Our Last Best Chance_ The Pursuit of Peace in a Time of Peril - King Abdullah II [79]
My father had left the country a rich inheritance of peace, political stability, and a strong international standing, but economically Jordan was struggling. Throughout the 1990s the economy had suffered from the fallout of Iraq’s invasion of Kuwait. Most Gulf countries had perceived his efforts to stop the war as siding with Saddam, and as a result they dramatically cut back on their aid, loans, and investments in Jordan. The return of large numbers of expatriate Jordanian workers from Gulf countries, mainly from Kuwait and Saudi Arabia, meant that we no longer benefited from their remittances, and the imposition of sanctions on Iraq hit us particularly hard, since Iraq had been our main trading partner and the principal source of our oil, supplied on concessional terms.
Economic growth slowed, and the government had to rely on foreign borrowing to underpin its spending. By the end of 1998, foreign debt had risen to over 100 percent of GDP. We would soon be unable to service the debt. Jordan turned to the International Monetary Fund, as it had done in the previous debt crisis in 1989, and in the month after I became king we secured new financial support from the IMF, which was followed by a rescheduling of our debt to the Paris Club of international creditors.
The immediate difficulty was resolved, but we needed more than a quick patch. From my time in the army, speaking to soldiers, traveling to their villages, and meeting their families, I knew that many of our people were struggling financially. My priority was, and remains, to secure a decent living for Jordan’s citizens. I set for my government the goal of laying the foundation for the strong and stable economic growth that would make this possible.
This was not an easy task for a small, vulnerable economy. Jordan has no oil and its other natural resources are limited. Both water and agricultural land are scarce. Its industrial base has never been very strong, and with a population of only four and a half million in 1999, it was unlikely to become an economic powerhouse. We would have to learn to compete more efficiently in this new era of globalization, as dismantling the barriers to trade and investment had exposed countries to ever fiercer competition for markets and investment.
I assembled a team of talented economic advisers, including Bassem Awadallah, a former investment banker and economist with a PhD from the London School of Economics, and Samir Rifai, a Harvard and Cambridge graduate and the son of my father’s trusted adviser Zaid Rifai, and asked them to come up with bold, innovative ideas to jump-start Jordan’s economic recovery. “We don’t have time for complex theories and debate,” I told them. “I just want to know the right thing to do.” They came back with a host of proposals that built on the measures the IMF’s structural adjustment program had introduced at the end of the 1980s: privatize state enterprises, downsize the state bureaucracy, end subsidies, improve education, promote innovative industries, remove trade barriers, and get the public and private sectors to work together to promote industries like information technology, pharmaceuticals, and new media.
We had a basic problem. Much of what we would do was going to be very painful in the short term. Many of the benefits would take years to be felt. And we knew all too well that the previous set of structural adjustment measures had triggered riots. Comfortable with the old ways, many people would resist change—or claim that it could not be attained.
The top priority, my advisers all agreed, was for Jordan to gain admittance to the World Trade Organization (WTO), an international organization formed in 1995 to promote free trade between countries by reducing tariffs on imports and exports. By joining, Jordan would be able to export to over one hundred countries and enjoy greatly reduced tariffs. In return, the other WTO members