Jordan entered 2008 with unprecedented increases in the cost of living after the government stopped subsidizing basic commodities to remedy the sluggish economy. Following the phenomenal increases in oil prices worldwide, the government could not handle the pressure of an ever-increasing budget deficit, which has reached $800 million, and decided to float prices of fuel. This led to a domino effect on prices of daily commodities across the board. Economists say the components of this economic disaster are bad fiscal policies, lack of natural resources, and, of course, corruption, as well as inflated spending by a Third World government that behaves as if it were a super power. "Although we are a poor nation, senior officials spend millions on trips abroad and renewing office furniture and driving new cars," said Islamist deputy Hamza Man'sour. Politicians in Amman admit that the boom in oil prices was the catalyst for the unprecedented increase in the cost of living, but they also blame the United States for not doing enough to help one of its main allies in the region fight this battle. Jordan has no natural resources and heavily depends on foreign aid to keep its fragile economy going. Official figures show that foreign assistance during 2007 reached $680m., compared to $675m. in 2006. The total grants committed by the US, the European Union, Germany, Canada, Japan, China, Italy, Korea, the World Bank and United Nations agencies reached $470m. The US government allocates nearly half a billion in annual assistance, including nearly $240m. in military assistance. The US contribution is "disappointing," say politicians, who are quick to point to recent political concessions the kingdom has had to make, including going against the wishes of its public and supporting the war in Iraq. Politicians in Amman, including former prime ministers, cannot help but feel nostalgic for the days when Iraq was ruled by Saddam Hussein, whose generous contribution balanced the books. Jordan used to receive its annual oil needs from its neighbor, half as a grant and the other half at a discount rate. Saddam enjoyed immense popularity in Jordan for his pan-Arab mottos during the '80s. His popularity increased when, during the first Gulf War, his rockets lit up the skies on their way to Tel Aviv, since more than half the population is made up of Palestinian refugees. Saddam is also credited with sending thousands of students to universities for free, plus financial contributions through contracts or oil assistance. However, the leadership in Amman sought to support the US-led invasion of Iraq, which subsequently resulted in cutting the main artery that fed the economy. "The leadership took a decision to support the war on Iraq, although the total majority of the nation was against it. But in the end, the US administration has abandoned Jordan during this current crisis," said former minister of trade Wa'sif Azir. He said the strategic importance of Jordan was that it shared its longest borders with Israel and fought a fierce battle against extremism, and this should be enough reason to help Jordan stand on its feet - or at least pressure oil-rich countries into giving it a helping hand. He said the word in political saloons was that the kingdom was being made to suffer as oil-rich Arab states were "being prevented from digging into their wallets [to] help control the skyrocketing inflation." "Gulf states cannot act without the orders of the US government. They seek American protection and cannot take one step without its approval," said Azir. Politicians argue that the government's arm is being twisted to accept major political concessions related to final-status talks between the Palestinians and Israelis. "Washington does not have allies, it has interests," said political analyst Samih Mayta. Politicians in Amman accuse Israel of pushing Washington to pressure Jordan economically to force the latter to accept confederation with the Palestinians. "Bush is working hard to achieve his goal of reaching a final solution to the Palestinian-Israeli conflict by end of 2008. This has led him to exert pressure on the kingdom to succumb to the wishes of Tel Aviv," he added. The idea of confederation with the Palestinians is not new to Jordan. It was floated during the early stages of the Arab-Israeli conflict, but was mooted then due to concerns of a demographic imbalance between Jordanians and Palestinians. Jordanians of Palestinian origin make up 65 percent of the kingdom's 5.7 million people. Another influx of Palestinians from the West Bank would create serious challenges to the regime in Jordan, say politicians. King Abdullah II went to the US for an official visit that started February 28 to lobby for pushing the peace process forward in order to allow for the creation of an independent Palestinian state. Only then, politicians say, would Jordan consider talking about a possible confederation with the Palestinians. Jordanians fear that confederation before the establishment of a Palestinian state would compromise the interests of Palestinians, including in the West Bank, the future of 1.8 million refugees, and water resources, among others. However, Mayta said the current economic hardship would not force the kingdom down on its knees. Jordan has been through similar political and economic hardships in the past, such as the saga that surrounded Camp David, when Jordan refused to take part in peace talks between Israel and Egypt, and after the First Gulf war, when Amman opposed invading Iraq and supported Saddam Hussein after he occupied Kuwait, he said. "We survived in the past, and we will survive now," he said. However, diplomats in Amman say the government should stop depending on handouts from the West and tighten its belt to survive this current ordeal. They say Jordan needs to take serious measures to reform its economic policies, fight corruption and cut down on the high number of public-sector employees, who have been causing a massive strain on the state budget. "You cannot expect the American administration to pay bills of corrupt lawmakers or government officials who spend lavishly. The kingdom must first do its homework on spending, improve performance of the public sector and implement genuine political reform," said a diplomatic source.