Halpern: Is Israel to blame for Jordan’s slow economy?


I'm thinking

by Micah Halpern

Issue of October 15, 2010/ 14 Cheshvan
It’s only a wish, I know, but my wish is that Arab leaders would be more rigorous and intellectually honest when they put their arguments forward. If they were more honest, the points they try to put forth would be grounded in reality, not rhetoric.

One of the downfalls of Arab leaders within the greater diplomatic arena is their inability to paint an honest picture. It is their tragic flaw. It explains why Arab leaders, even the most enlightened of Arab leaders, will never be able to grasp and then appreciate the bountiful gains that could be achieved if real peace existed between Palestinians and Israelis.

Most recently, King Abdullah of Jordan — a rather enlightened Arab leader — blamed the economic lull in Jordan on the lack of progress in the Israeli/Palestinian peace process. The King found yet another way to blame Israel for the problems of his Jordanian people. No doubt, the conflict between Palestinians and Israelis has certain ramifications for Jordanians, no doubt there is trickle down and there may even be some minute number of businesses reluctant to invest in Jordan because of the lack of progress in the direct talks. But it is hard to believe that the hi-tech world is avoiding Jordan because Israel and the Palestinians are not yet back at the peace table. More than hard to believe, it is preposterous.

The King knows the truth, but he needs excuses and Israel is always the perfect excuse. And that explains why, at a technology conference convened in Jordan, Abdullah made his comment blaming Jordan’s slow tech growth on the tensions in the Middle East. His thesis that if there was a treaty between Israel and the Palestinians the Jordanian economy would grow is not a push towards peace, it is a rationalization for his own economic failures.

The story behind the statement is that the Jordanians recently invested $2.2 billion in hi-tech — and they wanted to see an immediate return on the investment. And Yahoo recently bought a Jordanian company called Maktoob, the largest Arab online information company.

There are several mistakes in Abdullah’s analysis.  Jordan is only indirectly connected to the conflict and although they are affected, they are not a primary party — remember, Jordan and Israel already signed their own peace treaty. More than that, most of the $2.2 billion was spent simply on infrastructure, not creative investment. Tech booms do not result from having a computer and turning it on. To create a boom you create a service that people want to buy. And Abdullah’s biggest mistake is the fact that the conflict has not slowed Israel’s growth. The Israeli economy has been outstripping even the economy of the United States over the past few years. Would the Israeli economy be even stronger if Israelis and Palestinians lived side-by-side in peace and harmony? We don’t know — we are dealing in reality, not rhetoric.

And there are several reasons to explain why Jordan’s economy is sluggish, failing and flailing. One reason is that the economy has not been infused with any real creativity. It is heavily control by the monarchy. Another very important reason is the potential for extremism in Jordan. Although the monarchy keeps a very close eye on extremism and is ruthless in stomping it out, Jordan is a natural breeding ground for Muslim extremism. Al Qaeda cells pop up all the time and there is popular support for Muslim extremist groups among the Jordanian masses. There has been and there continues to be an undercurrent of religious extremism in Jordan that frightens investors away. Investors keep away from Jordan out of fear that their property or employees will be seized by rioting anti-Western extremists. Even the virtual world of hi-tech, which can have off-site employees and equipment, is wary; to invest in Jordan means putting something concrete on the ground. Unlike Israel or even India, Jordan does not have the human capital. They do not have enough creative designers to develop new technology or enough college-educated graduates who can man call-in centers.

Jordan’s economic problems is its own. Changing Jordan’s economic output will require a major shift in the Jordanian economic infrastructure and business model.

King Abdullah of Jordan is as wily as he is smart, but this problem is of his own doing.  Neither the Israelis nor the Palestinians deserve the blame. And trust me, should Jordan pull out of this economic slide, neither Israel nor the Palestinians will get the credit. That would be wishful thinking of another kind.

Micah D. Halpern is a columnist and a social and political commentator. Read his latest book THUGS. He maintains The Micah Report at www.micahhalpern.com.