Sunday, April 30, 2006

Arab Potash Company Strike

The 2500 workers of the Arab Potash Company have been on strike for the last week. Their demands from the profitable and wealthy company are for better wages and benefits in response to the latest wave of price rises. Estimates are that the company is losing 1.5 million dinars a day, totaling about 10 million so far. Living and working conditions in the APC working area in the southern Dead Sea are less than optimal.

The APC has been in operation over 20 years, during which it has had little labor trouble. About five years ago, the government sold its controlling share to a Canadian company. As in the case of the Phosphate Company sale earlier this year, the share was undersold in exchange for protecting the rights of the workers in the overstaffed company. However, the new administration of the APC tried to get rid of its extra workers by creating spinoff companies for the production of other Dead Sea products (rock salt and table salt, magnesia and bromine). These spinoffs were failures, and the APC attempted to use their failure to get rid of the workers it had assigned to these companies. These attempts were unsuccessful (due to a court intervention), but left bad feelings between the company and its workers.

The old APC administration was generous with the local community, funding youth clubs and cultural activities. This has changed with the new administration. Of course, this has led to the souring of relations and thus a lack of good faith between the community and the company.

Today I read in Al Arab Al Yawm that the government is asking the workers to go back to work, in exchange for a chance to meet the PM (yippee) and a chance to have more negotiations. I agree with the workers reaction, which was to reject this request, and I would add that it is a shame that the government would take the side of the APC administration over the side of the workers.

Hurray for the workers on their labor day!

Friday, April 28, 2006

The "sabotaging Hamas" theory

Khader Kenaan has articulated a theory running in Amman. The basic premise is that the Jordanian government made up the story of the terror cell in order to achieve certain objectives. I have responded to this theory on his blog and I am republishing it here:

Khader: You start with two questions. The first is if it makes sense for Hamas to try and commit terror in Jordan, and the second is that if it is in Jordan's benefit to fabricate such a story. You immediately favor the idea of the Jordanian government acting irrationally rather than Hamas doing the same.

Let me play along with the idea that the Jordanian government made up the story, according to you, to achieve the following objectives:

1- Contribute to the failure of the Hamas administration.
2- Tie itself more closely to the American project, and
3- To cut into the Islamist project in Jordan.

First, Hamas will fail no matter what Jordan does. I really can't understand the logic of people crying about people conspiring to make Hamas fail. How would success for Hamas be defined? Will it free Palestine from the river to the sea? Or will it have next month's salaries? Hamas actively worked to make Fateh and Oslo fail, leading to the election of Netenyaho in 1996 and Sharon in 2000. Of course, Oslo was flawed, but it's success would have meant the establishment of a Palestinian state in Gaza and most of the west bank. So, the systematic sabotaging of the PA by Hamas had the tangible effect of denying the creation of a Palestinian state. What would sabotaging Hamas do? There is no way that a Palestinian state will be negotiated with Hamas in power.

Second, bringing up Jordan's relationship with the US in this context seems to be for emotional/propaganda value. I have not seen any US endorsement of Jordan's position, and scanning US media sources shows little interest in the story. The US doesn't need Jordan to convince them that Hamas is a terrorist organization.

Third, I would venture to bet that this entire scenario has strengthened rather than weakened the MB/IAF. Maybe it was the government spokesman's ineptitude. However, going back to the first point, Hamas is on it's way to failure without Jordan's help. The short term boost that the Islamist movement in Jordan had would have lasted as long as Hamas stayed in power (probably less than six months). If this is the reason, it would be silly to be so impatient. We could have watched the car wreck without having to get involved.


Thursday, April 27, 2006

Are the reformists back?

The appointment of Bassem Awadallah as the director of the king's office has led to some speculation as to what this means. Awadallah is largely considered to be one of the architects of economic liberalization and reform in the country. This program took a double hit in the last year, with the parliament forcing Awadallah's resignation from the post of finance minister under Adnan Badran, and a disgraceful repudiation of a series of "reform laws" passed by Badran and rejected by parliament. The National Agenda designed to codify "reform" is in a semi-coma.

Of course, reform means different things to different people. The reform associated with Awadallah and Marwan Muasher and their group seems to have been designed to help large businesses at the expense of the lower and middle classes. The paradigm advocated by Ronald Reagan (Reaganomics: called voodoo economics by George H.W. Bush) is of dubious theoretical or empirical merit. Did it work better in Jordan than in the US?

The macroeconomic data show that the economy has grown well through the last few years. Success at the macro level has not "trickled down" to most people. Businesses that took advantage of tax incentives and easing of bureaucratic requirements have not done what they are supposed to do. This is to employ large numbers of people at reasonable wages. Businesses complain that university graduates don't have "the required skills", and use that as an excuse. In reality, the types of businesses that have taken advantages of the new climate are not labor intensive.

The trend towards "microfinancing" is really an admission of failure. It's as if to say "we can't create jobs, but here are a couple of thousand dinars to open a grocery store". I'm not saying that microfinance is bad, but its effectiveness is questionable.

Back to the point. What does the return of Awadallah mean? Fahed Khitan thinks that the king wants to reinvigorate the reform movement through the office given to Awadallah. Moreover, he hints that the king might not be happy with the pace of reform, and that the reform program is the king's program, no matter what influential people in the public sector, parliament, political classes or public figures think. This is in complete contrast to Nahid Hattar's analysis of the king's letter earlier this month. At the time, Hattar said that this means that the king has repudiated the liberal economic program of the past few years.

