With Surrounding Conflict Rising, Jordan Faces Potential Instability

     Situated in one of the world’s most hostile regions, the Kingdom of Jordan is a Western ally with unique political stability and a relatively durable economy. While Jordan is laden with opportunity for international cooperation and investment, it faces increasing security concerns associated with conflict in the surrounding region. Jordan is affected by the threat of the self-proclaimed Islamic State in Iraq and the Levant (ISIL), whether or not ISIL is defeated in external home-based areas, and the tremendous inflow of Syrian and Iraqi refugees into Jordan which now account for 13 percent of its total population. Overall, the risk of instability is greater today than it has been in several decades. In addition, Jordan’s economy has seen weaker growth in recent years since a strong period from 2001-2009, the implementation of austerity measures, challenges to implementing fiscal reforms due to external conflict, and a volatile reliance on expensive energy imports. 
 
     In total, Jordan benefits from its position as a stabilizer in the Middle East and as a close partner to the United States in counterterrorism efforts. It has maintained a free trade agreement with the United States since 2000 and is also a WTO member since 2009. The strong healthcare, tourism, and services industries remain of particular interest to foreigners and current domestic political stability allows for a seemingly safe FDI environment. But despite its economic successes, Jordan continues to receive aid from the West and the IMF. Growth was resilient in 2015 but has dropped to an average of around 3 percent compared to its average of roughly 6 percent from 2001-2009. Another critical feature of economic risk lies in the fairly high unemployment rate, which now sits at around 15 percent (1). As seen in 2015, the improving manufacturing industry will continue to benefit from lower production costs. Household consumption will continue to sustain activity, as it has benefited from increased purchasing power due to the drop in hydrocarbon prices. The Vision 2025 development plan and the growth in public investment to follow will offset the negative impact of a contraction in exports. The Vision 2025 plan also means increased public spending, which is problematic considering Jordan’s public debt, which accounts for 86.6 percent of its GDP and a current budget balance at negative 3.2 percent (2). Despite avoiding fighting on its soil, conflicts surrounding Jordan have negatively affected trade activity. Total trade fell from 146 percent of Jordan’s GDP in 2007 to 112 percent in 2014, largely due to losses of key trading partners and routes in Syria and Iraq. Foreign direct investment fell from 15 percent of GDP in 2007 to just 5 percent in 2014 (3). Of most concern, violence and instability in Syria and Iraq is infinitely linked to Jordan’s own prosperity and the potential for political instability within Jordan has increased, thus investor confidence has seen a recent downward trend due to the escalation of the aforementioned conflict.
    
     Though Jordan has seen few attacks within its borders in recent years compared to its neighbors, there are 2,000 Jordanian ISIL members. Jordan remains a target, and according to a 2015 survey from Center for Strategic Studies at the University of Jordan, about 10% of Jordanians view ISIL positively. In June of 2016 a gunman opened fire on a national intelligence office, killing five employees, three of whom were intelligence officers. The shooting occurred in the Baqa’a Palestinian refugee camp, which is one of the largest in Jordan. In addition, in 2015 a horrific video surfaced of ISIL burning a Jordanian pilot to death in a cage, which caused immediate retaliation by the Jordanian government. While such attacks are uncommon, the overall presence of radicalism still determines Jordan is a zone of risk, and the potential for an ISIL uprising in the coming months or years has become a realistic factor if a specific chain of external events occurs. Essentially, if Jordanian ISIL fighters are kicked out of their home bases in Raqqa and Mosul, they may choose to return home in order to undermine their own government. Returning fighters have been proven capable of finding safe havens in their home country (4). 
 
    Domestic instability has diminished, but it is still existent and able to quickly return as a serious risk following the case of a major event. The potential for the removal of King Abdullah, an altering of the monarchical system, or the threat of an anti-Western form of government are critical risks to the West’s agenda and to Jordan’s survival as a state. Such action may occur in cases such as an uprising in Amman, Islamist pressure against the monarchy, and the defection of the regime's core base of support in the East Bank. Challenges which spark such instability in Jordan include the effects of Syria's civil war, potential military entanglement in the border zone, the spread of Salafist radicalization, and the heavy cost of the extensive refugee population. Also of concern are rising public anger caused by economic austerity, slow political reform, and confidence in Jordan’s Muslim Brotherhood and Salafist movements. On the far west side of Jordan, opposition has emerged among East Bank supporters who supply the manpower for Jordan's armed forces and security service; this is due partly to poor economic conditions, alienation from new social classes in Amman, and anger at the regime's ignorance of tribal grievances. The tribal-based opposition revolves around the Hirak ("Movement"), a political organization which has staged street protests in East Bank cities. Such domestic instability would only hurt the West, as the monarchy plays a vital role in keeping Jordan pro-West and pro-peace. The lack of a monarchy would certainly harm Jordanian-American and Jordanian-Israeli relations. Pressure from Islamist regimes or leaders in Egypt and Syria would involve encouraging Jordan's Islamists to not only take bolder positions but also use violent resistance (5). Of more immediate concern to inner-state volatility, refugees now account for 13 percent of Jordan's population and are a major burden on Jordan's weak economy, so much that in 2015 the cost of sustaining refugees was equivalent to 17.5 percent of the country's budget, which helps explain much of Jordan's 2 billion USD deficit (6).
 
     Jordan’s current landscape of economic concerns, potential for sudden inner-state tension, conflict in surrounding regions, an overflow of refugees, and position as a nearby ISIL target place the Kingdom in an evident position of risk. However, as long as domestic political stability remains strong, economic reforms are properly implemented, and foreign cooperation grows in areas of investment, counterterror operations, and humanitarian intervention in dealing with refugees, Jordan can continue to act as a peaceful stabilizer in a region of despair. 
(1) Discussing Jordan's Economy. Perf. Jordanian Minister of Finance Ummaya Salah Toukan, Minister of Planning and International Cooperation Ibrahim Saif. Discussing Jordan's Economy. Atlantic Council, 24 Oct. 2013. Web.
 
(2) Coface. "Jordan." Economic Studies and Country Risks. Coface, Jan. 2016. Web.
 
(3) Wille, David. "Even If ISIL Is Defeated, Jordan Remains at Risk." Global Risk Insights. Global Risk Insights LLP, 17 June 2016. Web.
 
(4) Ibid.
 
(5) Satloff, Robert, and David Schenker. "Political Instability in Jordan." Council on Foreign Relations. Council on Foreign Relations, May 2013. Web.
 
(6) Ibid.

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Image: © Wildkatphoto | Dreamstime.com - Jordanian Army HMMWV Photo