Jordan’s haphazard spending means stark social divide

Image copyright PA Image caption King Abdullah turned from the dictates of debt and economic dependence to wanton luxury

Jordan’s economic outlook is grim. Its soaring annual budget deficit is in the ballpark of 3% of its GDP, and yet the government has no plan to put it down.

King Abdullah’s projected budget deficit this year is in excess of 4% of GDP, while a current account deficit of at least 7% of GDP means that Jordan’s ability to borrow on the international market is rapidly running out.

Each year since the Arab Spring of 2011, Jordan has been subsidising much of its energy costs from foreign donors. To do so, it has had to pursue deficit-laden state spending.

King Abdullah followed the same model after Syria was hit by the civil war. It has run into the same debt trap that has engulfed Jordan, its Gulf allies and the kingdom’s Middle Eastern neighbours.

Image copyright Getty Images Image caption To put his country’s economic woes into perspective, Jordan is home to the only place in the Middle East where every refugee and migrant family has a home

The current account deficit has swollen because a quarter of Jordan’s exports of imported goods is fuel and fuel products, while the country is the only country in the Middle East where every refugee and migrant family has a home.

Then there are the losses of wages from the million-plus jobless. Jordan has been a major recipient of foreign aid for years, which has meant that the kingdom has turned a blind eye to its rapidly rotting private sector.

Development aid for the kingdom has been increased from $1.5bn (£1.2bn) to $2bn in recent years. This money is being used to build affordable housing in distant suburbs. The only problem is that the very abode of all the refugees in the south of the country is in the northern outskirts.

At the same time, King Abdullah’s seven palaces show that he is far from enduring his fatigued countrymen’s suffering.

He bought every single official palace in the capital, Amman, with donations from wealthy donors – Iraq, Kuwait, Qatar, Saudi Arabia, and the United Arab Emirates – as well as gifts from the British Crown.

This summer, following the conclusion of a 48-hour visit to the country by a group of British MPs, the king said in public that the MPs were “out of touch” and that he would “fight hard not to see any more aid.”

But when the MPs left, they admitted that they did not meet Jordan’s King Abdullah personally, nor any of his spokesmen.

He ordered the office of the king’s Prime Minister to reject a request for a meeting with the MPs.

Since then, King Abdullah’s official palace in Amman has started to reveal more about his extremely generous palaces.

One palace costs more than $1m a year to run. A building next door costs more than $100,000 a month.

A palace adjacent to King Abdullah’s has even been registered as a historic site in the city.

Even a space of 350 square metres allocated for a heritage listing is used mostly for personal events, such as royal weddings and state conferences.

Experts believe that the country would be better served by cutting King Abdullah’s range of palaces and letting the people take centre stage.

* Copyright: BBC

Image copyright Getty Images Image caption A recent visit to Jordan by a group of British MPs revealed the king’s palace costs more than $1m a year to run

Image copyright Getty Images Image caption A palace next door costs more than $100,000 a month

Leave a Comment