AMMAN, Jordan — Over the last few decades, Jordan has preserved itself politically as a peaceful oasis in the Middle East. Since the early 1970s at least, it has avoided international disputes, stayed out of armed conflicts and pacified religious radicalization. Even after the Arab Spring revolts and well into the Syrian civil war, Jordan remains politically unscathed by regional conflicts.
The question remains, however, whether Jordan is an exception or simply a latecomer.
Assessing Political Stability
Analysts tread lightly in assessing Jordanian stability, claiming it has “so far weathered the political storm”–key words being “so far.” Others call it a “slow-burn awakening,” implying that negative public opinion and growing resentment are prone to catch up to King Abdullah II ibn al-Hussein’s otherwise stable constitutional monarchy. Economically, it holds large debt and deficit, but gets by with United States, International Monetary Fund (IMF) and Gulf Cooperation Council support.
Its financial sector is well off after the global downturn, but mostly because it has been kept out of international markets. Having been cut off from cheap gas by Egypt and just recently signing a deal with Israel, it is slowly recovering after long-held fears of energy shortage. On the more promising side, it enjoys plentiful oil shale reserves that it is finally beginning to exploit and a healthy export sector specializing in clothing, phosphates, fertilizers and pharmaceuticals.
In 2012, Abdullah II, the son of longtime monarch Hussein bin Talal, resorted to economic austerity to fulfill conditions for a $2.1 billion Stand-By Agreement with the IMF. This move has been criticized by the country’s increasingly vocal post-Spring population, claiming such programs increase unemployment and stall the economy.
In a 2013 memorandum, Council on Foreign Relations scholars Robert Satloff and David Schenker assess these developments, outlining three “contingencies” for continuing stability.
First is a Tahrir Square-like scenario in Amman spurred by slow political reform—an unlikely but dangerous scenario. Second is an Islamist uprising against the monarch, a “moderately likely scenario” that brings to mind the Black September uprising of the early 1970s. Last is the chance of East Bank defection spurred on by newly-formed Hirak political movement. Among other concerns are the economic consequences of housing a large influx of Syrian refuges, which the international community is currently attempting to address.
Jordan Signs Gas Deal with Israel
Jordan’s debilitating natural gas scarcity has kept it as a dependent debtor state, relying first on Egypt then Iraq for natural gas needs. In the same report, Satloff and Schenker suggest Israel as a potential natural gas supplier, with the U.S. acting as “matchmaker” to broker a deal between the two formerly-hostile nations.
A U.S. brokered deal is exactly what happened in early 2014, with Israel agreeing to supply its neighbor with $500 million of gas beginning in 2016. Recently discovered deposits in Tamar and Leviathan have turned Israel into a regional gas giant, with plans to export to Turkey as well. This latest development has been by described by International Business Times “as a way for neighbors in the Near East to mend their troubled relations by jointly profiting from energy revenues.”
The 15-year deal will bind Jordan and Israel economically, incentivizing both nations to maintain positive diplomatic relations. The deal also stabilizes Jordan financially, alleviating long-held fears of an impending energy shortage and its revolving door of natural gas vendors.
Nuclear Power and Oil Shale
Historical dependency on foreign gas has led to the development of a nuclear program for alternative energy. Reports as late as December 2013 confirm that Jordanian nuclear power is well underway, with a plant set to become operational by 2022. It has recently made headlines by signing with Russian corporation Rosatum as its vendor for nuclear reactors. No changes appear to have been made to Jordan’s nuclear plans since its February deal with Israel.
With natural gas sources secure and nuclear power in the works, the obvious next step is finally tapping into its massive oil shale reserves. Reserves located throughout 24 locations cover over 60 percent of Jordanian territory, coming out to an estimated 50 billion tons, according to an early World Energy Council report. Up until recently, the extraction of oil shale reserves has not been commercially viable, but that may be starting to change. Corporations from Saudi Arabia, China and the United Arab Emirates are making plans to begin oil production from Jordanian oil shale.
A Slow but Steadily Emerging Market
Economists see a promising 2014 for Jordan, with a resurgence of demand for Jordanian potash and phosphates as well as a return of tourism to the country. A slow-and-steadily emerging market, progress in Jordan is slow, incremental and largely dependent on regional and internal factors.
And now that Jordan sees an economically viable future—with a growing GDP, access to natural gas, resurgence of industry and tourism, and headway in nuclear power—the austerity programs of Abdullah II can soon be abandoned in favor of a more supportive market. This being a key point of contention among Abdullah II’s critics, it is expected that public opinion for the monarchy will increase, alleviating fears of rebellion.
Sources: Council on Foreign Relations, World Energy, European Council on Foreign Relations, Gulf Times, The Christian Science Monitor, Times of Israel, Arabian Business
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