Jordan manages to maintain its balance
20 June 2024
Commentary
John Bambridge
Analysis editor
Amid the most severe geopolitical strife in the Levant since 2014 – when the Syrian civil war peaked and conflict also erupted in Gaza – Jordan has remained relatively calm these past eight months. While the kingdom’s streets have seen almost weekly demonstrations over the conflict in Gaza, there has been little sign of the protests seriously jeopardising its stability.
Economic growth is forecast to remain in the low single digits, despite a drop in tourism lowering the forecast in 2024 to 2.3%, and the government has managed to so far avoid being drawn away from its neutral stance on the situation in Israel and Gaza. Amman has withdrawn its ambassador from Tel Aviv and cancelled a planned cross-border utility deal with Israel, but it equally assisted Israel in mid-April by downing Iranian assets crossing Jordanian airspace. Amman claimed self-defence, but it trod a fine line.
Jordan’s neutrality is at once a boon, a necessity and a risk. Its relationship with the US has reinforced the kingdom’s security, and enabled Jordan to extract considerable financial aid from Western partners over the years. Tel Aviv is also a necessary partner for the kingdom in its custodianship of the Al-Aqsa Mosque. At the same time, Jordan has become dependent on Israel for part of its water supply. These dependencies could place Amman in a pretty tricky spot in case of a more serious regional escalation.
As it stands, however, Jordan is benefitting from significant external support – including a $1.2bn loan programme with the IMF and a $5bn Abu Dhabi-backed infrastructure investment fund – as it drives its 2023-33 Economic Modernisation Vision, though progress on the ground has been modest.
In the oil and gas sector, the re-stalling of the $2.6bn expansion of the Zarqa refinery, the country’s only crude refining asset, is a significant setback. In the utilities sector, activity has also slowed in recent years, though the signing of a deal with UAE-based Abu Dhabi Future Energy Company (Masdar) in December to develop 1,000MW of wind energy was a welcome boon. The 2033 vision has also promised a raft of new infrastructure projects.
Amman undoubtedly has ambition, and to date it has managed to ward off the more dire threats to the country and its economy. The big concern is that external events could simply overtake the kingdom.
MEED's July 2024 special report on Jordan includes:
> GOVERNMENT: Policymakers in Amman walk a political tightrope
> OIL & GAS: Jordan refinery project delay is major setback
> POWER & WATER: Jordan’s utility sector buckles up amid uncertainty
> CONSTRUCTION: Modernisation drives Jordan construction
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