Jordan’s Resource Gap

Jordan has long suffered from a severe imbalance between resources and population. Before the peace treaty with Israel, Jordan was forced to shoulder the burdens of a front-line state and the resultant military expenditures that the country’s legitimate defense requirements entailed. Jordan’s small economic base has also been strained by large waves of Palestinian refugees seeking refuge during the Arab-Israeli wars of 1948 and 1967, as well as Jordanians forced to return from the Gulf during the Gulf Crisis.

In terms of national wealth, Jordan has comparatively little in the way of natural resources. Lacking the oil riches of the Arabian Gulf states and facing a serious water shortage, Jordan has built the foundation of its economy on a well-educated and healthy labor force. However, due to the gap between the country’s scant natural resources and the need for economic and social programs to support its burgeoning population, Jordan has been forced to rely heavily on funds from external sources.

Therefore, in order to maintain a reasonable defense capability as well as viable socio-economic programs, the Jordanian state has relied on the assistance of external powers. Prior to the Gulf Crisis of 1990-91, this help came primarily from oil-rich Arab countries. Western countries, particularly the European Union and Japan, have also contributed much to Jordan’s economic well-being. While the short-term interests of Jordan and such countries—both Arab and non-Arab—have, in the past, converged, partly to maintain a modicum of stability in the region, their long-term interests and strategic outlooks have often been far from identical. This has occasionally been made apparent in the course of interactions over vital regional issues.

The Jordanian leadership is fully cognizant of the interdependent nature of the international arena. However, strong initiatives have been undertaken in recent years to reduce the country’s dependence on external assistance. Grants and loans received now are not financing consumption at the expense of investment—as happened during the boom years of the 1980s. Rather, current assistance is being utilized mostly to facilitate the IMF-designed economic restructuring plan. With the expanded opportunities for trade brought about by an “open” Middle East, a revamped and more competitive Jordanian economy will be better able to stand on its own without depending on foreign donors. This, in turn, will allow more independence for Jordan to further its long-term “second track” strategic objectives toward the revitalization of the Arab world and the Middle East region.