Jordan's Geopolitical Dilemma in a Changing Middle East

A decade after he succeeded his legendary father Hussein bin Talal as the fourth Hashemite king of Jordan, Abdullah II has emerged as a deft Arab statesman who has steered his country amid one of modern Arab history's most traumatic geopolitical moments.

George Bush's Iraq invasion, a bloody insurgency and civil war, the Israeli invasion of Lebanon, the second Palestinian intifada and collapse of the Oslo/Madrid peace process, Al Qaeda's terrorist outrages, the Hamas takeover in Gaza and subsequent fratricidal bloodshed with Fatah and, above all, Iran's resurgence as a powerbroker in Iraqi-Lebanese Shia politics have created the most dangerous regional milieu for the Hashemites since Jordan lost East Jerusalem and the West Bank in the Six Day War in June 1967.

While King Abdullah is committed to political reform, the shock of Al Qaeda terrorist bombings at the Grand Hyatt, Radisson SAS and Days Inn hotels in central Amman proved that it is quixotic to expect political liberalization at a time when the Hashemite kingdom faces myriad external, existential national security threats. Economic reform was the original template when King Abdullah first acceded to power in 1999, symbolised by Jordan's entry into WTO, free trade agreement with the US and the privatization of Jordan Telecom. However, the pathological experiences of the post 9/11 Middle East meant that national security, not economic and political reform, once again defines policy choices in Jordan. As was the case during the reigns of all his predecessors in Amman's Basman palace, state power in King Abdullah's Jordan derives from the royal court, the impeccably trained and efficient General Intelligence Department (mukhabarat) and the loyal, East Bank tribal and Bedouin army, not an elected parliament dominated by political parties opposed to Jordan's strategic alliance with the US, peace treaty with Israel and diplomatic rapprochement with Egypt and Saudi Arabia.

The American invasion of Iraq was an unmitigated disaster for Jordan. The Hashemite kingdom, not blessed with Saudi Arabia's oil riches or Egypt's huge population, is the ultimate strategic sandwich in the Arab world, a kingdom brutally exposed to all the tragedies and horror of the Middle East. The creation of Israel in 1948 forced the then impoverished Hashemite kingdom to accept hundreds of thousands of Palestinian refugees. Bush's invasion of Iraq has forced Jordan to house and feed 750,000 Iraqi refugees at a time when inflation, unemployment and poverty afflict so many Jordanian citizens.

As Iraq degenerated into a Hobbesian nightmare after 2004, Jordan lost its privileged access to the Iraqi export market and crude oil subsidies from the Saddam regime. Uncle Sam's wars in Iraq and Afghanistan inflamed anti-US passions across the Arab and Islamic world and exponentially raised the domestic policy cost of Jordan's historic ties to Britain and the US.

The global financial crisis has only accentuated the structural economic vulnerability of Jordan to lower phosphate/potash prices, tourism revenues and remittances from the Jordanian diaspora in the GCC. The influx of almost a million Iraqi refugees, stratospheric oil prices and the removal of fuel subsidies have exposed Jordan's population to an inflation spiral and severe fiscal constraints. These macroeconomic pressures are only compounded because the Jordanian dinar is pegged to the US dollar, making it impossible for Amman to devalue its way out of the most vicious economic downturn since Jordan defaulted on its foreign debt two decades ago. Jordan has negotiated a resumption of the discounted Iraqi crude oil imports it lost after the fall of the Saddam regime in 2003, but the transit/re-export trade via the Red Sea port of Aqaba is nowhere near its heyday during the UN sanctions era of the 1990's. This is the reason Jordan's trade deficit is a shocking one third of GDP, among the worst trade metrics in the Arab world.

The tragic fate of the Hashemites symbolizes the tragedy of the Arab world in the past century. Sharif Hussein bin Ali, whose ancestors were the hereditary emirs of the Hejaz for millennia, lost his dream to be crowned the King of the Arabs when he was double crossed by Britain and France at the Versailles peace conference. Winston Churchill created Iraq and Jordan as consolation prizes for the Hashemites after Sherif Faisal was driven out of Syria by the French. His grandson Faisal II was murdered with the entire Iraqi royal family in a July 1958 military coup. King Abdullah I of Jordan, the current king's grandfather, was assassinated outside Al Aqsa Mosque after the 1948 debacle with the Zionists. King Hussein never achieved his lifelong dream of a final negotiated settlement with Israel and the return of Arab Jerusalem. Modern Jordan, with its liberal, civilized ethos and its evolving constitutional monarchy, is the last surviving remnant of Sharif Hussein's lost dream.