It May Be Time to Restructure American Assistance to Jordan

Since May 30, the Hashemite Kingdom of Jordan has seen a wave of massive, largely peaceful protests that have King Abdullah II in a bind. The current turmoil has forced the monarch to slow the implementation of the austerity measures aimed at rehabilitating the Jordanian economy—as mandated by the terms of the International Monetary Fund (IMF) loans—and to reshuffle the government. The king is at risk of losing international financial support if he cannot effectively reform the economy and reduce its massive debt-to-GDP ratio. At the same time, if he carries forth, King Abdullah risks escalating further the large, diverse protests in Jordan by forcing those austerity measures on a struggling population.

King Abdullah of Jordan is stuck between a rock and a hard place, as he is at risk of losing international financial support if he cannot effectively reform the economy

The protests are obviously of most import to the Jordanian king and government, but officials in the United States should be spurred to action as well. Jordan is a longtime ally and a leading recipient of US aid, so Washington has a choice: continue to enable Amman’s problematic handling of the economy and watch it unravel or move to help the country reform. But engulfing the Trump Administration’s Middle East policies, the onus is on members of Congress to promote reform by reconsidering priorities for Jordan.

 

The True Nature of US Aid

The United States is a generous donor to Jordan. Over the past few years, Washington has provided Amman with at least $1 billion per year. However, the nature of that aid may prove to be less effective than the sheer sum may suggest. According to data from the US Agency for International Development (USAID) for the fiscal year 2016 (the last full-year report), the United States provided roughly $1.2 billion in funding for numerous initiatives. But most US aid goes toward boosting Jordanian security, followed by funds to service its public debt. For fiscal 2019 year, the House of Representatives Appropriations Committee marked up $1.5 billion for Jordan.

Jordan’s security assistance has long been a priority for lawmakers because Jordan has traditionally been a reliable ally. Jordan joined Egypt in 1994 as the only Arab state to sign a peace treaty with Israel. Furthermore, Jordan has gone above and beyond expectations, working closely with Israel and the United States to ensure the former’s security. Jordanians also play a critical role in overseeing the border with the Israeli-occupied West Bank as well as Muslim holy sites in Jerusalem. All of this has proved lucrative for Amman, as Congress continues to reward it for its steadfast commitment to help keep Israel safe.

Jordan’s security assistance has long been a priority for American lawmakers because Jordan has been a reliable ally

As for non-security budgets, the State Department and USAID primarily used Economic Support Fund (ESF) capital to build responsive governance and foster political inclusion, provide humanitarian aid to refugees, and address agricultural and water scarcity problems. Despite the intent of the supplied funds, Jordan’s ESF provided significantly fewer dollars for actual economic development than for other programs. US aid overwhelmingly flows to Jordan as cash handouts to service its skyrocketing debt or finance its military, and this highlights a significant shortcoming of such a large sum of aid: neither use has impact on the average Jordanian.

After paying off debt, the majority of the remaining ESF capital is used for promoting responsive governance and political competition—but this may be just as irrelevant to those Jordanians who took to the streets. While noble pursuits, governance and democracy programs benefit a select few outside the general population, and their effectiveness is still an open question. US-funded anti-corruption campaigns have little obvious positive effect, and the years of building political parties seem irrelevant considering the recent protests, which were grassroots activism led by civil society factions and popular youth movements and not by political parties.

 

Rethinking Aid to Jordan

Members of Congress would do better to consider readjusting US financial assistance to Jordan. Amman must alleviate the pressure building in the kingdom, but it cannot, for longevity’s sake, forego the necessary economic reforms indefinitely. Therefore, US lawmakers should repurpose aid to help quell the pain of those tough austerity measures and give King Abdullah political cover in the near term. This can be done by providing assistance that specifically benefits the Jordanian economy in a manner that gives middle- and working-class Jordanians—in Amman and the countryside—the ability to earn living wages.

Most US aid to Jordan goes as cash handouts to service its skyrocketing debt or finance its military, depriving the economy of needed funds to help improve the lives of average Jordanians

Jordan’s security—and not unrelated, Israel’s security—will always take priority for lawmakers in Washington, but they should consider appropriating funds to develop the kingdom’s workforce and private sector, in the same manner as they dole out money for training and equipping the Jordanian Armed Forces or developing the capabilities of political parties. Indeed, if it is only the public sector that receives cash infusions through foreign assistance, then young Jordanians may flock to find jobs in the military or the government. This will further exacerbate Amman’s public spending problem—or, more likely, push the average citizen instead to rely on the government for critical subsidies.

It is important for Congress to identify cost-cutting measures in security and governance programs which can then be refashioned for economic development. With more money in the ESF budget, the United States can remain in the business of promoting inclusive and competent democracy, but the gross disparity between funds earmarked for governance and those intended for economic development should be examined carefully. US funds could be specifically allocated for programs that have the potential to realize tangible results for the working- and middle-class citizens. Such goals could include bolstering technical and vocational programs to give on-the-job training; investing in Jordanian entrepreneurs and small business owners who show potential for growth; assisting the faltering cooperative sector; expanding the use of enterprise funds to Jordan; and seeking to invest in financial inclusion for women. Many of these programs have already been authorized, but they should be prioritized when Congress drafts an aid package for the kingdom.

Ushering in such changes would require making decisions that could prove unpopular to the US military, the numerous contractors inside the Washington Beltway who vie for government contracts, and of course, the governing elite in Amman. However, just as the recent protests in Jordan proved to be an eye-opener for King Abdullah II and the Jordanian ruling class, they, too, should spur Congress to realize that US monetary aid to Amman, in the form it has traditionally been given, is not alleviating the struggles of the Jordanian people. To be sure, debt relief is crucial because of the stifling effect public debt has on an economy, and without security and stability, Jordanians would struggle to attain prosperity. At the same time, a wholesale reassessment of priorities is in order so that US assistance can be most effective in addressing what will prove to be a crucial issue for one of America’s closest Arab allies.

Marcus Montgomery is a Junior Analyst at Arab Center Washington DC. To learn more about Marcus and read his previous publications click here