GULF WAR, SUPPORT FOR LOSING SIDE DEVASTATING FOR JORDAN`S ECONOMY
Ray Moseley, Chicago Tribune
To understand what the gulf war did to the economy of Jordan, consider first what it did to Mohammed Nimer.
Nimer, 38, a Palestinian from the West Bank, taught school for 11 years in Saudi Arabia but made the mistake of coming here on a vacation after the gulf crisis arose.
When he tried to return to Saudi Arabia two weeks ago, he said, he was put in a Saudi jail for three days, then sent back to Jordan.
Now he waits every day outside the Saudi embassy in Amman, hoping for word that he, his wife and five children can go back to their home in Khober. But Saudi Arabia and Kuwait, angry over Jordan`s support of Iraq during the gulf war, are giving no visas to Jordanians or Palestinians, and Nimer has all but abandoned hope. He recently told a friend in Khober to sell all the possessions he left behind.
''The Saudis are punishing us, sure,'' he said. ''Politics means nothing to me. I had to leave the West Bank and go to the desert to make a life for my children, and that`s all I care about.''
He said he was arrested because one of his children, age 10, had taken a leaflet from a Jordanian mosque that criticized Saudi policy, and border police had found it in his car.
''This is freedom in the Middle East,'' he said bitterly. ''Tell Bush that is what he fought for.''
Nimer is one of 150,000 Jordanians and Palestinians who formerly worked in the Arab oil states of the Persian Gulf region and who now find themselves in limbo because Jordan backed the losing side in the war.
Their problems are personal, but part of a series of problems afflicting the Jordanian economy like a biblical plague.
Jordan has lost $500 million a year it was receiving in aid from gulf states, and has been deprived of at least $300 million in money sent home by citizens working in the gulf.
Oil supplies from Saudi Arabia and Iraq have been cut off and trade with those countries is at a standstill. Now Jordan will have to pay out at least $550 million in scarce hard currency to buy oil from Syria, Yemen and other sources.
Exports have been drastically reduced, tourism and investment have dried up, the transport industry has been crippled and factories are barely surviving. To make matters worse, poor winter rains wiped out grain crops. There could be water rationing by summer and this could further cripple farm production, which relies heavily on irrigation.
More than 20 percent of the work force is unemployed, and that figure may climb to 30 percent by year`s end, economists say. About 20 percent of households are estimated to be at or below the poverty line, defined as having an income below $225 a month.
It remains to be seen if all these problems will strain the social fabric. In April 1989 a rise in food prices and a deterioration in economic conditions touched off rioting that ended with the resignation of the government.
The economy is in far worse shape today. Economists describe its state of health as ''near catastrophic'' and ''devastating.''
Some of Jordan`s problems will ease now that the war is over. But its difficulties with the gulf states may be long-lasting, for memories there of King Hussein`s tilt toward Iraq are bitter.
A Saudi diplomat said Jordanians and Palestinians who left families behind in Saudi Arabia might be allowed to return in another month or so. But he thought it would be a very long time before others could cross the border. About 1,500 Jordanian truck drivers who used to make their livelihood transporting food and other goods to the gulf states have been thrown out of work because the border is closed to them.
But Turkish and Syrian trucks still are allowed to cross through Jordan to Saudi Arabia. Last month unemployed Jordanian drivers vented their frustration on the Turks and Syrians, attacking their trucks as they came across the border from Syria.
Jawad Anani, a former Jordanian industry minister and now a private economic consultant, estimates the economy will show a negative growth rate this year of 10 percent. Last year Jordan had a negative rate of 8 percent.
The one saving grace is the amount of aid being received from Europe and Japan. Since the crisis began, $500 million has been delivered and another $900 million promised.
''If we get all the aid that has been promised, we will only have the bare minimum needed to survive,'' said Fahed Fanek, an American-trained economist who produces a monthly economic newsletter. ''There will be no money for debt service or investment.''
Western diplomats said foreign aid was just sufficient to keep Jordan afloat from week to week. They said only skillful management by the Central Bank has enabled the government to maintain the value of its currency, the dinar.
When King Hussein attacked the U.S. bombing of Iraq and appeared to abandon previous claims of neutrality, President Bush responded by announcing a review of aid deliveries to Jordan.
Even if U.S. aid is cut off, economists said the impact would be minimal because aid levels are quite small. U.S. aid this year totals $18 million and was scheduled to rise in the next fiscal year to $55 million.
Economists said the main inconvenience of an aid cutoff is that it would require Jordan to look elsewhere for wheat supplies.
The devastation of Iraq in the war makes more of a difference. Jordan earned $400 million a year from exports to Iraq; the sales accounted for 40 percent of its manufacturing earnings.
That trade will start to come back after United Nations economic sanctions against Iraq are lifted, and Jordanian contractors may get a large share of the business of rebuilding Iraq.
But it is uncertain how long it will take Iraq to repair oil-loading facilities and resume sales of crude to Jordan. After Saudi Arabia cut off oil supplies to Jordan, Iraq for a time was this country`s only supplier.
Jordan was able to get Iraqi oil without paying cash. It simply deducted the price from Iraq`s multimillion-dollar debt to this country.
During the war, high shipping and war risk insurance rates throttled Jordan`s access to overseas markets through its port at Aqaba. Jordan`s main exports-phosphates, potash and cement-were sharply reduced.
Its national airline, Royal Jordanian, also was forced to move most of its planes to Europe because of high insurance rates, and all foreign air carriers halted service to Jordan.
Those problems are starting to be resolved.
The squeeze on exports brought many industrial plants nearly to a halt. Some firms reduced staff, and others put employees on half pay, but industries maintained at least one shift a day.
In the absence of export markets, however, goods piled up, and it will take some time to reduce stocks before full production can resume.
Some economists, such as Fanek, think it may take a year or two for foreign tourism to recover.