The Economic and Political Situation in Jordan - Assignment Example

Economic and Political Situation in Jordon Jordan – An Overview Jordan officially named as Hashemite Kingdom of Jordon is located on the east bank of the River Jordan. The country has been surrounded by Saudi Arabia, Iraq, Syria and Israel. It shared the control of the Dead Sea with Israel. Almost half of the land of Jordon is Arabian Desert whereas the western part of the country has arable land and forest where agricultural and farm activities have been conducted. Jordon came in to being in 1921 and the League of Nations recognized it as state under the British mandate in 1922. In 1946, it became an independent and sovereign state. In 2010 UN Human Development Report, Jordon was recognized as country of high human development. It is the founder member of Arab league and Organization of Islamic countries (OIC). Jordan is the Arab and Middle Eastern country that joined International Criminal court (Ryan, p87). Over the years Jordon has evolved as an emerging market by adopting the principles of free market economy. The economic conditions of the country are going through transformational phases due to different economic reforms introduced during different time periods. It has now evolved as an upper middle income economy of the world. In order to facilitate international trading operations within the country, Jordan has signed free trade agreement with United States in 2001 due to which the import and export duties on many goods and services are reduced between these two countries. Jordan went in to highest number of free trade agreement as compared with all the countries of its region that indicate the commitment of the country to take active part in the trade liberalization process (Piro, p14). Political Situation in Jordan The parliamentary monarchy decides the political progression in Jordon. Prime Minister is the head of the government and multi-party system in the country. The king and his cabinet possess the executive authority for all the decision making processes. The king has the authority to sign, accept or veto all the laws. He could also suspend and dissolve the parliament whereas the session of the parliament could also be extended on the orders of the king. The legislative power and authorities are held by the bicameral national assembly also called Majlis al Ummah. The two chambers of the national assembly are chamber of deputies Majlis al Nawaab and the assembly of senators called Majlis al Aayan (Knowles, p43). The chamber of deputies comprises of 120 members that are elected for the term of four years. Among 120 seats, 12 seats are dedicated to the women, 9 for Christian and 3 for Chechens/Circassian. The chamber elected by the people approves rejects and amends the legislations. It has little powers to initiate the laws within the country. The Assembly of Senators comprises of 60 members that are appointed by the kind usually for the term of four years. The assembly is responsible to the chamber of deputies and could be removed through the vote of no confidence by the chamber. The judicial system of the country is made independent from the two other branches of the government. There are three categories of the court as decided in the constitution of the country. These three types are civil courts, religious courts and special courts. The civil courts also called regular courts cover the civil and criminal cases. The religious courts work to reinforce Islamic laws and civil status in the country whereas the special courts look at the civil, criminal and religious cases at higher levels. The overall political situation of the country is peaceful and stable. Since independence, Jordon is ruled by the King with little participation of public in the political process. However, recently Jordan has expressed great awareness and openness towards democracy and several measures have been taken to add the democracy essence within the political structure of the country. Jordan was ruled by King Hussein from 1953 to 1999. He faced several challenges during his rule. He ended martial law in 1991 and also legalized the status of the political parties in 1992. Free parliamentary elections were held in 1989 and 1993 however due to some controversial changes within the election law some Islamic parties boycott the elections. The regime of King Hussein was ended with his death in February 1999 (Knowles, p43). The regime of King Hussein was not favourable for the evolution of the political system and parties because the political system was concentrated around the personality of Hussein. He ruled the country firmly and the country also progressed significantly during his regime. However, he was intolerant toward any opposition and criticism due to which the democratic system found no way inside the political system of Jordon during his regime. His decades' long tenure was full of political crisis and fluctuation including assassination attempts and Arab Israel War etc. He also faced serious threat in form of civil war with the PLO guerrillas in 1970 and 1971. However, due to favourable domestic and external situation he combats all the challenges and rules the country for over four decades. The public participation in the political process was not practiced during his regime and all the democratization efforts were