Putting Amman on the map

10 September 2004
The visit of Jordan's King Abdullah II to Moscow on 2-3 September raised little public interest in Russia, eclipsed as it was by the disastrous siege of school number 1 in Beslan, North Ossetia. Given the tragedy that unfolded, and the importance now being placed on the Kremlin's response, the visit is unlikely to be registered anywhere other than the Royal Court archives.

However, from Jordan's point of view, the appearance of the king in Moscow was significant. During talks with President Putin, the Hashemite monarch pushed for a free trade agreement between their two countries, similar to those Jordan already has with the EU, the US and many Arab states. Such agreements are fundamental to Amman's economic masterplan, which aims to turn the kingdom into a hub for regional trade.

Jordan is a poor country, dependent on foreign investment and aid for its economic development. With few significant natural resources, what the kingdom has to sell is its workforce, its location, political stability and a relatively liberal economic environment. But even these assets cannot be taken for granted. Anywhere between 50 per cent and 67 per cent of the country's inhabitants are Palestinians - many of them Jordanian passport holders but, theoretically, temporary citizens. Jordan's location, sandwiched between Israel and Iraq, has meant that throughout its 84-year history it has had little control over many of the events that have shaped its existence. And for all its economic potential, the country is still swamped by debt - amounting to about $9,520 million, or about 90 per cent of gross domestic product (GDP), at the end of July.

Despite all these obstacles, and a potentially disastrous year in 2003 that saw its two biggest trading partners - the US and Iraq - go to war with each other, Jordan is thriving. In the first three months of 2004 GDP growth reached 6.9 per cent, according to the Finance Ministry. Strict adherence to the terms of an economic restructuring programme agreed with the IMF in 1989 has turned the country into the fund's darling. As it reaches the conclusion of its 15-year IMF plan, Jordan's debt continues to fall. Since the end of 2003, national debt as a percentage of GDP has fallen by 12 per cent, according to the Finance Ministry.

The kingdom punches well above its weight on the diplomatic circuit, partly thanks to the king's international visits but also due to Amman's hereditary role as one of the region's foremost political brokers. For several decades, Jordan has had privileged access to the corridors of power in Washington, and the US/UK-educated ruler believes that he and his country have an important role to play as a bridge between the Arab world and the West at a time when understanding and trust between the two cultures is at an all-time low.

King Abdullah has become an important figure in the US' war on terrorism and is a regular visitor to the White House. It is a difficult path to tread. Critics argue that the king is being used as a fig leaf by the US administration to justify imperialist and anti-Islamic policies. Amman's security apparatus is permanently primed to deal with the threats of homegrown insurgency and political and religious extremists. But there is little doubt that Jordan draws considerable benefits from the arrangement.

The 1994 peace treaty with Israel soured relations with many of the kingdom's Arab neighbours, most of whom still do not officially recognise the Jewish state. But the deal guarantees Jordan $250 million a year in military and economic aid from the US. In addition, there have been occasional fillips such as the $700 million-worth of emergency funds approved by Congress in 2003 to offset the loss of subsidised oil imports from Iraq.

While the invasion of Iraq and its immediate aftermath slowed the growth of the economy to about 3.3 per cent in 2003, far below the budgete

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