Economic Reform in Jordan
An Analysis of Structural Adjustment and Qualified Industrial Zones

» by Mary Nazzal-Batayneh

In the new millennium, Jordan is proclaimed to be a model for the region, a beacon of free trade and entrepreneurial spirit, and not to mention a linchpin of the Bush administration's vision for a Middle Eastern "free trade zone". Since assuming the throne in 1999, Jordan's King Abdullah has made it clear which team he is rooting for. In 2003, Colin Powell took the eager king to one side to reassure him, modifying a Rumsfeldian paradigm, that America saw him as part of "the new Middle East". In a speech to the World Economic Forum in Davos in early 2000, King Abdullah stated, "We have taken the initiative to make free markets the only norm of resource allocation". In the same year, Jordan entered the World Trade Organization, signed a free trade agreement with the United States, and in 2001, Jordan joined the European Free Trade Association. Clearly, in order to conform, and arguably, in order to survive, the Jordanian state has put forth a concerted effort to develop the kingdom in accordance with the Washington Consensus and the neo-liberal economic agenda. Over the past few decades, the Jordanian economy has experienced a series of transformations, the most pronounced changes occurring since 1998. Jordanian efforts towards economic reform have seemingly been unparalleled by any other Arab country to this day. Although perhaps still in its embryonic stage, it is nonetheless important to assess the effects of economic reform in Jordan thus far. A critical analysis that challenges official rhetoric is needed in order to evaluate the implications of these reforms on the least-empowered sectors of Jordanian society. This paper will therefore focus on two prominent interrelated areas of reform, namely "Structural Adjustment" reforms as dictated by international financial institutions and the creation of Qualified Industrial Zones. It will become increasingly clear that the official hype surrounding these reforms is misleading and incomplete. A closer inspection reveals that while the positive effects of such reforms are questionable at best, they can also provide policy-makers with an invaluable lesson: while Jordan may have to maintain its current economic agenda, the welfare of Jordanians at large will only improve if concerns for poverty alleviation, wealth distribution and political pluralism are incorporated as key components of a national plan.

© Mary Nazzal-Batayneh 2005.

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