conducted after his death (Mazur, p32). King Abdullah, the son of King Hussein succeeded the crown. He reaffirmed the peace treaty of Jordan with Israel and also worked to strengthen the relationships with United States. He emphasized on the economic reforms and during his regime there were several major developments took place in the country inducing several trade agreements and treaties. During his regime, King Abdullah faced some serious challenges due to the economic instability, growing population and establishment of several new political parties due to open political system. Jordon set the example of exposing the corruption cases against the people in power to discourage corruption at different levels in the country (Ryan, p87). As a result of these measures the corruption trend in Jordon has significantly reduced. Transparency International has listed Jordan among the least corrupt countries of the Middle East whereas it has been placed on 47th out of 180 nations in the corruption perception index. The constitution of Jordan has specific and strict principles to discourage corruption in the country; it states that the members of the parliament are not allowed to have financial and business dealing with the government. Despite, these measures corruption still prevails in Jordon. Though it is much lesser than other countries of the region but there is still need to improve the situation. The corruption usually took place in Jordon in form of bribery and favouritism. The anticorruption commission has been established in Jordon to examine all such cases that are later referred for judiciary (Mazur, p32). In February, 2011 King Abdullah decided to dismiss his government and initiate the Jordan’s democratization program. The political situation of the country posed him some serious challenges in form of Tunisian Jasmine Revolution and major political reformations occurring in Egypt. While responding to these changes, King Abdullah decided to initiate the process of decentralization. The nation was divided into three major regions including North, Central and South. An elected council is created for every region with the authority to handle the social, political, legal as well as economic affairs of the respective region. Economic Progression in Jordan Jordon is engaged in several trade agreements and treaties with United States, WTO and other international trade bodies. It is the member of Euro-Mediterranean free trade area and also joined the advanced status with European Union in 2010. However, Jordon has gone through decades of struggle and economic transformation to reach this position. The country has experience the decades of flourishing economy followed by shrinking economic resources and revenues however, the policies and strategies of the government has allowed the country to combat the economic challenges and at present the country is progressing towards bright path of economic development (Piro, p14). At the time of independence in 1949, Jordon was an agrarian nation. The annexation of the West bank doubled its arable land and water supplies due to which the agriculture sector was flourishing in the country and the economy was also expanding rapidly. However, when Jordon was defeated in the Six Day War by Israel it lost the control from the West Bank and thousands of Jordanians were sent back to Jordon from these areas. Due to this defeat the country faced massive shortage of natural and energy resources and its economic pace of development was also reduced. The Black September civil life changed the scenario for Jordon and after the civil war it was again on the prosperity path due to the availability of certain natural and economic resources. It was due to oil price boom in the Persian Gulf during which the Jordanian people living in the Gulf countries reinvested in real estate and other luxury sectors of their home country economy. At this time, the investment was mistakenly used in the real estate and luxuries sectors and luxury goods were widely imported from Europe rather investing upon other struggling sectors of the economy. This pace of development continued till 1980s when the emergence of Persian Gulf crisis. The oil supply on discounted rates from Iraq was seized and the amount of foreign aid from United States and Gulf countries also went down considerably (Piro, p14). This situation led to economic downfall in the country due to economic contraction. Till late 1980s Jordon was struggling with the serious issues of debt burdens and increasing unemployment rate in the country. At the time, the government focused upon the strategies to take the country out of the troublesome situation. It focused upon increasing the revenues by increasing the prices of different commodities and utilities. In this context Jordan also initiated the struggle to move towards democratization. At present, the economic situation of Jordan is progressing positively due to which it has been classified as an emerging market. The GDP per capita of the country rose by 351% during 1970s due to oil price hike after which there was slight decline in the GDP per capita during 1980s by 30% however, after 1990s the economy is gradually growing by 36%. King Abdullah after taking up the throne introduced several trade liberalization policies in the country due to which the country faced decade