So, which is it? Well, the director of the king's office has no constitutional role. No matter what his intentions, the only influence Awadallah will have will be derived from him speaking for the king. I doubt that he will be an effective lobbyist for the king, especially since he and his program are so controversial in the first place. Why would deputies be more impressed with him now than they were when he was appointed finance minister? There seems to be a personal relationship between the king and Awadallah, and the king wanted to give him a job which would not require anybody's approval. The reformists are not back. Yet.

Wednesday, April 26, 2006

Fire Nasser Joudeh

The ongoing drama concerning Hamas terror activity in Jordan is a public relations disaster. After failing on many counts relating to last week's announcement, Nasser Joudeh again made new announcements concerning more arrests and capturing more weapons. However, he repeats the mistake of both releasing too much and not enough information. So today he reignited the controversy without attempting to give skeptics reason to believe him. This allowed for fresh allegations that the government is lying. If the government spokesman chose to stay silent, it would have been much better. All he needed to say was that investigations were ongoing.

The entire spectacle is quite depressing, and Batir Wardam accurately expresses my feelings. We need a government spokesman who has more media savvy, or at least has more common sense.

I wonder if Fahed Fanek still thinks that mediocrity is good enough.

Monday, April 24, 2006

The losers (part IV)

Nahid Hattar's book critiques the current state of Jordan's political and economic realities. This is the fourth and final part of my review of his work. Here are parts I, II and III.

Hattar divides the Jordanian political spectrum into four main trends. These are the conservatives, liberals, leftists and Islamists. He offers some interesting insight into all of these trends.

The conservatives: According to Hattar, the conservatives represent the traditional support group for the Jordanian state. This political grouping almost by definition represents Eastern Jordanian nationalists. These consists of the tribal and bureaucratic forces, who refused to form a formal political party when they were in power up to the late nineties. The prevailing attitude was that since they were in power, there was no need to formalize this political line into a political party. Hattar believes that this political line will never return to power by appointment, and will need to reorganize itself into a strong political party to achieve this objective.

The liberals: This political group assumed greater power since Abdelkarim Kabariti Assumed the role of prime minister in 1996. The basic support for this group is from the business elites who are concerned with their own interests. Hattar believes that this grouping shows a fatal internal inconsistency because it using undemocratic (therefore illiberal) tactics to achieve its goals. This is evident from the way Ali Abu Ragheb's government passed over 200 temporary laws while freezing the parliamentary life in the country. Hattar challenges this grouping to develop a formal political party and to put forward a coherent plan for economic development of the country which will conform to the social needs of the people.

The leftists: Hattar believes that the leftists, despite their current irrelevance, have a chance to develop a strong political force in the country. This is due to the need for a counterbalance to the liberal economic influence and illiberal political atmosphere imposed by the liberals and the Islamists.

The Islamists: Hattar views the Islamist movement as having an important role in the country. This derives from the need to unite and moderate the Islamist movements in society. Another need is to provide a political umbrella for Jordanians with Palestinian heritage, although the movement contains members from all backgrounds. He derides the conformity of the movement with the wishes of the liberals, and their organizational links with Hamas. He also feels that the movement doesn't do enough to combat extremism, and the isolation of extremists.

I suppose that my problem with this analysis stems from the following:
1- The burden of finding a workable social and economic paradigm seems to only be placed on the liberals. Ostensibly, this is because they are in charge of the current economic state, and thus they should fix it.
2- I really don't find myself fitting into any of these categories. I have said that I am a centrist. I certainly don't think that the conservatives represent me, as their program would revolve around a system of patronage and social corruption. They failed in the past, and have no program for the future. Moreover, my centrist tendencies are inclusive. The leftist movement is still a potential without real form. The liberals are greedy capitalists who don't care about the rest of us, although a progressive social agenda might give them some redemption. As for the Islamists, well, don't get me started.

Anyway, as I said before, it is an interesting read, and I think that its publishing at this point is timely. If you are interested in the political situation in Jordan, no matter what your political tendencies, I encourage you to read it.

Saturday, April 22, 2006

Yes, the government is to blame too

The entire dealing with the Hamas terror cell was a fiasco. The greatest blame for the latest events lies with the people trying to sew divisions and uncertainty in the country. They were certainly aided by the incompetent handing of the affair by the government. Therefore, the lack of credibility of the government does not reflect on itself alone, but threatens the social fabric of the country. The government shot itself in the foot and gave Hamas a PR victory.

Batir Wardam first pointed to this problem, where he suggested that the lack of evidence makes the story easy to shoot down. To me, the government made four fatal mistakes in handling the media aspect of this issue.

First, they chose the wrong time. The scheduled visit by Mahmoud Zahhar at the time was cancelled, and people naturally assumed that the announcement was an excuse to get out of meeting with him. This was reinforced by later statements by Nasser Joudeh, who said that this is not the first time that they have caught Hamas members trying such antics. The natural reaction was, well, why did they choose THIS time to make the announcement?

