Jordan is sandwiched between troubled countries including Syria and Iraq
It is now home to more than 1.3 million refugees, half from the last 24 months
Its finance minister Umayya Toukan says international help is urgently needed
It’s not easy being Jordan and it is about to become even more difficult, again.
Sandwiched in between Iraq and Syria, Jordan’s destiny seems to be one of a constant struggle for survival. This violent storyline was written over a decade ago during the Iraq war.
The latest outbreak of violence after ISIS swept through Mosul and beyond has Jordan’s inner circle and the business community drawing up worst scenarios, with Syria and Iraq representing bookends of trouble.
Jordan is now home to more than 1.3 million Syrian refugees, half absorbed during the last 24 months. As a sign of the times, on a video shoot down to the Mafraq region two hours south Amman, we saw scores of second hand UNHCR tents that are now being utilized by Bedouins.
The refugee crisis is costing Jordan $3 billion a year, about a quarter of the kingdom’s annual budget expenditure, according to Finance Minister Umayya Toukan.
In an interview in Amman, the former central banker made some strong statements, albeit delivered in his affable, soft-spoken manner.
“The extraordinary burden of the Syrian crisis, as well as any potential regional crisis including the Iraqi situation, should also be met by the international community,” Toukan told me. “There should be much more international assistance.”
Youth unemployment of over 24% is keeping pressure on the government. Syrians are now competing against Jordanians for low-paying jobs, whether in hospitality or light manufacturing.
Toukan said a half billion dollars in total was received last year between the U.S. and Saudi Arabia. While the government is appreciative of that support and loan guarantees to help lower the debt burden, in reality it is not enough to plug a gaping hole in Jordan’s finances.
The budget deficit is running above 9% of GDP, although government officials suggest growth of 5% would have been possible without Iraq factored in.
But Iraq is now very much part of the equation. Oil imports have been cut off for the past few months as violence has escalated. A sizeable $1.8 billion oil export pipeline from Basra in southern Iraq to the Red Sea Jordanian port of Aqaba may be delayed, sources suggest, due to the violence.
King Abdullah’s master plan for growth has been subject to a series of setbacks. Jordan signed a free trade agreement with the U.S. in 2000, the same year it joined the World Trade Organization. He is often referred to in the Davos community as the business friendly monarch, who remains a close ally of Washington, London and Brussels.
But, members of his cabinet suggest, the King’s role as a voice of moderation in a zone of chaos should not be taken for granted.
“We feel we are not getting enough to continue to play our moderating role in the region and meeting the needs of all those refugees is not only a humanitarian issues, it also neutralizes any extremist tendencies,” said Toukan.