long economic boom. Jordon has now evolved as freest and most competitive economies of the Middle East. It has left United Arab Emirates and Lebanon behind in the economic progression (Ryan, p87). Jordon has induced several conservative bank policies to the banking sector after which the banking sector has attracted foreign investors. These policies have also allowed the country to stabilize its economy after the financial crisis of 2009. Due to the economic development of the country it is also names as “the new Beirut” and “business capital of the Levant”. During the recent years the annual growth rate of the country has reached 7% per decade that indicate significant pace of economic growth of Jordan. The strategic leadership of the royal family has worked well with the government officials to keep the country on the track of economic growth. The country is blessed with highly skilled labour force that contributes towards the economic progression of the country in positive direction (Piro, p14). Over the last few years Jordan has focused more upon the investment and exports due to which the growth rate has been stabilized. The economy is also progressing significantly because along with the economic reforms the government has introduced several education reforms to improve the education and skills level of the workforce. In addition, other measures like privatization, economic liberalization and restructuring of economy on liberal guidelines has worked to make Jordan a knowledge based economy. Though overall economic situation of Jordon looks favourable, there are some very important and serious challenges being faced by the country that is affecting its economic growth as well. The main issue faced by Jordon economy is the scarcity of the water supplies. It mainly replies upon the oil imports to fulfil energy that eventually cause it high import bills. The regional stability also poses great threats to the Jordan economy because the surrounding countries like Egypt and Tunisia have faced mass revolts that changed the ruling power and regime structures of these countries and also destabilized the overall situation of the region. The economy of Jordon also got some negative effects from these revolutions. The land of the Jordon mainly comprises of Arabia desert and only 10% of the land is arable. This portion of land is not even very fertile and the growth is subjected to the vagaries of limited supply of water. The rate of rainfall is very low in Jordon due to which it could not renew the available ground water for the purpose of agriculture. Due to this issue the agriculture sector of Jordon is not progressing very well and its contribution to the overall economic development of the country is also not very high and considerable. Jordon has several natural economic resources like potash and phosphate. The principle herd currency earnings are generated from the natural resources derivatives, tourism, foreign aid and overseas remittances. The coal reserves of Jordan are also not sufficient to meet the country needs whereas the gas reserves meet only 10% of the domestic energy needs. Before the invasion of Iraq in 2003, Jordon uses to depend upon Iraq for oil supply (Ryan, p87). The government is focused upon the economic growth through applying the principles of rapid privatization and liberalization of the economy. As a result, some urban cities are evolving as main economic hubs in Jordan like Amman and Aqaba. There are six special economic zones are created in the country that attract the foreign investment in different sector. These zones are Aqaba, Irbid, Ma’an, Mafraq, the Dead Sea and Ajloun. The industrial production of Jordon is mainly contributed by the production in different sectors like ICT, pharmaceutical, aerospace, textile and cosmetics etc. The government is focusing upon the sectors of tourism, oil shale export and ICT to get support for the economic growth in future. The telecommunication sector of Jordon is also inviting foreign investment and it is predicted that in coming years it will help to fuel the economic development of the country (Piro, p14). Conclusion It is unveiled from the above discussion that Jordon is an important country of the Middle East region. Jordon in on its way to secure democracy and free economic system due to which it has been listed among the emerging markets of the world and its relations with the democratic powers of the world have also become better. The country faces some serious issues in term of water shortage and limited arable land however, the concentration of the government towards the other sectors have allowed Jordon to attract foreign investment. There are several sectors of Jordan economy that are under the phase of significant development and in coming years Jordon would be able to evolve as a modern country of the middle east backed by the performance and growth of its tourism, ICT and telecommunication sector. Work Cited Curtis R. Ryan. Jordan in transition: from Hussein to Abdullah, New York: Lynne Rienner Publishers, 2002 Michael P. Mazur. Economic growth and development in Jordan. London: Taylor & Francis, 1979 Timothy J. Piro. The political economy of market reform in Jordan. Jordan: Rowman & Littlefield, 1998 Warwick M. Knowles. Jordan since 1989: a study in political economy. NJ: I.B.Tauris, 2005 Read More