Second, they gave too little data. Now, if they weren't prepared to provide any information, because of security issues, then they shouldn't have made the announcement in the first place. The PM chose to only meet with IAF deputies to tell them details about the case. Doesn't everybody else deserve to know the details? Or are IAF deputies more trustworthy than the rest? Are IAF constituents more important to convince than the rest of us? I really couldn't understand the message that the government was sending.

Third, they didn't check out Jordan Planet. If they had, they would have learnt the extent of their PR problem, and maybe tried to rectify it. Omar Kullab at Al Anbat is right to complain about the one-sided coverage of the issue on Jordan Television. It's as if the government has never heard of Al Jazeera or the internet. Did they think they could monopolize the story? They could have used JTV to refute the allegations against them through dialog. It would have made great TV.

Fourth, they didn't know what their objective was. This is clear from the amount and timing of their release of information. If they wanted to reveal a terror plot, they surely would have put enough convincing cards on the table to start. If they wanted Hamas to back off, they should have used back channels to get their message across. Joudeh's vague announcement about the Gaza meeting seems to reflect a desire for Hamas to back off. Why the entire hullabaloo then?

I sometimes wonder whose side the government is on.

Friday, April 21, 2006

The enablers

While the statement by the government spokesman last Wednesday about the meeting in Gaza is open to various interpretations (check the comments on that post), nobody now is arguing that the government caught Hamas members who smuggled weapons into Jordan. I feel that the Hamas' non-comment on Joudeh's latest statement and their silence on the subject since then are indicative. But, this is might be an arguable assumption.

Debate since the statement has dramatically shifted from whether the government fabricated the story to whether this is a rogue operation or was planned by the Palestinian government. Hilmi Asmar at Al Dustour suggests that maybe a third party is trying to create trouble between Jordan and Hamas. He is clearly grabbing at straws.

It would be idiotic to assume that Hamas would come out and admit that they were officially behind this operation. The rogue operation story gives everybody an easy way out. But is it true?

The essential premise behind the rogue operation story is that Hamas wouldn't be so stupid as to jeopardize their relationship with Jordan this way. This is silly. There are no relationships between the Jordanian government and Hamas, and Jordanian officials have been cool about them since their winning the Palestinian legislative elections last February. Sure there have been some protocol letters and statements, but it is no secret that the relationships between the two parties are bad. So, what would Hamas be risking? Given that large segments of Jordan's population and in the Arab world would tend to believe a Hamas denial over a Jordanian government statement (yes, they realize that), there is little risk of alienating anybody but an already antagonistic Jordanian government and whoever might believe them.

What does Hamas have to gain? First, they are in a position where they have nothing to lose. They are broke and isolated. Instigating a change to an Islamist government in Jordan would clearly help to break their financial and political isolation. Moreover, such a change would help to break the isolation felt by Syria and Iran. Iran isn't funding Hamas and Syria isn't supporting them for altruistic reasons. Only the most naïve would believe that.

So, Hamas had nothing to lose and everything to gain. The worse that could happen would that they would have to blame everything on a rogue operation. Unfortunately for them, their supporters in Jordan showed their hand too quickly and aggressively. Now it is clear that the MB is more closely aligned with Hamas than ever. They shouldn't be left off the hook, and Jordanian society should deal with these opportunists. Thier knee jerk defense of our enemies is what emboldens them in the first place. Of course, the government of Jordan, timid as ever, will let them get away with it.


Wednesday, April 19, 2006

Hamas admits involvement

The latest statement by the government spokesman, Nasser Joudeh, describes a meeting between the political advisor of the Palestinian prime minister Ahmad Yousef, the spokesman for the Palestinian government, Ghazi Hamad, and the head of the Jordan representative office in Gaza, Yahya Qarala. The issue was the planned terrorist operations foiled in Jordan.

According to Joudeh, Ahmad Yousef stated that "they are searching and investigating the issue of these weapons to learn how they entered and the individuals behind this operation".

The Palestinian spokesman added that Hamas rejects intervention in Jordanian affairs, and they want the relationship to stay strong.

Ghazi Hamad stated that what happened might have been done as an individual act (so much for Hamas discipline), and also said that targeting Jordan was not Hamas policy. How nice.

So, a face saving solution is reached. The terrorists acted individually.

Anyway, where is everybody who said that the government was lying?

Please note my new slogan at the top of the page.


The losers (part III)

Nahid Hattar's book (the losers) contains other issues which the author considers to be indicators of an undemocratic usurpation of the economic and social course of the country. The last post on the subject reviewed five of these, and herein I will cover the rest. If any reader has more information about these issues, I will be happy to read your comments.

6- The cooperative movement. Actually, the book contains little to explain the background of the issue. Reading of the section suggests that the government somehow undermined the cooperative movement in Jordan to the benefit of establishing Irada. The implication is that funding that used to go to the coops has been diverted to this project. One specific claim is that the government imposed the sales tax on cooperatives.

