Investment boom from Gulf petrodollars makes Jordanians leery

"Such practices are eroding trust in the government because they lack transparency."

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July 14, 2008 12:10
3 minute read.
Investment boom from Gulf petrodollars makes Jordanians leery

amman building 88 224. (photo credit: )

The two new skyscrapers piercing the skyline signal this tiny country's aggressive outreach to foreign investors. But its king - a strong US ally - is now on the defensive, forced to publicly fight corruption rumors prompted by a backlash against Gulf money. The government recently sold large swaths of land in and around the Jordanian capital to investors from Kuwait, Saudi Arabia and United Arab Emirates for an estimated $10 billion. Additional multibillion deals to sell army property - a symbol of Jordanian pride - sent jitters nationwide and fueled accusations of government profiteering. The controversy has become sharply political. "Such practices are eroding trust in the government because they lack transparency; they're entrenching corruption and hurting the poor" by raising prices, said Jamil Abu Bakr, deputy chief of the Muslim Brotherhood Movement, Jordan's largest opposition group. Lawmakers have demanded government explanations over "hidden" privatization projects. Opposition groups and unionists have brainstormed ways to block deals. The fervor has even spread to the Internet. "Jordan is not for sale," blogger Hussein Rawashdeh cautioned last week. King Abdullah II, in a rare move, went public to dismiss the corruption allegations as "fantasy." "Our culture and national identity will never be for sale, as claimed by some malicious rumors," he said last week. Gulf wealth provides a rare opportunity for his oil-barren and cash-strapped nation, Abdullah said. "If we don't attract Gulf investment, others certainly will," he said. "No one is going to wait for us." The controversy is unusual because Jordanians have close ties with fellow Arabs in general. The ruling family has married into Gulf royal families. But some Jordanian workers claim mistreatment while working in Gulf Arab countries; others resent Gulf Arabs for their oil wealth and accuse them of failing to share it. Jordanians also are resentful of the high land and rent prices they have faced recently - following an influx of Iraqis into the country after the 2003 invasion of Iraq. Land prices have doubled, while three-bedroom apartments in middle-class neighborhoods now sell for $140,000, or three times more than five years ago. "The Iraqis came here and drove real estate prices up the wall, and now the Kuwaiti and other Arab investors will make it much worse for us," said Nabil Aqel, 29. He's postponed his marriage twice since last year because he can't afford an apartment. Jordan's government insists that property sales will generate income to pay off the country's multibillion-dollar foreign debt, reduce poverty and unemployment, and improve health care and education. Jordan, a country with almost no natural resources, has long felt the poor cousin among rich Gulf Arabs. The government receives about $800 million in foreign aid, and the king has pushed for modernization to attract foreign investment. The Gulf investment boom in Jordan began after the September 11, 2001, terrorist attacks in the United States, when Gulf investors, irked by negative perceptions of Islam, headed back east. In seven years, 100 foreign real estate and construction firms - mainly Gulf Arabs - were registered in Jordan, compared with only 82 local companies before 2001. Gulf investment accounted for an average 10 percent of Jordan's gross domestic product, which now stands at $16b., according to government figures. In Jordan's only sea outlet of Aqaba, for example, Saudi, Kuwaiti and Lebanese investors are spending $10.5b. to build resorts, hotels and homes, and rehabilitate the city's port. The construction frenzy is on a smaller scale than the Gulf's - but still leaves many Jordanians feeling bewildered and displaced. Cranes and bulldozers line the hills of Amman, the country's once-sleepy capital, along with American-style town houses, glass shopping malls and glass skyscrapers. The most high-profile are Amman's two new skyscrapers under construction - a Bahraini, Saudi and Kuwaiti venture called the Jordan Gate Towers that is expected to reach 42 floors. The towers will soon be outmatched, though, by 50-plus-floor residential skyscrapers being built on government land sold to a Saudi firm for $200m. The price of a one-bedroom apartment in that building is expected to sell for $350,000 - a figure that raises eyebrows among the middle class here. "Why are they building all these tall buildings for?" asks Hani Alayan, a high school teacher who earns $500 a month. "Who can afford to buy them anyway?"


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