A government supporter holds a Jordanian national flag at a rally in Amman. (Reuters file)

Jordan has long faced economic challenges, and now a convergence of political and economic factors threatens to undermine the social contract that has historically held the kingdom together. Its sporadic embrace of pro-market reforms since the late 1980s, through privatization and the monarchy’s nurturing of an urban economic elite, failed to improve living standards for the majority of Jordanians, who have seen their real income plummet.

Protests driven by socio-economic grievances grew increasingly common years before the widespread regional unrest of 2011. Although the politically-motivated opposition led by the Islamic Action Front (the Muslim Brotherhood’s political wing in Jordan) has received much attention in policy and media circles, it is the economic distress and discontent among tribal groups that arguably pose a greater threat and more complex challenge to the monarchy’s long-term stability.

insight hariri1 INSIGHT: Jordans DilemmaThese deepening grievances are rooted in Jordan’s political economy and the social fabric of the state. The majority of Jordanians are of Palestinian origin, but the monarchy has historically drawn support from the native East Bank or tribal population, which dominates the security forces and bureaucracy and depends heavily on state patronage. This support base is concentrated less in Amman and more in the rural areas and small towns of the country. Tribal support for the Hashemite monarchy allowed it to defeat serious challenges to its rule from Palestinian parties in the heyday of radical Arab politics in the 1960s and 70s. This support remains critical to Hashemite control of the state but it is not unconditional, and there are indications that this arrangement is under threat.

“The monarchy’s real dilemma is that the path to development lies in renegotiating the very foundations of the state, and challenging the sense of entitlement among the groups that have historically provided the greatest support to the palace.” – Faysal Itani, Atlantic Council Hariri Center

Jordan’s crisis stems from a tension between this bargain and the pursuit over the last two decades of partial economic liberalization, in the midst of regional instability and deteriorating public finances. Pro-market reforms are perceived as benefiting an urban and, critically, Palestinian elite close to the king, his Palestinian wife, Rania, and her family.

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King Abdullah of Jordan reviews the honor guard on his arrival to inaugurate a newly-elected parliament, Amman, February 10, 2013. (AP)

Tribal protests have largely targeted corruption, crony capitalism, and alleged favoritism. In February 2011, an important Bedouin tribal leader addressed a revealing and unprecedented letter to King Abdullah: “We call on the king to return to the treasury land and farms given to the [queen's] family. The land belongs to the Jordanian people.” There is a sense that the monarchy has betrayed the ‘real’ Jordanians, who have seen little gain from neo-liberal reforms and feel entitled to greater redistribution of wealth concentrated in Amman in the face of stagnant wages, inflation, and weakening public services. Public sector workers and military veterans have been at the forefront of this unrest and, worse still, protests have pitted the Bedouin-dominated security forces, historically focused on containing the Palestinian threat to the monarchy, against fellow East Bankers. The monarchy has responded with cabinet reshuffles and replacements, and targeted anti-corruption trials, but little meaningful reform.

The Arab uprisings have targeted elites throughout the region that monopolized political power and access to wealth. In Jordan, however, the economic elite and political support base of the regime are two distinct and indeed hostile groups. Jordan’s conundrum is that by pursuing economic reforms necessary for long-term development, it may well destabilize the delicate political arrangements critical to its stability. In addition to tenuous domestic balancing, this also places the regime in a difficult position vis a vis the foreign parties on which the monarchy depends for essential economic aid: the international financial community and institutions, whose support is conditional on continued economic liberalization, and the coalition of Sunni Arab monarchies in the Gulf Cooperation Council (GCC).

The GCC is far less concerned with economic reform but wants Jordan to support efforts to overthrow the Syrian regime, and limit the power of the Jordanian Muslim Brotherhood, who the Gulf states see as part of a growing regional Islamist threat. Yet supporting the uprising may facilitate an Islamist takeover in Syria, which would embolden and empower Jordan’s own Islamist opposition. In a sense, GCC financial support lets Jordan postpone difficult decisions about its internal contradictions, by allowing it to sustain its patronage networks and put off meaningful reforms. Like the regimes overthrown in the Arab Spring, Jordan is liable to prioritize its own immediate political stability over long-term economic development. But the monarchy likely realizes that this arrangement is untenable in the long-term, if Jordan wants to achieve sustainable and inclusive economic growth, and recognizes that GCC support will not be sufficient to offset even its immediate economic challenges.

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Protesters from opposition parties hold flags and signs during a rally against the government's decision to lift fuel subsidies, Amman, November 19, 2012. (Reuters)

It is unclear whether the Jordanian monarchy will eventually opt to balance economic growth with political stability, or if this is even a feasible option. After all, not all of Jordan’s troubles stem from its own economic mismanagement. In many ways, the monarchy has been unlucky. Foreign investment has fallen significantly since the outbreak of regional unrest in 2011. Hundreds of thousands of refugees displaced by fighting in Syria have come to Jordan, placing a substantial financial burden on the state, threatening the key tourism sector, and putting pressure on local jobs amid high unemployment. Above all, the tension between the economic options and balancing ethnic and political realities seriously constrains its policy choices.

It is easy to recommend that Jordan open up its political system, to create space and public support for difficult economic reforms like easing subsidies, decreasing patronage, trimming the bloated public sector, and pursuing wider fiscal reforms. Yet political competition, legal reform, and transparency would by definition threaten tribal domination of the security forces and the state, as well as the interests of non-tribal business elites close to the monarchy. The monarchy’s real dilemma is that the path to development lies in renegotiating the very foundations of the state, and challenging the sense of entitlement among the groups that have historically provided the greatest support to the palace. This is a perilous undertaking at the best of times, and these are hard times indeed for autocratic Arab regimes.

This post was originally published by the Atlantic Council’s Rafik Hariri Center.

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 INSIGHT: Jordans Dilemma

Faysal Itani

Faysal Itani is a fellow with the Atlantic Council's Rafik Hariri Center for the Middle East.