Cooperatives are meant to be ways of pooling individual savings to the benefit of the member of organization, for the purpose of investment. So, while lofty in their goals, they are not charitable organizations. This 1999 document describes the state of affairs at the time. It states that
In 1995, in an effort to reduce public expenditures, GOJ dissolved the ineffective parastatal apex body, the Jordan Cooperative Organization (JCO), and replaced it with the Jordan Cooperative Corporation (JCC). To a large extent, however, the change was only in form. Like its predecessor, JCC has continued to consume large amounts of public funds, but it has not been successful in strengthening the cooperatives or in providing them with effective services. The failure of the Jordan Cooperative Bank (JCB) resulted in the termination of JCC's commercial services, which in turn forced most of the agricultural cooperatives to suspend their operations. Although the enactment of new cooperative legislation in 1997 was intended, at least in theory, to lead to a reduction of government involvement, in practice, the cooperatives continue to be tightly controlled. This is due to the climate of dependency created by several decades of subsidized programs (with the resulting sense of insecurity among the cooperatives when the subsidies were discontinued), and the continued operation of the state agencies established to control the cooperative sector.

In essence, the government seems to have decided to lift the failing organizations off of life support. I know that there are still cooperatives out there, so the government didn't cancel these organizations, but lifted subsidies off of the failing ones.

Irada seems to be an attempt at stimulating small businesses to start and grow. I can't imagine why anybody would be against the principle, or why this program represents competition to the coops. While there is merit to the argument that supporting the coops with government funds might help poor families who otherwise would have no source of income, this argument might be held for any small family business. Does Hattar want to insure all businesses against failure?

7- The professional syndicates. Hattar explains how the government has been working to "professionalize" these syndicates, as their political activities (such as fighting "normalization" and organizing events for Iraq and Palestine" are both beyond the scope of their mandates and contrary to the stated positions of successive governments. Moreover, he suggests that the objective of these efforts is to control the vast funds which are held in the investment portfolios of these syndicates.

The premise is that the syndicates are using their political activities to "protect their political and organizational independence, and to protect their money". I find this difficult to understand. Since these same activities are the excuse that the government is using to undermine the organizational and financial independence to these syndicates. If the unionists want to remove the government's excuse, they would simply refrain from their political activities.

The role of professional syndicates is to improve the living conditions of their members and to advance their professional skills. The "black lists" that were issued in the past by these syndicates, libeling people and companies which supposedly dealt with Israel, were illegal and unconstitutional. Moreover, these efforts were totally outside the mandate of these syndicates. These black lists harmed many people who had no business dealings with Israel, and hurt trade relations with Arab countries. I am not surprised that Hattar avoided the embarrassment of mentioning these black lists and their harm to the country.

9- Press freedom. Hattar highlighted a statement by ex-interior minister Awni Yervas, who once said that the parliament was wasting the government's time (when they were fighting the Badran government), and that press freedom should be within the bounds of decency (and not the law, as the constitution stipulates).

Don't ask me the moral of this story. I don't know.

10- The attempt to control the monies of the Social security fund. Here Hattar relates the story of an attempt to delegate the investment arm of the SSF (with a 4 billion dinar portfolio) to an independent entity which would largely be controlled by the private sector. He correctly points out that it is the workers money that will be controlled by representatives of their employers. While the idea was scuttled under the pressure from many forces in society, many people are worried that the social security monies are not administered correctly. I agree with the point that this trust fund should be run with the utmost integrity and transparency.

11- Freedom of the press. Hattar rails against an American initiative to support "community press", which he feels is an attempt to divide society along regional, ethnic and gender lines.

Apparently Hattar believes in the freedom of the press as long as he agrees with its contents.

The conclusion I draw from these examples is not particularly compelling. It is true that Jordan has gone through a period of economic liberalization conducted through undemocratic decision making processes. However, nobody in the political parties or the press (including Hattar) has been able to formulate a coherent alternative. Many of the arguments presented are poorly presented, lack intellectual rigor, use partial facts and lack internal logical consistency.

Hattar does a better job mapping out the current political scene in the country. I will describe that in the next post on the subject.


Hamas paying its dues

The Jordanian government has announced that "missiles, explosives and automatic weapons were seized in the last couple of days along with Hamas activists who had managed to smuggle such dangerous weapons into the country." Moreover, the government spokesman, Nasser Joudeh declared that "The security apparatus also monitored the movement of Hamas members in Jordan at different stages to reconnoiter some vital targets in Amman".

The government didn't say where the weapons were smuggled from, but I would guess that it is our sisterly neighbor to the north.

I hate to be able to say that I expected this, but I did. It looks like the 50 million Iran gave to Hamas came at a price.

Tuesday, April 18, 2006

The losers (part II)

Hattar offers some examples of indicators that his premises are correct. These are found in chapter 3 of the first part of his book. Some are compelling and deserve consideration, and others are less so. I will list them all in the order that he gives them and relate my feelings about his arguments.

1- Training of Iraqi police. Hattar believes this is a prime example of the abuse of the reputation of the country to the benefit of the private sector, and to the disadvantage of the long term interests of Jordan. Training of Iraqi police was contacted to a company in Jordan, but only 3% of the value of the contract will go to the treasury. Hattar argues that this training is detrimental to Jordan because it helps legitimize American occupation of Iraq and any puppet government that will emerge from this occupation. Moreover, it will alienate the nationalists and the Sunnis, without gaining allies in other segments of Iraqi society. The basic argument is that tactical motives outweighed the strategic interests of the country's.

