Syrian Sanctions Pose New Threat to Jordan's Economy

Abdullah Omar
Tuesday, December 20, 2011

DEIR-ALLA, Jordan - In the lush orchards of Abu Emad in this Jordan Valley town, lemons and oranges glisten in the sun as the day of picking draws near. The valley’s year-round mild climate, fertile soils and relatively ample water supply have made it a winter garden of cucumbers, tomatoes and other produce destined for Europe, where they are unavailable from local growers during the winter.

But this season may be different as Arab League sanctions against Syria go into effect. That is because Jordan Valley farmers like Abu Emad send their best produce through Syria to Europe, where prices are better than anything they could expect at home. The farmers, already coping with debts and water shortages, have few alternatives to Syria.

“If I’m not allowed to export products through Syria, it will be a catastrophe for me and all the communities in the region,” said the scrawny 56 year old farmer. Unemployment in Jordan is already high and poverty is on the rise. This farm employs dozens of workers from impoverished Deir Alla and neighboring towns. “If a war starts, many people will be hurt, not only in Syria, but also in Jordan.”

Unlike Syria’s two other Arab League neighbors, Iraq and Lebanon, Jordan supported the sanctions and King Abdullah has hinted that Syrian President Bashar Al-Assad should step down after more than 5,000 people have died in a crackdown against the government. But the economy of Jordan, an important ally of the U.S., can ill-afford another blow.

Repeated attacks on the pipeline from Egypt have stanched the flow of natural gas that was once Jordan’s primary source of energy. While Abdullah faces no threat to his rule, the country has been shaken by protests calling for reform and an end to corruption. Jordan is already saddled by a record $2 billion budget deficit this fiscal year and high unemployment.

Syria and its Mediterranean ports serve as a lifeline for the kingdom, an almost entirely landlocked country. Close to 30% of Jordan’s exports of fruits and vegetables, about $126 million in 2010, went through Syria to Europe as well as the closer markets of Lebanon and Turkey. The ministry has said that about 3,000 Jordanian trucks will have to stop working because of the sanctions.

Syria finally agreed on Monday to let Arab League observers into the country to monitor a deal it agreed to last month to pull troops from rebellious cities, free political prisoners and start talks with the opposition. Nevertheless, the head of the League said there is no immediate plan to lift sanctions that were imposed when Damascus at first refused outside monitors.

Meantime, Jordanian traders are complaining they are being targeted by the Syrian regime, with trucks facing delays at the border and attacks by loyalists as the vehicles head north to Turkey.

The sanctions include a travel ban against scores of senior Syrian officials, a freeze on government assets in Arab countries, a ban on transactions with Syria's central bank as well as an end to all commercial exchanges with the Syrian government. The sanctions include a ban on dealing with the central bank of Syria as well as major companies that export to the region.

If they can’t find new markets for their fruits and vegetables, the Jordan Valley’s farmers risk seeing everything fall off their branches and rot. The oil-rich Gulf states represent an option, but fierce competition from other countries such as India and strict rules on imports will make it hard to find customers countries such as the United Arab Emirates, Kuwait, Saudi or Qatar, he says.

Experts say other trade partners will have to be considered, including next-door Israel. But with the government already suffering I public opinion over the economy and political reform, expanding trade with the Jewish state would be a risky move. The two countries have a peace treaty but Jordanian popular opinion is hostile to Israel.

Sanctions will not only hit Jordanian farmers, but factories that use Syria as a route to import basic manufacturing products such as textiles and spare parts.

It will also hurt Jordanian families, which get the majority of their fruits and vegetables from Syria as well as wheat, cotton and other basic needs at an affordable price. Jordan imported some $187 million of Syria produce last year, according to Jordan's Agriculture Ministry. Additionally, as pressure on Damascus intensifies and more refugees start to make their way to the kingdom, officials in Amman are concerned that will compound the economy’s woes by adding more mouths to feed.

All told, two-way trade between Syria and Jordan amounts to $400 million, a significant figure for a country of seven million people and an economy worth about $27 billion. Traders say imports from Lebanon would also become all too expensive if they are to be shipped through the Mediterranean and into the Red Sea Gulf of Aqaba.

Jordan officials have sounded the alarm about the damage sanctions will impose if the kingdom’s special problems are taken into consideration. Foreign Minister Nasser Judeh has urged the other Arab countries to consider exempting the kingdom from the trade ban on Syria.

Jordan is believed to have received tens of millions of dollars from the Saudi and Qatari governments to help it accommodate an expected surge in the number of refugees. Experts say the kingdom could be given more cash from wealthier Arab League members to offset losses from cutting ties with Syria.

But Khalid Abdel Rahman, a farmer from the Jordan Valley town of Karama, expressed doubt about the aid money being spent effectively or going to deserving pockets.

“There is no transparency in these issues. If we receive aid, the government would give small amounts to certain people and leave others face the hardship by themselves,” he said.

Meanwhile, Amman has started seeking alternative routes for its exports. Talks have already held with Iraqi authorities to send trucks laden with exotic fruits and vegetables through northern Iraq and into Turkey, before reaching the European market. But the route is almost double the Syrian route and it through politically unstable areas, which will raise costs.

Source: The Media Line.
Link: http://www.themedialine.org/news/news_detail.asp?NewsID=34004.