Why do Jordan’s reform ambitions repeatedly collapse?

(File photo: Ameer Khalifeh/Jordan News)
On December 14, 2022, a new nationwide strike took place in Jordan, four years after another strike toppled the government of Prime Minister Hani Mulki. As in previous strikes, the current motives are economic. Led by truck drivers, the new protests in Jordan have revolved around increased gasoline prices following the government’s disclosure of its planned budget for 2023. اضافة اعلان

Since the beginning of the strikes, the protesters enjoyed a significant level of support among the Jordanian public, who had already been suffering from crippling economic conditions, and witnessing an upsurge of unemployment and poverty rates.

This time, the protests led to clashes with police and the killing of a police officer on December 16, 2022. The increasingly unstable situation in Jordan raises many questions over why Amman is still unable to reform its economy, despite receiving tremendous amounts of foreign aid — around $3.5 billion annually. It also raises many questions over why the Jordanian government seeks easy solutions — like raising gasoline prices — instead of implementing structural reforms to solve its fiscal and economic issues.
From 1999 until the present, Jordan has had 13 prime ministers, 19 different governments, and 42 cabinet reshuffles.
In the Jordanian context, international and local analysts blame the situation on limited resources, limited fiscal capacity, and regional turmoil. However, these are only symptoms of Jordanian economic structural weaknesses.

What is the real cause underlying these symptoms? Arguably, there are five main, underlying obstacles to the implementation of true reform in Jordan.

Successive governments lack the stability to implement reforms.
From 1999 until the present, Jordan has had 13 prime ministers, 19 different governments, and 42 cabinet reshuffles. This has led to short-aged governments with an average life span of 1.2 years. The high turnover rate has made the Kingdom’s ministerial cabinets hesitant to take unpopular measures that could result in another reshuffle or the dissolving of their government.

Due to the weak economy, Jordanian governments have limited space to implement crucial reforms that tend to spawn controversy and public dissent. The accumulated public grievances, weak economic situation, and the broad reach of social media have made it easier for Jordanians to gather and express their anger against government policies. Consequently, this has led to governments delaying reforms or diverting policies.

Jordanians do not trust their political system. A 2022 national survey published by the International Republican Institute in Jordan shows that almost 40 percent of Jordanians believe the country is by-and-large “headed in the wrong direction”, a 24 percent increase from 2020. Similarly, public trust levels in the government — particularly the ministerial cabinet — have declined significantly since the 2011 Arab Spring. Data from the Arab Barometer shows that the proportion of Jordanians who trust the government declined from 71.5 percent in 2011 to 43.3 percent in 2020.
The decline of social trust in state institutions has reduced the credibility of current reform programs and created more space for populist forces to build influence that hinders reform.
The same applies to parliament, where trust levels declined from 48 percent in 2011 to 13.7 percent in 2018. The decline of social trust in state institutions has reduced the credibility of current reform programs and created more space for populist forces to build influence that hinders reform.

Nepotism and tribalism dominate public recruitment and elections.
With the persistence of “institutional favoritism”, Jordan lacks clear, transparent, and effective mechanisms for elite recruitment — the filling of public offices. Political and official positions are most often obtained via favoritism, nepotism, and clientelism. In other words, “elite recruitment continues to be based on personal friendship, if not family relationship,” according to academics Oliver Schlumberger and André Bank.

When it comes to elected officials, Jordanian parliaments face many legitimacy-based questions due to unfair representation of the public. Voter turnout in the latest election in 2020 reached only 29.9 percent, with many questions raised on election fairness due to COVID-19 measures at the time.

Moreover, voting behaviors in Jordan are predominantly tribal. In the 2016 and 2020 parliamentary elections, the majority of voting came from tribal districts, while the urban cities of Amman and Zarqa witnessed the lowest voter turnout in both elections (in the 2020 elections, eligible voters in Amman and Zarqa constituted 53.54 percent of the national electorate). On the other hand, the highest turnout rates for both elections came from three Bedouin districts of Jordan, in addition to other cities with tribal majorities.

The private sector is marginalized. Despite Jordan’s active partnership with the World Bank and the International Monetary Fund since 1989, which has focused on liberalization, the private sector still struggles with governmental control over the economy. In fact, investor confidence levels have been declining over the past few years. The Investor Confidence Survey published by the Jordan Strategy Forum shows that the percentage of investors who see the business environment as “not encouraging” for investment increased from 56 percent in 2017 to 68.4 percent in 2022.
“Elite recruitment continues to be based on personal friendship, if not family relationship.”
Moreover, the Kingdom’s private sector is highly state-dependent, making it less capable of growing autonomously. For example, financial facilities — such as loans and government bonds — provided by the Jordanian banking sector to the Government of Jordan constituted around 22.7 percent of the sector’s assets during the period 2010–2020, meaning the sector is highly dependent on the state and less able to provide financing to the private sector.

Similarly, the Jordanian government is currently doing business through the military. According to data from the Ministry of Industry, Trade, and Supply, 17 new companies were registered during the 2006­–2022 period with the Jordanian Armed Forces (JAF) as a partner. Eleven of these companies were registered between 2019 and 2022. These businesses, owned in part by the Jordanian military, work in the fields of equipment development, agriculture, mining, construction, real estate, and telecommunications. In this way, the government of Jordan is edging into the private sector instead of facilitating the independent growth of private enterprises.

Human capital is on the decline. Jordan’s high unemployment rate (22.6 percent) could be traced back to a number of structural distortions in the labor market. One of the main problems is declining human capital. Jordan’s score of 55/100 in the World Bank’s 2022 human capital index is “lower than the average for the Middle East (and) North Africa region”. This means that “a child born in Jordan just before the pandemic will be 55 percent as productive when she grows up as she could be if she enjoyed complete education and full health”, according to the bank.

Additionally, Jordanian school students scored below the global average on the 2018 Programme for International Student Assessment test. In other words, Jordan is not well-equipped to fill its private and public sectors with talented, educated, and innovative workers.
The government of Jordan is edging into the private sector instead of facilitating the independent growth of private enterprises
Based on these five issues, Jordan’s economic struggles cannot be reduced to regional realities and weak fiscal capacity. Many other structural issues need to be tackled by serious economic and administrative reforms that require leadership and political will. The current reform plans fall short in that they neglect the fundamentals and propose superficial economic reforms, attempting to build an ineffective democratic façade.

Without tackling the root causes of the country’s issues, such as corruption, weak education, nepotism, private sector marginalization, and political tribalism, the country will only delay a current crisis that will snowball into something much larger in the future. Jordan should expect more protests and public dissent if true, deep-rooted structural reforms are not introduced and implemented, soon.

Laith Al-Ajlouni is a Jordanian political economist. He has worked as a policy consultant for different organizations including the World Bank. Twitter: @LaithAlajlouni. This article was originally published by the Atlantic Council, a nonpartisan organization that galvanizes US leadership and engagement in the world, in partnership with allies and partners, to shape solutions to global challenges.

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