In my opinion, the Jordanian government didn't want to repeat the disastrous mistake it made in 1990-1991, when the pressure of popular opinion led to the taking a neutral stand in the Iraq-Kuwait conflict. This stance led to loss in economic aid from the Gulf, the expulsion of 300,000 expatriates from Kuwait and the other Gulf countries and a five year blockade of Aqaba. Honest differences of opinion might emerge as to whether we took the correct stance, but to claim the Jordanian position was taken simply to benefit a local commercial group is a stretch.

As for why the contract was not given to the Jordanian military, I suppose that the party that awarded that contract is responsible for this decision, and not the Jordanian government.

2- Freedom of speech and the lack of responsiveness. Here Hattar highlights the fact that decisions such as the allowing of training of Iraqi police in Jordan and the delegation of the Abdali area to the late Rafiq Hariri have been subject to questioning and criticism. These questions and critiques have been allowed, but no effort has been made to explain the circumstances and details of these deals (as Hattar says "say you want, and we will do what we want"). Here Hattar raises an important point, which is repeated throughout the book. The point is that the desire for economic liberalization has led to the use of undemocratic approaches. Here I must agree that any government committed to political reform (which is clearly different than economic reform) should be more forthcoming about such questions, especially when the questions are of a financial nature. The lack to transparency about these and other questions and the government's ability and desire to cover them up cast a shadow about the true intentions of "reformers". I have written before about such shadowy reform behind closed doors, and so I must agree that this is an important point that merits consideration.

3- Leaking of the Tawjihi questions. In 2004, leaking questions from the general high school examination board to private schools made headlines in Jordan. This examination literally determines the academic future of a high school graduate in Jordan. The questions were stolen and sold to private schools. These schools are interested in having their students get good grades, as it makes them more competitive and allow them to charge higher tuitions. Hattar blames this event on "Privatization, the mentality of privatization and the ethics of privatization". The argument is that since education has become a business, then it is logical that everybody involved wants to make money off of it.

I find the argument disingenuous. At one point, he defends the government bureaucracy as an alternative to the corruption and greed of the private sector. Here, he concedes that it is government employees who stole the questions, but it is not their fault. The bad old compradors made them do it.

4- Freedom in the University of Jordan. Here Hattar highlights student fights in the university. He claims that these are the manifestations of political repression of students, which forces them into adopting regional and tribal values rather than nationalist ones. The point is that students who are involved in such fights are not responsible for their actions and thus should not be punished.

The lack of a refined political culture in the university is largely due to the administration's desire to fight the Islamist movement, not by engaging them in intelligent discourse, but by using sectarian divisions between the Islamists (who are largely of Palestinian origin) and the tribalists (who are mostly East Jordanian). Ali Mahaftha believes that the blame can be spread over both Palestinian and Jordanian politicians. Moreover, Hattar blames the disinterest of university faculty in engaging and polishing the ideas of their students through constructive activities is also a factor in this issue.

I believe that Islamists should be engaged and debated, instead of using crude sectarianism to isolate them. Thus, I would agree with the second premise of Hattar. However, in the final analysis people should be held responsible for their actions, and should be punished as a disincentive for other people to behave in violent and destructive ways.

5- Trade in contaminated scrap iron from Iraq. Here Hattar tells the story of scrap metal imported from Iraq which was apparently contaminated with depleted uranium. The metal was imported and stored in Muwaqar (east of Amman) and later shipped through Aqaba out of the country. The government has not been forthcoming about this, and the Jordan Atomic Energy agency has a credibility problem. Since this is a technical issue, I would say that in the absence of real data it is hard to make a judgment about how serious this event was. Clearly, more transparency by the government would be helpful in such cases.

There is more. Stay tuned.


Monday, April 17, 2006

The losers (part I)

Nahid Hattar has written a book titled "The losers: can the rules of the game be changed?", which seems to be a bold attempt at articulating a new leftist nationalistic view. This in contrast to the globalized capitalist paradigm which is currently the model being adopted in Jordan. It is a very interesting read that has been drawing a lot of attention. Ibrahim Gharaibeh has a short synopsis of the book here (in Arabic). The book was a subject for a seminar, in which deputy Mamdouh Abbadi and journalist Fahed Khitan, who discussed many of its contents. It is clear that this work has invigorated the leftist movement in Jordan. What does Hattar have to say?

The first part of the book is the subject of this post. The basic premise of the book is that the economic and social agenda of the country has been taken since 1996 over by business intermediaries (compradors), who have formulated policy in order to achieve multiple purposes. These revolve around the creating economic incentives for large scale foreign companies. In doing this, the compradors, who Hattar estimates to include 2% of the country, have worked at dismantling the political, social and economic bases of the state for their own benefit. This was done to the detriment of the remaining 98% of people (the losers).

In order to achieve their agenda, the compradors worked systematically at the privatization of the country's assets, the weakening of the traditional base of the Jordanian government, the withdrawing from government's traditional role in creating infrastructure and delivering health and educational services. Hattar calls this "the non-state strategy", in which he sees the strategy being the surrendering the role of the state to the private sector, which has neither inclination nor incentive to fill the void created by this withdrawal. The result is the marginalization of the traditional components of the Jordanian society to the benefit of the new business class. He further claims that this agenda is enabled by the Muslim Brotherhood, who passively supported Adnan Badran's government as it was being attacked for including Bassem Awadallah and his economic team. The implication is that the MB can more easily impose its social agenda on an impoverished society than on an economically healthy one. The entire process was done through a series of undemocratic means, as there was no way that such an agenda would have met with the approval of the Jordanian people.

