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1. A Roadmap for Investment Promotion and Export Diversification: The Case for Jordan

Author:
Ricardo Hausmann, Patricio Goldstein, Ana Grisanti, Tim O'Brien, Jorge Tapia, and Miguel Ajgel Santos
Publication Date:
12-2019
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
Jordan faces a number of pressing economic challenges: low growth, high unemployment, rising debt levels, and continued vulnerability to regional shocks. After a decade of fast economic growth, the economy decelerated with the Global Financial Crisis of 2008-09. From then onwards, various external shocks have thrown its economy out of balance and prolonged the slowdown for over a decade now. Conflicts in neighboring countries have led to reduced demand from key export markets and cut off important trade routes. Foreign direct investment, which averaged 12.7% of gross domestic product (GDP) between 2003-2009, fell to 5.1% of GDP over the 2010-2017. Regional conflicts have interrupted the supply of gas from Egypt – forcing Jordan to import oil at a time of record prices, had a negative impact on tourism, and also provoked a massive influx of migrants and refugees. Failure to cope with 50.4% population growth between led to nine consecutive years (2008-2017) of negative growth rates in GDP per capita, resulting in a cumulative loss of 14.0% over the past decade (2009-2018). Debt to GDP ratios, which were at 55% by the end of 2009, have skyrocketed to 94%. Over the previous five years Jordan has undertaken a significant process of fiscal consolidation. The resulting reduction in fiscal impulse is among the largest registered in the aftermath of the Financial Crises, third only to Greece and Jamaica, and above Portugal and Spain. Higher taxes, lower subsidies, and sharp reductions in public investment have in turn furthered the recession. Within a context of lower aggregate demand, more consolidation is needed to bring debt-to-GDP ratios back to normal. The only way to break that vicious cycle and restart inclusive growth is by leveraging on foreign markets, developing new exports and attracting investments aimed at increasing competitiveness and strengthening the external sector. The theory of economic complexity provides a solid base to identify opportunities with high potential for export diversification. It allows to identify the existing set of knowhow, skills and capacities as signaled by the products and services that Jordan is able to make, and to define existing and latent areas of comparative advantage that can be developed by redeploying them. Service sectors have been growing in importance within the Jordanian economy and will surely play an important role in export diversification. In order to account for that, we have developed an adjusted framework that allows to identify the most attractive export sectors including services. Based on that adjusted framework, this report identifies export themes with a high potential to drive growth in Jordan while supporting increasing wage levels and delivering positive spillovers to the non-tradable economy. The general goal is to provide a roadmap with key elements of a strategy for Jordan to return to a high economic growth path that is consistent with its emerging comparative advantages.
Topic:
Government, International Trade and Finance, Finance, and Economy
Political Geography:
Middle East and Jordan

2. A Decade of Struggling Reform Efforts in Jordan: The Resilience of the Rentier System

Author:
Marwan Muasher
Publication Date:
05-2011
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
The protests that spread throughout the Middle East in the spring of 2011 are calling greater attention to reform in the region. King Abdullah II has attempted to launch a number of political reform initiatives in Jordan since coming to the throne in 1999. But all efforts to open up the political system have been thwarted by a resilient class of political elites and bureaucrats who feared that such efforts would move the country away from a decades-old rentier system to a merit-based one. This group accurately predicted that reform would chip away, even if gradually, at privileges it had acquired over a long period of time in return for its blind loyalty to the system. It thus stood firm not just against the reform efforts themselves, but also in opposition to the king's own policies.
Topic:
Development and Government
Political Geography:
Middle East and Jordan

