David Schenker is the Taube Senior Fellow at The Washington Institute and former Assistant Secretary of State for Near Eastern Affairs.
Amman appears committed to difficult economic reforms, but militant Islamists -- and controversial palace initiatives -- continue to challenge the kingdom's stability.
The Islamic State of Iraq and al-Sham has twice surprised the West, first by conquering Mosul, and later by routing peshmerga fighters and occupying Kurdish territory. But ISIS, which now calls itself the Islamic State, also threatens Jordan, and the group is hoping to once again shock the West by opening a new front inside the kingdom. In recent weeks, Jordanian authorities have reportedly arrested fifty supporters of ISIS and al-Qaeda affiliate Jabhat al-Nusra. Along with ongoing border infiltration attempts and increased reports of local funerals for Jordanian ISIS members killed in Syria, the arrests suggest that the organization may be making inroads. Yet while Amman is clearly taking steps to mitigate these concerns, King Abdullah has repeatedly described economics -- not security -- as Jordan's "biggest challenge."
Over the past few months, the Jordan Armed Forces (JAF) have prevented several cross-border infiltration attempts by armed groups from Syria. The latest skirmish -- an August 24 clash in which the JAF killed two and captured five -- was only one of several troubling incidents. In April, for example, Jordanian F-16 fighters targeted a convoy of vehicles attempting to illegally enter the kingdom.
The war in Syria also appears to have generated a reservoir of Jordanian support for Salafi jihadists. Over the past two years, reports of funerals in the kingdom for Jabhat al-Nusra fighters killed in Syria have become ubiquitous. But the popularity of ISIS appears to have grown as well in light of the group's gains in Syria and Iraq. In June, a small group of supporters held a pro-ISIS demonstration in Maan. And in early August, according to the Jordanian online daily Maqar.com, a "martyr's wedding" was held in the Beqa refugee camp for a Palestinian Jordanian ISIS member who died fighting Syrian regime forces on the Iraqi border.
IT'S THE ECONOMY
In June, the Jordanian parliament passed a controversial counterterrorism law providing authorities with sweeping new powers, criminalizing participation in foreign jihads, and affording the government wide legal latitude to imprison citizens who lend ideological and recruitment support to terrorist organizations. Yet even as the government fulfilled the palace's request to create a more robust legal framework for countering the Salafi jihadist threat from Syria and Iraq, King Abdullah has focused on the economy. On August 22, he told a group of Jordanian economic leaders, "Today we are facing enormous challenges on more than one front, foremost of which are the economic challenges." These challenges, he said, are inextricably linked.
The king is right. Even before an estimated 1.5 million Syrian refugees entered Jordan, the kingdom was struggling economically. According to Prime Minister Abdullah Ensour, "Jordan's economy faces its worst situation in history." The official unemployment rate is 12 percent, but it is widely believed to be near 30 percent, and perhaps even higher in some regions. Nearly 80 percent of the Syrian refugees in Jordan live outside of camps, and their entry into the domestic labor market is exacerbating the problem -- late last month, the Ministry of Labor announced it had shuttered 125 companies illegally employing Syrian expatriates, presumably at lower wages. Housing and commodity prices are also increasing, driven by higher local demand.
Jordan's fiscal situation is little better. In 2013, state debt increased by $5 billion to $27 billion and is fast approaching 85 percent of gross domestic product. Debt servicing alone costs Amman about $1 billion per year -- a hefty sum given that the state's annual budget is only about $11 billion. Moreover, Jordan's fuel imports accounted for nearly $3 billion in the first six months of 2014 -- an increase of 27 percent from the same period last year -- while its trade deficit rose by 10 percent.
Making matters worse, the government has had to raise the price of flour to subsidized mills by 2 percent while lowering subsidies on staples such as kerosene and electricity, in line with structural reform commitments required to secure over $2 billion in loans from the International Monetary Fund. Amman is also working on a new tax law at the IMF's behest designed to raise revenues and decrease perennial budget deficits, which this year amount to $1.6 billion -- a 14 percent shortfall. Not surprisingly, local professional syndicates are already lobbying lawmakers to exempt their constituents, arguing that the new taxes will "hurt the middle class." Taken together, these reforms, while necessary to ensure the kingdom's long-term economic health, will likely lower the standard of living for average Jordanians in the near term.
Amman's economic reform policy, while praiseworthy, is yet another in a growing litany of unpopular palace initiatives. Among the more controversial developments, parliament approved new constitutional amendments last week formalizing the king's previously unofficial authority to appoint the heads of the JAF and General Intelligence Directorate. The move was criticized in terms of process as well as substance: the amendments were legislated quickly and with little debate, prompting one local analyst to opine that Jordan should "enter the Guinness Book of World Records."
Prime Minister Ensour predictably applauded the amendments, saying they would move Jordan toward democracy by preventing "politicization" of security institutions. Other assessments were less charitable. According to opposition parliamentarian Rula Alhroob, the changes "expand the direct powers of the King" and undermine government accountability. "If the defense minister is unable to appoint and dismiss the intelligence chief and the commander of the army," she asked, "how can the defense minister be answerable for their mistakes?" In the end, she said, "the military and intelligence apparatuses are not independent of the government." The High Committee of Retired Generals was also critical, publishing a missive in the online daily Jo24.net describing the amendments as "an attack on the constitution and a challenge to the will of the people."
Less discussed was the government's August 15 announcement that it will move forward on its nuclear energy plans in the coming months, with Russian firm Rosatom slated to build two reactors in the kingdom. To be sure, Jordan needs energy security, but the estimated $10 billion cost of the facilities and the potential environmental dangers will engender significant local opposition. Earlier this year, the Bani Sakhr -- one of Jordan's largest tribes, historically known for close ties to the palace -- protested planned construction of one of the reactors on their land. In any event, the kingdom has other energy options, including a combination of Israeli natural gas -- for which a fifteen-year, $15 billion deal was reportedly signed today -- and indigenous oil shale in the eastern desert.
Notwithstanding concerns about ISIS and Jabhat al-Nusra, King Abdullah's focus on the economy is well warranted. Even if Jordan's security solution to Islamist militancy is effective in the short term, the kingdom will become increasingly fertile ground for local recruitment if the economy does not improve. Civil disturbances are already a regular occurrence outside the capital. The long-restive city of Maan leads the headlines, but tire burnings and clashes between citizens and gendarmerie in Irbid and other towns are becoming routine, suggesting significant frustration. Meanwhile, Washington has been training moderate Syrian rebels on Jordanian soil for months, and such activity could elevate the kingdom on ISIS and Jabhat al-Nusra's target list.
To be sure, reports that the al-Qaeda flag has been flying over Maan's central square for the past six weeks are disconcerting, but that city has long been a headache for Amman. As the king noted, the key to preventing unrest from spreading is to improve the perennially weak economy. The question is whether enough tangible gains can be made on that front soon enough to forestall further Salafi jihadist inroads.
At present, Washington's $300 million in annual funding to Jordan's robust and loyal armed forces is sufficient to contend with the threat on the Syrian and Iraqi borders. Yet additional U.S. financial assistance beyond the current $360 million in annual aid could help alleviate some of the pain of the kingdom's economic reforms. Even with such assistance, though, turning the economy around will take time. With no end in sight to Syria's war and its associated refugee flows and Islamist militancy, Jordan's long-term stability will largely depend on the palace's ongoing commitment to IMF structural adjustments, and on the vigilance of the General Intelligence Directorate.
David Schenker is the Aufzien Fellow and director of the Program on Arab Politics at The Washington Institute.