Hattar offers a vigorous defense of the public sector of Jordan, calling for empowering and revitalizing it, as a precursor to reversing the agenda of the compradors. He claims that "it is not bloated- as is claimed-, and if is it weighted by more employees than are needed, then this is for social and political reasons" (page 62). He papers over the fact that the 1989 collapse of the Jordanian economy, which opened the door for this change in economic approach, occurred under the stewardship of the traditional bureaucracy which he is calling to re-empower.

Yet, despite these weaknesses, there is a lot of important information and insight in this book. Anybody interested in the recent history of Jordan and its political and economic future should read it.

I will have more later.


Sunday, April 16, 2006

Oil shale exploitation

The increasing high costs of energy have led to great interest in the use of oil shale in Jordan. Questions concerning the economic and environmental viability for using this resource are core questions to be answered when assessing when we should start to exploiting it. An important document by the late Yousef Hamarneh explaining the important issues concerning this subject is posted on the Natural Resource Authority website.

Oil shale is a sedimentary rock (in Jordan it is mostly limestone) that contains high concentrations of organic materials. The organic content of these resources hovers around 10% by weight. These rocks are present as part of a belt extending from the Yarmouk River in the north to the Jurf al Darawish escarpment to the east of the town of Shobak (map). The amount of energy tied up in these deposits can literally last us for hundreds of years at our current consumption levels.

There are actually two approaches to exploiting these deposits. The simpler but less economic way is direct combustion, where the oil shale is thrown into furnaces to generate electricity. The more interesting approach is trying to extract the hydrocarbons for use as conventional crude oil (retorting). It is estimated that retorting of oil at the Lajjoun site alone can yield 50000 barrels of oil a day for a period of 30 years. Since the retorting process is not 100% efficient, the residual rock material might be used for direct combustion and power generation. This has been estimated to have the potential to generate 350 MW of electricity. The major environmental concerns related to both approaches are related to the high volume of ash residue, relatively high sulfur contents in the organic material and the need for water in the retorting and cooling processes. While challenges, the obstacles are not insurmountable

The majority of studies relating to the viability of use for these resources were conducted in the1980's. At the time, petroleum was still cheap and we were getting much of it for free. Had we started mining the Lajjoun mine at the time, the resource would now be close to depletion. The NRA report suggests that the cost of a barrel of oil extracted in this way (in 1998 dollars) would be about 22 dollars. While this number might be significantly larger now, it is probably substantially lower than the current 70$ per barrel at which oil is now sold.

World oil production has either peaked or is close to that point. This means that while demand continues to increase, the ability to produce more oil is not there. Petroleum prices will continue to rise from now on, and there is no choice for the world but to adjust to this new reality. This means more efficient use, and looking for new resources, be they renewable (such as solar and wind) or non renewable such as our oil shale. This will happen because the world energy situation dictates it.

Saturday, April 15, 2006

The King's message

King Abdullah sent a letter to the prime minister last Thursday, on the occasion of the raising of fuel prices. The King thanked the Jordanian people on the understanding they have shown in dealing with this blow. The letter also outlined three priorities which he feels to government should deal with to enhance social justice and economic well being.

The first priority is a more equitable tax system. Specific goals were given. These were making the wealthy carry a higher load of the tax burden, stopping tax evasion and increasing the efficiency of tax collection and at the same time not harm investment.

The previous government passed an income tax law under the guise of tax reform. The reform actually lowered taxes on the rich and increased taxes on the middle class. After going through a lively constitutional process, the law was overturned. In the end, the current prime minister vowed to prepare a new law which would be more equitable. It remains to be seen whether this law will target the middle class again or not. However, many people are more concerned with the issue of tax evasion. The current system allows exact taxation of employees, whose income can be determined simply by looking at their pay slips. Many self employed business people make much more money, but of course can and many do underreport their incomes. This issue is troubling, and most people are skeptical that wealthy merchants and other business people can be made to pay what they owe. In other countries, tax evaders run the risk of being sent to jail. This is not the case in Jordan. So, any real tax reform should concentrate not just on mathematical studies of income distribution, but on actually having the legal tools and the political will to enforce a fair tax code. To be honest, I am skeptical about this.

It is true that high taxes are a disincentive to investment. This is a tricky issue, but I would say that not all types of investment deserve tax incentives. Banks, most real estate projects and shopping malls are lucrative enough to attract investors even if they are taxed according to the code. On the other hand, labor intensive agricultural and industrial projects should be encouraged on the condition that they hire Jordanians and compensate them fairly. Few of the investment projects that we are seeing would qualify.

The second priority in the letter involved better mechanisms to help the poor. There are multiple agencies responsible for aiding the poor, and the lack of coordination between them allows for abuse and waste. The King also emphasized the need to continue with microfinancing of small businesses, as this is a better way to help low people help themselves. There are many success stories related to such endeavors.

The third priority is to look for new energy sources. There is much talk about the use of oil shale as an energy source, and the economics of this are still not clear. The world energy market is tight and will grow tighter in the future. Therefore, an imaginative and bold approach would include more investment in exploration for oil, expanding use of solar and wind energy and even consideration of the use of nuclear energy.