3. Will Oil Drown the Arab Spring?

Author:
Michael L. Ross
Publication Date:
09-2011
Content Type:
Journal Article
Journal:
Foreign Affairs
Institution:
Council on Foreign Relations
Abstract:
Summary: No state with serious oil wealth has ever transformed into a democracy. Oil lets dictators buy off citizens, keep their finances secret, and spend wildly on arms. To prevent the “resource curse” from dashing the hopes of the Arab Spring, Washington should push for more transparent oil markets -- and curb its own oil addiction. MICHAEL L. ROSS is Professor of Political Science at the University of California, Los Angeles, and the author of the forthcoming book The Oil Curse: How Petroleum Wealth Shapes the Development of Nations. Even before this year's Arab uprisings, the Middle East was not an undifferentiated block of authoritarianism. The citizens of countries with little or no oil, such as Egypt, Jordan, Lebanon, Morocco, and Tunisia, generally had more freedom than those of countries with lots of it, such as Bahrain, Iraq, Kuwait, Libya, and Saudi Arabia. And once the tumult started, the oil-rich regimes were more effective at fending off attempts to unseat them. Indeed, the Arab Spring has seriously threatened just one oil-funded ruler -- Libya's Muammar al-Qaddafi -- and only because NATO's intervention prevented the rebels' certain defeat. Worldwide, democracy has made impressive strides over the last three decades: just 30 percent of the world's governments were democratic in 1980; about 60 percent are today. Yet almost all the democratic governments that emerged during that period were in countries with little or no oil; in fact, countries that produced less than $100 per capita of oil per year (about what Ukraine and Vietnam produce) were three times as likely to democratize as countries that produced more than that. No country with more than a fraction of the per capita oil wealth of Bahrain, Iraq, or Libya has ever successfully gone from dictatorship to democracy. Scholars have called this the oil curse, arguing that oil wealth leads to authoritarianism, economic instability, corruption, and violent conflict. Skeptics claim that the correlation between oil and repression is a coincidence. As Dick Cheney, then the CEO of Haliburton, remarked at a 1996 energy conference, "The problem is that the good Lord didn't see fit to put oil and gas reserves where there are democratic governments." But divine intervention did not cause repression in the Middle East: hydrocarbons did. There is no getting around the fact that countries in the region are less free because they produce and sell oil.
Topic:
NATO, Government, and Oil
Political Geography:
Iraq, Ukraine, Middle East, Kuwait, Libya, Vietnam, California, Saudi Arabia, Spain, Lebanon, Egypt, Jordan, Bahrain, and Tunisia

4. PolicyWatch #1269: The Islamist Boycott of Jordanian Municipal Elections: A Victory of Public Relations or Politics?

Author:
David Schenker
Publication Date:
08-2007
Content Type:
Policy Brief
Institution:
The Washington Institute for Near East Policy
Abstract:
On July 31, in a contest widely seen as a tune-up for November's parliamentary balloting, Jordanians went to the polls for municipal elections. Amman had hoped these would showcase Jordan's relatively advanced style of representative democracy in the Middle East. Instead, in a surprise development, the Islamic Action Front (IAF) -- the political party of the Jordanian Muslim Brotherhood -- withdrew hours into the voting, claiming that government-sponsored fraud had "overstepped the bounds." Subsequently, independent and progovernment candidates swept the elections.
Topic:
Democratization, Government, Islam, and Politics
Political Geography:
Middle East and Jordan

5. PolicyWatch #1266: Jordanian Islamists and Municipal Elections: Confirmation of a Problematic Trend?

Author:
David Schenker
Publication Date:
07-2007
Content Type:
Policy Brief
Institution:
The Washington Institute for Near East Policy
Abstract:
Jordanians go to the polls tomorrow to elect nearly 1,000 local representatives and 92 mayors. On their own, these elections are of minimal interest to Washington: municipalities have small budgets, limited responsibilities, and scant independence from the central government. But the voting comes just a month after the Hamas takeover of Gaza, during a spike in the violence in Iraq, and a week after a landslide victory for the Islamist-leaning Justice and Development Party (AKP) in the Turkish national elections. Adding to the significance of the Jordanian ballot is the fact that, after boycotting the 2003 contest, the Jordanian Muslim Brotherhood's political party, the Islamic Action Front (IAF), will participate in this year's elections. A potential IAF victory highlights growing concern that Islamists are on a political roll throughout the Middle East, and that Jordan may be vulnerable.
Topic:
Democratization, Government, Islam, and Politics
Political Geography:
Iraq, Washington, Middle East, Gaza, and Jordan

6. Jordan and Its Islamic Movement: The Limits of Inclusion?

Author:
Nathan J. Brown
Publication Date:
11-2006
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Recent election results in several Arab countries have transformed formerly theoretical questions into pressing policy concerns: Can Islamist political parties operate within the boundaries of a democratic system? Will participation breed moderation? Strong showings by Hizbollah in Lebanon and by the Muslim Brotherhood in Egypt have made these questions seem less speculative. And the victory of Hamas in the first election it contested has made the questions impossible to avoid.
Topic:
International Relations, Government, Islam, and Religion
Political Geography:
Middle East, Arabia, Jordan, and Mumbai

