Trade can improve Jordan’s economic burdens made worse by refugees
The Hashemite Kingdom of Jordan is a critical ally for the United States in the Middle East, but our foreign assistance hasn’t been focused on helping Jordan to combat its economic challenges. During a recent meeting, Secretary of State Antony Blinken and Deputy Prime Minister Ayman Safadi emphasized the importance of expanding growth and opportunities in Jordan.
These policy recommendations could enhance the socioeconomic growth and well-being of Jordanians, in order to strengthen institutions and support the steady progress of political and economic reforms: signing a longer-term memorandum of understanding; promoting the free trade agreement; extending the United States-Jordan Defense Cooperation Act; launching an enterprise fund; and reorienting our development investments through the U.S. Agency for International Development (USAID) to foster more trade between our nations.
Jordan often operates as a “translator” for the United States with the Arab world, including Iraq, Egypt, Libya, Syria, and with the Palestinians. Moreover, its commitment to the peace treaty with Israel and its efforts to counter Iran’s aggression in the region have proven crucial to advancing U.S. national security interests.
We need a strong Jordan to achieve U.S. foreign policy objectives, but Jordan’s economy is suffering, compounded by the effects of COVID-19. Recent reports indicate that unemployment has risen to about 25 percent, and youth unemployment is nearly double that. That alone is concerning, but we should not underestimate the financial burden that also arises from hosting refugees. About 34 percent of Jordan’s population is refugees from Syria, Iraq, Libya, and Yemen, as well as Palestinians, making it the second largest host of refugees per capita globally.
In the fall issue of The Wilson Quarterly, which was dedicated to human displacement, King Abdullah II wrote: “Displacement is a global moral tragedy that demands a continued international response. The international community cannot afford to turn its back on refugees and their host countries like Jordan.” He is correct, and the United States has a chance to further illustrate that we will not turn away from a key ally.
The memorandum of understanding between the U.S. and Jordan expires this fiscal year. The Biden administration will have the opportunity to sign a new memorandum to reaffirm our commitment to a prosperous Jordan, and should also embrace stronger trade and investment opportunities to promote long-term sustainability.
The U.S. signed a free trade agreement with Jordan that entered into force in 2001. However, we haven’t fully taken advantage of this agreement: Jordan ranks 17 out of 20 countries with such agreements, and is the 66th largest goods trading partner, estimated at about $3.7 billion in two-way trade with the U.S., according to data from 2019. These numbers must improve if we want Jordan to become more self-reliant.
Security and the economy go hand in hand. In 2016, under the leadership of former Rep. Ileana Ros-Lehtinen (R-Fla.), we passed into law the United States-Jordan Defense Cooperation Act, which aimed to support Jordan in combating ISIS, including expediting the sale of defense equipment to bolster its military. After the law’s sunset in 2018, we reintroduced legislation, which passed the House but not the Senate. The new version of the legislation extended the underlying security agreement and added a provision to authorize an enterprise fund for Jordan. Enterprise funds, such as those created with Egypt and Tunisia, can be instrumental in helping small and medium-sized enterprises to prosper. Such enterprises make up much of Jordan’s economy.
A Wilson Center report states that strengthening the Middle East’s “economic stability by developing a robust and competitive workforce is a key pillar of peace, security, and an effective deterrent to violent extremism.” Finally passing this legislation into law would send an important signal to the people of Jordan that the U.S. Congress is dedicated to improving their livelihoods and their country’s economic conditions.
Even though Jordan is one of the largest recipients of U.S. foreign aid, we must reorient some of our investment into creating more trade opportunities. For example, USAID has a history of investing heavily in water, health and education in Jordan. Yet, economic growth is at the bottom of the priority list, even though economic prosperity remains one of Jordan’s largest challenges. According to USAID, out of the $1.9 billion obligated for Jordan in fiscal year 2020, only $14 million was spent on business, trade and economic growth. This must improve.
It is in our foreign policy and national security interests to support a strong, prosperous Jordan. Helping American companies to tap into new markets could spur job creation and business opportunities for Jordanians and the myriad refugees. This would improve Jordan’s economic and political situation, ultimately benefiting the U.S. as well.
Eddy Acevedo is chief of staff and senior adviser to Ambassador Mark Green, president and CEO of the Woodrow Wilson International Center for Scholars. He formerly was national security adviser at the U.S. Agency for International Development and staff director for the Subcommittee on the Middle East and North Africa for former Rep. Ileana Ros-Lehtinen (R-Fla.).
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