The Jordanian economy has been doing well on a macro level for the past few years. However, most people realize now that macro level success is of little importance if the distribution of wealth is not equitable. Nahid Hattar believes that the letter indicates an important shift in the policy of the king. He calls it a "total reevaluation of economic and social policy" and "an end to liberal economic policies". I wouldn't go that far, but we need to wait and see how this letter is translated by the PM.

Wednesday, April 12, 2006

Facing up to nonsense

I have repeatedly complained about how timid everybody in Jordan is about confronting even the most outrageous nonsense coming from Islamists. So, it was refreshing to read this article written by Tariq Alhomayed in Al Sharq al Awsat and reprinted in Al Ghad. Alhomayed highlighted an outrageous assertion by Zuheir Abu Ragheb, an IAF deputy, who claimed that the raising of the prices of fuel could have been averted by raising taxes on alcohol and tobacco.

The math works like this: The savings due to the rise in fuel is estimated to be about 420 million dinars. The average Jordanian family spends 218 dinars on cigarettes and 1.6 dinars on alcohol. There are about 1 million families in Jordan. So, 218 million is spent on tobacco and 1.6 million is spent on alcohol.

Obviously, alcohol is not consumed in a large enough amount to make any difference. The only way to collect the 400 million needed is to triple the cost of cigarettes, assuming the consumption levels stay the same. However, if this happens, two things will happen. People start smoking less (which would be good but won't help the budget), and more smuggling will take place to take advantage of the price difference. In either case, raising cigarette taxes will not help the shortfall.

But, who says that politicians need to make sense? As long as it is what people want to hear, then it is all good. The budget can be balanced by raising the cost of a bottle of beer by 30000%, and all those boozers can pay the oil bill for the country.

Back to Alhomayed, who eloquently points out that the only reason the IAF is making this "proposal" is to embarrass the government, using simplistic emotional arguments. He also makes fun of the new Hamas government, which is talking about the danger of singing and dancing, since they can't do anything tangible to help their economy or free their people and land.

I hope that the taboo against criticizing Islamist nonsense continues to disappear. It is about time.


Monday, April 10, 2006

Demonizing Zerqawi/ Demonizing Jordanians

A very interesting article on MSNBC discusses a deliberate attempt by the US military to overemphasize the role of Abu Musab Zerqawi in the troubles in Iraq. While I have no problem with highlighting the damage this criminal is doing, I am concerned by a deliberate attempt to foster xenophobia in Iraq for this purpose. The article states that one goal of the media campaign is to "Villainize Zarqawi/leverage xenophobia response". Since the US wants to demonize the resistance by overemphasizing the importance of Zerqawi, one must wonder if they actually have incentive to catch him at all.

Now, Jordan has had trouble dealing with the complexities of the situation in Iraq, at time suffering attacks on it's embassy in Baghdad, having staff and private citizens kidnapped and finally terror attacks by Iraqis on Jordanian soil. So, in the midst of this situation, the US military is trying to elicit anti foreign response for the purpose drumming up support for their occupation of Iraq. Since we are the foreigners in question, and since we are supposed to be allies in this idiotic "war on terror", I find this to be outrageous.

Now, the fact that Ahmad Chalabi and the Iranians have issues with Jordan and are trying to make use of these issues for political gain is well known and can even be understood in the context to the political situation in Iraq and the historical background that surrounds these relationships. But now we find out that the Americans are playing this game as well. Since so many people are trying to villainize Jordan and Jordanians across political and sectarian lines, it must become difficult for the average Iraqi not to conclude that the bad guys are us. I guess that the only exceptions are the million Iraqis now living in Jordan.

Anyway, since the US is actively fostering xenophobia in Iraq, I believe that it must acknowledge and bear responsibility for the results. Specifically, the mistreatment of Palestinians in Iraq is probably a direct result of this effort. Of course, Human Rights Watch wants to lay the burden of their attempt to flee on Jordan's shoulders. Talk about adding insult to injury. Fellow blogger Issam is right in saying that this is not our responsibility.

I believe that the US government owes Jordanians a public apology for this. The government should accept nothing less.

UPDATE: The article mysteriously disappeared from the MSNBC web site. A jist of it is in the Gulf Times, along with a denial by the US military.

Sunday, April 09, 2006

Fuel rises again

The government has been preparing people for a while for a new rise in fuel costs (or what they euphemistically call lowering of subsidies). Ever since the last raise in September, it has been clear that this is on the way, to the point where some columnists called for raising the prices already. Well, last night they did just that.

The extent of the rise is what is shocking to most people, with the cost of diesel and kerosene going up by 43% from 22 piasters per liter to 31.5 piasters. There were also hefty raises in the cost of gasoline and liquefied petroleum gas. This issue is the subject of most conversations I have been involved in today.

If fact, this price rise will have serious effects on the cost of living for most people, despite the compensations which the government has set aside for lower income individuals. The formula is complex, but the bottom line is that the poorest families will get a maximum 150 JD per year. I have argued before that this will do little to help the poor, and other ways of spending the money might be more useful.