7. Jordan Looks Inward: The Hashemite Kingdom in the Wake of Zarqawi and the Hamas-Israel Clash

Author:
Samer Abu Libdeh
Publication Date:
07-2006
Content Type:
Policy Brief
Institution:
The Washington Institute for Near East Policy
Abstract:
Even while Israelis and Palestinians are locked in deepening conflict over the kidnapping of a young Israeli soldier and the future of the Hamas government, political life on the East Bank of the Jordan River is increasingly focused on internal Jordanian concerns.
Topic:
International Relations, Government, and Politics
Political Geography:
Middle East, Israel, Palestine, and Jordan

8. Hamas Weapons in Jordan: Implications for Islamists on the East Bank

Author:
David Schenker
Publication Date:
05-2006
Content Type:
Policy Brief
Institution:
The Washington Institute for Near East Policy
Abstract:
On April 18, the Jordanian government announced it had discovered a cache of weapons -- including rockets, C-4 explosives, and small arms -- in a northern Jordanian town. Jordanian authorities said the weapons belonged to Hamas and had entered Jordan from Syria. Subsequently, Jordan arrested ten Hamas militants and cancelled a scheduled visit by Palestinian Authority (PA) foreign minister Mahmoud al-Zahar, a Hamas leader. While the discovery of these weapons underscores Hamas's continuing efforts to prepare for terrorist acts even while it proclaims a tahdiya (period of calm), it also has important implications for internal Jordanian politics and the rising influence of Jordan's own Islamist movement.
Topic:
Government, Religion, and Weapons of Mass Destruction
Political Geography:
Middle East, Palestine, Syria, and Jordan

9. Bad Riddance: The Dangers of Deportation as a Counterterror Policy

Author:
Emily Hunt
Publication Date:
04-2006
Content Type:
Policy Brief
Institution:
The Washington Institute for Near East Policy
Abstract:
Sami al-Arians plea agreement, unsealed last week in Tampa, Florida, has been almost universally billed as a domestic counterterrorism victory. Al-Arian pleaded guilty to providing financial and material support to Palestinian Islamic Jihad, a U.S. specially designated terrorist group, and agreed to be deported. He is one of a small but important number of U.S. deportees (out of approximately 200,000 annually) who have connections to international terrorism.Many in the United States will say good riddance to people like al-Arian, a sentiment shared by a substantial portion of Europeans whose governments are increasing their own efforts to send terrorist suspects back to their countries of origin. Since the July 7 London transit bombings, Britain has signed deportation agreements with Jordan, Libya, and Lebanon, and is negotiating a similar one with Algeria. Spain, Germany, Italy, and the Netherlands have all recently introduced or passed legislation that will facilitate deportation on national security grounds, while the French for their part wonder why other Western democracies have been so slow to catch on. France has been deporting terrorist suspects and other extremists for more than a decade, including more than a dozen radical imams in 2005 alone. American and European deportation policies differ in key areas. U.S. policy is aimed at lawbreakers generally, whereas Europe, because of its more ingrained challenge of domestic radicalism, targets extremist imams and other purveyors of jihadist ideology who can have a pervasive radicalizing effect on a community. Nevertheless, the same rationale underpins deportation on both sides of the Atlantic, and enthusiasm for the policy seems almost universal. Sending problem immigrants back to their native countries allows Western governments to deal with extremists outside the framework of domestic legal codes that remain woefully ill-equipped to address the threat of terrorism. Deportation minimizes the need to adopt draconian measures such as indefinite detention. It is counterterrorism on the cheap, and has become the policy of first choice for domestic law enforcement agencies that lack the personnel and resources to conduct adequate surveillance on all potential terrorists. But although deportation of terrorist suspects may be the most appealing of several bad policy options, it is by no means a perfect solution. Deportation is designed to displace the threat, but it may ultimately create a host of other challenges for the West in Muslim countries and ultimately on its own territory.
Topic:
Government and Terrorism
Political Geography:
Britain, United States, America, Europe, Middle East, France, Libya, London, Palestine, Germany, Algeria, Spain, Lebanon, Italy, Jordan, and Netherlands

10. Previewing Jordan's National Agenda: Strategies for Reform

Author:
Samer Abu Libdah
Publication Date:
09-2005
Content Type:
Policy Brief
Institution:
The Washington Institute for Near East Policy
Abstract:
King Abdullah II's latest domestic reform initiative for Jordan — the National Agenda Committee — will soon release a series of major political recommendations. These proposals will provide the Jordanian government with a detailed framework to guide the reform process in coming years.
Topic:
Development, Government, and Politics
Political Geography:
Middle East and Jordan