Jordanians take to the streets
Jordanians generally don’t take to the street. With the disasters that befell their neighbours since the Arab Spring of 2011, Jordanian citizens on the whole stuck to the old formula (helped with a bit of policing): accept order, state competence and economic welfare for little political rights and an unpopular foreign policy. But at the end of May, the cities of Jordan were rocked by unprecedented protests when the government introduced a new income tax law, following months of price hikes on subsidised food and fuel. The perception crystallised that the state has been failing to keep their end of the ‘social contract.’ There were even references to ‘taxation without representation.’
Like other non-oil producing countries in the Middle East, Jordan has been running huge twin deficits, and financing them with largesse from Gulf and non-Gulf donors. But Gulf funding dried up as those countries’ own finances deteriorated with the double whammy of oil price drops and costly wars. Moreover, with the geopolitical shifts sponsored by the crown princes of Saudi Arabia and the UAE, the money Jordan had over decades come to rely on has become “weaponised.” It is not clear what conditions are attached to the money these days, but it is more than the traditional ‘remain stable.’ Today they are speculated to include domestically toxic demands such as sending troops to Yemen, relinquishing the monarchy’s claims of guardianship on Jerusalem’s holy sites, signing on to Trump’s “deal of the century”, etc.
The economic options were limited given the familiar political economy: anaemic growth, uncompetitiveness due to a pegged currency, a bloated state, endemic corruption and structural dependency on aid flow. Moreover, the external balance was damaged by the closure of its two main export markets, Syria and Iraq, which instead of buying Jordanian products sent refugees. Under pressure from the IMF, the government has been removing subsidies on fuel and food and increasing taxes in an attempt to bring these deficits under control. The experiment in austerity was (temporarily) suspended when even better-off citizens took to the street, and demands for political reform began to be voiced. King Abdullah II intervened, stating that the measures “do not achieve justice and balance between the incomes of the poor and the rich”, leading to the resignation of prime minister Hani al-Mulqi, and a promise to repeal the new laws.
The breadth and depth of the protests took most by surprise, and Jordan’s Gulf neighbours ended up offering financial support to help stabilise the kingdom’s economy – firstly Saudia Arabia, Kuwait and the UAE pledged $2.5 billion over 5 years, and Qatar has since pledged a $500 million aid package as well as the promise of 10,000 jobs to Jordanians in Qatar (it is rumoured that Qatar, sensing an opportunity, dangled the money first, but the king had to offer right of first refusal to the Saudis). In any event, while this money is far from transformational, it does offer breathing space. A new government was appointed with a technocratic and popular PM. It is as if Omar Al-Razzaz has been reserved for precisely this kind of eventuality – he used to work for the World Bank, is of liberal reformist views and has nationalist-left political ancestry. The IMF relented a bit as well. But on the whole, traditional ways of dealing with Jordan’s problems prevail for the moment.
It is certain that the structural issues will remain in Jordan unless ambitious reforms to the economy – and possibly the politics – of the country follow. What is not known are the conditions the king had to accept to receive the relief money, and how those may interfere with the reforms – economic and political – that the country needs. In the meanwhile, the quiet street has discovered its voice, and knows that it now has the ear of the Gulf countries – each of which is governed by a similar ‘social contract’.