Anyway, the IAF tried to take advantage of the unhappiness by organizing a series of demonstrations. While the response to the call for the demonstrations was termed "good" on their web site, there is no definition of what good is. The web site complained that the authorities forced the dispersion of the demonstrations. It seems that the effort was a dud, because nobody I have spoken to even mentioned that there have been demonstrations.

Meanwhile, the labor movement took the side of the government, saying that the rise in prices came in the framework of the higher national interest, and criticized those who have "special agendas". They also hinted that they want the government to raise the minimum wage, presumably as a payback for this stand.

In reality, people understand the mathematics behind the need for this. Nevertheless, they are anxious about the implications of this rise. As I said, people will be hurt by this.

What people still don't understand is why there has been this drastic cut in Arab and foreign aid to Jordan, despite all our efforts to please the "powers that be". What do they want from us?

Wednesday, April 05, 2006


One of the constitutional mechanisms at the disposal of MP's is called the istijwab (questioning), which is guaranteed under article 96 of the constitution. If an MP has information which he or she needs to verify, they can submit a written question to the government, which must be answered by the relevant minister or official.

Typically, this right is used to hassle the government about something that the deputy knows already. In any case, little ever comes out of these queries. This may be due to two reasons. The first is that some questions are based on false information and the issue can be refuted by the government. The second is that these queries are based on real information, and the deputy wants to extort the government into hiring a few of his relatives or some other narrow achievement. In these cases, the issue is dropped as the deputy is rewarded to close the issue.

Typically, heavy weight deputies tend not use this mechanism very much, as they have access to information through personal methods, and like to use more subtle approaches to get what they want. So, I was surprised to read in Al Shahed today that MP and former prime minister Abderaouf Rawabdeh had sent a query to the government concerning the so-called e-government project. The story is not on-line, so you need to trust me or go out and buy issue 298 and look at page 10.

Anyway, Rawabdeh's inquiry concerned "The e-government project, what is it's status, how much has been spent on it, how much has been achieved, how delay there has there been and who is responsible for the delay".

The reply of the minister of communications and information technology seem to have confirmed Rawabdeh's insinuation that something was wrong. In 2002, 41 million JD was spent on the project; 13 million in 2003; 26 million in 2004 and 45 million in 2005, adding up to about 125 million JD's over the period (the total debt of public universities is about 100 million JD). What do we have to show for this money?

According to the minister of C&IT, the achievements are the completion of the second phase to introduce the interrelated electronic service package for the next three years. Please leave a comment if you figure out what that means. They are also working out the strategies and standards within the technical services project. Yes. They have spent 125 million dinars and still haven't chosen their standards. There is a government directory project, the activation of the public communications center and the HQ of the e-government. Twelve government agencies have been linked together and 7700 employees have been trained to use computers.

Now, it seems that we are no where near being able to get any government service or license through the internet. So, what we essentially have are websites for most government agencies. Presumably, government agencies can exchange information easily over their network.

The minister's answer also has a list of reasons for the tardiness in execution. These include the lack of technical expertise, the lack of relevant legislation, and the low budget given to the project, among others. Low budget. Imagine. 125 million dinars, no tangible achievement and the reason is that not enough money was spent. I think we were ripped off.


Sunday, April 02, 2006

Who can afford a house?

The last couple of years have seen astronomical rises the prices of real estate in Amman and major cities in Jordan. While the reason for this rise is not clear, it's effects on young families looks to be profound.

Moderately priced apartments are difficult to find, with most easily falling into the 70000 JD range in Amman (Examples here) and 50000 JD in Irbid and Zarqa. Of course, within Amman, the idea of a small house is out of the question for most people. The department of statistics says that more then 70% of housing units in Amman are apartments, with more single housing units in other areas.

Now, the question that is being asked is how can people afford these prices, given that the average income of a Jordanian family is less than 6000 JD's a year, with average food expenditures of 2200 JD's, 1600 JD for housing and 800 JD for transportation. Essentially, it would be impossible to live a standard life with this level of income and to save a substantial amount of money. Payments for a bank loan for the total amount (assuming that it is possible to get one) would be more than the total income of the average Jordanian.

The number of new families established in Jordan in 2004 was about 54000 families, requiring that number of new homes. The government builds about 6000 units pr year for low income families at affordable prices. This hardly creates a dent in the demand. Moreover, rents are rising as well, with most Jordanians preferring to own their own home.

Most investors in the housing field blame rising costs for land. This rise in costs has led to the sprawl of the city towards the west, north and south, where prices were previously lower. It looks like further outward expansion would be difficult, and would stretch the transportation, water, sanitation and energy infrastructure even further. An obvious approach is to concentrate on areas outside Amman. Madinat Al Sharq is an ambitious project to develop a model city east of Zarqa. The project is envisioned to house about 500 000 people by 2025. However, as the web site describes the project, it is aimed towards "middle and upper income housing". Presumably, prices will be lower than in Amman, although enticing people to move to Zarqa will probably be challenging. It seems to me that the only reasonable approach towards the dilemma we are facing is to encourage growth outside of Amman. While this will be difficult, it is a national challenge. To make it work, we will need to invest heavily in modern public transportation systems. The current state of affairs will not be conducive if transportation ends up eating up significant parts of people's income.

As for young families, it looks like their options will stay limited. These will include smaller apartments, in more remote and less desirable areas. If the transportation system stays the way it is, even this will not be an option.