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Jordan
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Following
World War I and the dissolution of the Ottoman Empire,
the UK received a mandate to govern much of the Middle
East. Britain separated out a semi-autonomous region of
Transjordan from Palestine in the early 1920s, and the
area gained its independence in 1946; it adopted the name
of Jordan in 1950. The country's long-time ruler was King
HUSSEIN (1953-99). A pragmatic leader, he successfully
navigated competing pressures from the major powers (US,
USSR, and UK), various Arab states, Israel, and a large
internal Palestinian population. Jordan lost the West
Bank to Israel in the 1967 war and barely managed to defeat
Palestinian rebels who threatened to overthrow the monarchy
in 1970. King HUSSEIN in 1988 permanently relinquished
Jordanian claims to the West Bank. In 1989, he reinstituted
parliamentary elections and initiated a gradual political
liberalization; political parties were legalized in 1992.
In 1994, he signed a peace treaty with Israel. King ABDALLAH
II, the son of King HUSSEIN, assumed the throne following
his father's death in February 1999. Since then, he has
consolidated his power and undertaken an aggressive economic
reform program. Jordan acceded to the World Trade Organization
in 2000, and began to participate in the European Free
Trade Association in 2001. In 2003, Jordan staunchly supported
the Coalition ouster of Saddam in Iraq and following the
outbreak of insurgent violence in Iraq, absorbed thousands
of displaced Iraqis. Municipal elections were held in
July 2007 under a system in which 20% of seats in all
municipal councils were reserved by quota for women. Parliamentary
elections were held in November 2007 and saw independent
pro-government candidates win the vast majority of seats.
In November 2007, King ABDALLAH instructed his new prime
minister to focus on socioeconomic reform, developing
a healthcare and housing network for civilians and military
personnel, and improving the educational system.
Jordan is a small Arab country with insufficient
supplies of water, oil, and other natural resources. Poverty,
unemployment, and inflation are fundamental problems,
but King ABDALLAH II, since assuming the throne in 1999,
has undertaken some broad economic reforms in a long-term
effort to improve living standards. Since Jordan's graduation
from its most recent IMF program in 2002, Amman has continued
to follow IMF guidelines, practicing careful monetary
policy, making substantial headway with privatization,
and opening the trade regime. Jordan's exports have significantly
increased under the free trade accord with the US and
Jordanian Qualifying Industrial Zones (QIZ), which allow
Jordan to export goods with some Israeli content duty
free to the US. In 2006 and 2008, Jordan used privatization
proceeds to significantly reduce its debt-to-GDP ratio.
These measures have helped improve productivity and have
made Jordan more attractive for foreign investment. The
government ended subsidies for petroleum and other consumer
goods in 2008 in an effort to control the budget. The
main challenges facing Jordan are reducing dependence
on foreign grants, reducing the growing budget deficit,
attracting investments, and creating jobs. Jordan is currently
exploring nuclear power generation to forestall energy
shortfalls. Jordan's conservative banking sector has been
largely protected from the worldwide financial crisis,
but many businesses, particularly in the tourism and real
estate sector, are predicting a slow-down in 2009.
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