World Bank, the country’s GDP is expected to grow by 2.5 per cent this year, in line with other oil-importing countries in the region, but significantly below the 4.1 per cent for the region as a whole. Per capita GDP stands at just $3,341, according to UK bank HSBC Group.

On 23 November, Standard & Poor’s cut its long-term, local-currency sovereign rating for the country from BB+ to BB, citing the political and economic challenges Amman is facing.

Jordan at least knows that it can rely on help from abroad. The US continues to be a generous donor to the country, giving more than $800m a year, and other Arab states have also shown themselves willing and able to offer financial assistance. Saudi Arabia, for example, has given $1.4bn to Jordan this year alone. Indeed, the entire GCC has a vested interest in protecting a friendly monarchy in the region and has been boosting economic and political ties with Amman.

The longer-term health of the country requires something more substantive, but such aid will certainly help Jordan to come through this current tough period, in economic terms at least. Whether the regime emerges politically weaker is still in the balance, but there are some reasons why it may well avoid the fate of others in the neighbourhood.

“Historically, the level of popular legitimacy of the monarchy has been higher than in many neighbouring countries, the rule of law better implemented and the level of corruption lower,” says Hentov.

“In relative terms, that is still true today. Jordanians are very much aware of where things could head if events got out of hand, so there’s a higher degree of patience and more appetite for more incremental and gradual change. They’ve seen in the case of Egypt that transitions can be very unpredictable.”

Khasawneh has been given some time to prove himself by key opposition groups, including the National Reform Front, set up by former prime minister Ahmad Obeidat earlier this year, and the Muslim Brotherhood, the best organised opposition movement in the country. He has also been helped by the postponement of municipal elections, which had been scheduled for 27 December and have now been moved to July next year.

Honeymoon period

But the honeymoon period will not last forever and Jordanians will want to see some real progress. If that is not forthcoming, more protests are likely and, if that happens, King Abdullah is likely to reach for his tried and trusted prescription and replace him with another prime minister. That loses some of its impact each time it is used and whether the public will continue to be satisfied with the stilted pace of reforms remains to be seen.

For now, there seems little appetite for more fundamental change to the regime itself. “There are always those who oppose, who believe in a different system,” says the political analyst. “Republicans exist. You don’t bump into them often, I only know of one or two. They’ve always been there. The number is not all that great, but they’re there.”

The risk for King Abdullah II is that their numbers could swell in the future, unless meaningful progress is made.