Jordan struggles to regain economic balance after massive influx of refugees

ByNOGA TARNOPOLSKY/THE MEDIA LINE
June 6, 2016 06:38

Unemployment and inaccessible housing are major challenges.




Syria refugee camp

An aerial view shows the sprawling Zaatari refugee camp in Jordan in July 2013. (photo credit:REUTERS)

Imagine for a moment that you are Jordan. Life in the Middle East is never easy. The desert is arid. The clans are at each other's throats. You are a small, virtually landlocked country among regional behemoths.

In 1990, for example, Saddam Hussein’s Iraq invaded Kuwait. Kuwait, stung by the support of the then-leader of the Palestine Liberation Organization, Yasser Arafat, for Iraq, expelled about 200,000 Palestinians, of which about 120,000 nominally held Jordanian citizenship, and came flooding “back” to a country they didn’t know.

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The economic fallout cost Jordan about $1.8 billion, or 32% of GDP.

Then, in 2003, the Iraq War. One million Iraqis arrived in Jordan as refugees from the conflict, half of which eventually claimed Jordanian citizenship.

Finally, the Arab Spring, “if you still call it that,” says Jordanian writer and political analyst Salameh Nematt, “which eventually turned into the Syrian crisis, which has driven over a million people into Jordan,” whose population is under 10 million people, roughly like that of Michigan.

According to the United Nations, which has set up refugee camps in northern Jordan, the kingdom has taken in about 1.2 million Syrian refugees thus far, a burden that few other countries would or could undertake.

In 2015, the United States provided Jordan with about $1 billion in aid directed specifically at helping it cover the cost of housing refugees and as an acknowledgment of Jordan’s leading role in the US-led combat effort against the Islamic State.

Jordan’s participation in the US-led campaign is remarkable among Arab states and is a sign of the close alliance between Jordan’s King Abdullah II and Washington. Oded Eran, a former ambassador of Israel to Jordan and a senior research fellow at Tel Aviv’s Institute for National Security Studies told The Media Line that Jordan’s difficulties emanate principally from the loss of non-earmarked funds that the Gulf Emirates have previously provided to sustain the stability of Jordan.

“Aid from western countries directed at specific projects has not diminished,” he said. “The issue is the money the king has traditionally used to calm things down among tribes in the less prosperous part of Jordan, in the south, where there has always been economic hardship, and now, with the influx of over a million Syrian refugees who are willing to work for half of what any Jordanian earns, and perform menial labor Jordanians do not want to do, the unemployment crunch is only worse.”

In addition, Jordan has faced the strain of Egypt’s cycle of revolutions or the growing tensions between Iraq and Saudi Arabia, two regional behemoths, or the crisis between Turkey and much of the rest of the region. If Jordan were a human being, you’d tell Jordan to take a breath. “Jordan is now in a crisis,” Nematt sums up.

Nematt, who is currently based in Baltimore, MD, and who has been a vocal critic of the Jordanian government, told The Media Line that “the true miracle is that Jordan has survived so far. It is commendable. You have to give them credit that in the midst of the tide of the Arab Spring, amid the 2008 economic crisis that rocked the western world, in spite of it all, Jordan has survived.”

It has, though, four months before parliamentary elections, unemployment and economic strain are widely believed to be the principal challenges faced by the incoming government.

According to government statistics, Jordan’s rate of unemployment reached 14.6% in the first quarter of 2016, an eight-year high. Informally, many economists says real unemployment, including underemployment and masked employment—unproductive labor—may be as high at 30%. Ahli Bank chairman Omar Razzaz, an economist who spoke with the Jordan Times, said that joblessness is the biggest problem facing the Hashemite Kingdom, adding that in his view, the only remedy will be large investments by Jordanian, Arab and overseas investors.

Razzaz recommended the incoming government reform the bureaucracy as regulations and laws cannot alone boost investors’ confidence if Jordan’s notoriously challenging red tape remains in place. “We need to target Chinese investors interested in the African market to make Jordan as their launch pad. There are also Jordanian and Syrian investors eyeing the reconstruction of Syria and Iraq,” he said.

“The problem has gotten worse and worse since 2011,” Nematt says, with unemployment already high before the before the Syrian crisis.

“The Syrian refugees are desperate to get any job and are willing to accept pay much below the local standard. This has principally affected Jordanians on the economic margins, but it is important. The problem has been even more significant for the Egyptian foreign workers in Jordan, who were already a recognized class.

By law, the Egyptians are required to get an annual work permit that costs some $500. So the Egyptians are regulated, but the Syrians, over a million of them, are not. It is just huge.” For Jordan, Nematt continued, “this is a double crisis.

For example, Jordanians are paying three times the rent they were paying just in 2010. Again, the Syrians are desperate to rent whatever they can and prices have been driven through the roof. Low income Jordanians simply cannot afford it, this forced people to stay with their families and this is creating a lot of resentment.”

The infrastructure, say many observers, is at a breaking point. The influx of school-age refugees has been so great that unqualified teachers have been hired to staunch part of the tide, leading, again, to resentment and to a negative outcome of the general level of education.

The earmarked income Jordan has traditionally relied upon from its Gulf allies has declined as the emirates have faced growing budget deficits from the fall in the price of oil, Eran said. Jordan, also, faced tremendous pressure from its American ally to accept Syrian refugees when revolt began, about five years ago, but, according to Nematt, there was also a wave of humanitarian solidarity “that has completely evaporated now.”

Initially,” he says, Jordanians living under the stable and relatively benign rule of the Jordanian royal house “were very welcoming. They hated [Syrian president Bashar] Assad so much—a man who kills his own people. There was huge sympathy for the Syrians.” Now, Jordan is simply struggling to stay afloat.

Some signs point upwards. Alongside the evident setbacks that have come with the influx of refugees, some Syrians have moved their businesses to Jordan and are attempting a permanent relocation and a new beginning. “They hire mostly Syrians,” Nematt remarked, “but it is an indication of the possible benefits Jordan may eventually reap from what is right now a fairly critical moment.”

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