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As War is Waged Against Iraq, Jordan Manages Difficult Balancing Act - 2003-04-07

As the war in Iraq continues, Jordanians are increasingly concerned about its impact on their economy and politics. Jordan has joined Arab attempts to resolve the crisis peacefully, but no clear plan emerged from their efforts.

Anti-war protests have become a weekly routine in Jordan, as scenes of battles and devastation in Iraq fill Arab television broadcasts.

A Jordanian woman viewing TV footage of wounded men, women and children staring at the camera from their hospital beds, lashed out at Western media for focusing on the combat from a distance.

"If Americans see this," she said, "they would go against Bush now. If they saw all the victims, and if they saw what is happening to all the army and the people, they would be against the war 100 percent. All of them. I am sure of it."

El Rai newspaper editor George Hawatmeh said the emotional toll on Jordanians increases as the war drags on. "Jordan is so close to Iraq traditionally and historically that some families are living on either side of the border. We've had a union at one stage with the Iraqis, so there's a lot at stake. And we do not understand what the Americans are doing," he said.

An anti-war song by Egyptian singer Shaban Abdel Rahim talks of Western double standards. The song has become a hit in Amman and most other Arab capitals. "Enough, enough," he sings. "They want to disarm Iraq. That's okay," he chants. "But why don't they disarm Israel, too?"

Political analyst Labib Qamhawi said the mounting anger and frustration are fueling a wave of anti-American sentiments. "We have to be frank about this. Before this thing started, people always thought of Israel as their Number One enemy. But now, it's changing, and more and more people believe that America is enemy Number One," he explained. "And this is because of many developments, basically because of the U.S. policy toward Iraq and the free hand given by the Bush administration to [Israeli Prime Minister Ariel] Sharon to do what he is doing in the West Bank and Gaza," he said.

And, that presents diplomatic challenges for Jordan, which sees itself in a vulnerable position, wedged between two flash points: Iraq and Israel.

Even though many in the Arab world would like to see Saddam Hussein ousted from power, they say war is not the way to do it. The U.S. government said it will not stay in Iraq a day longer than necessary to restore stability, after Saddam Hussein is removed from power.

But many Jordanians view a U.S. presence in Iraq as a colonialist invasion of Arab land.

The war has refueled criticism of U.S. policy toward the Middle East peace process, which Arabs see as biased toward Israel.

Jordan, which signed a peace treaty with Israel in 1994, has been pushing for the revival of the so-called roadmap that outlines plans to establish a Palestinian state in three years. President Bush has promised to revive the plans, after the new Palestinian prime minister forms a Cabinet that can deal with the issues.

Foreign Minister Marwan Muasher is passionate about the need to revive the peace process now, before the credibility of that promise is lost. "Jordan has always reminded people that the Arab-Israeli front remains at the center of the radar screen of this region and that, without a solution to this long-standing issue, we cannot hope to achieve stability and prosperity in this region," he said.

Prosperity and stability for Jordan also hinge on cordial ties with Iraq.

Bilateral relations soured before the war in Iraq, when Jordan allowed a few thousand American troops on its soil.

The government said the soldiers are in the kingdom for defensive purposes only - mostly to set up and operate Patriot anti-missile systems. In the last Gulf War, 12 years ago, Iraqi scuds - presumably targeting Israeli cities - fell on Jordanian territory.

Jordan expelled five Iraqi diplomats in March, the first Arab state to do so. The government cited security reasons, but later allowed three of the diplomats to stay.

In recent days, Jordanian authorities arrested a handful of Iraqis suspected of trying to bomb an international hotel frequented by Westerners. They are also suspected of plotting to poison water tanks supplying the American forces stationed near Jordan's border with Iraq.

The government has tightened security around key installations and Western embassies, amid fears of extremist attacks against Western interests.

Jordan and Iraq have also been arguing over the disruption of trade and oil supplies for Jordan.

Government officials acknowledge the war is taking a toll on Jordan's economy.

Trade Minister Saleheddin al-Bashir said the war in Iraq already has disrupted cross-border commerce, which accounts for nearly one-fourth of Jordan's trade revenues. Last year, exports to Iraq totaled about $400 million.

Economist Marwan Kardoosh said the disruption puts a heavy strain on Jordan's budget, just as it did after the last Gulf War. "In 1990 and 1991, the Iraqi economy was very much our bread and butter. Jordanian industry historically has been geared to the Iraqi market. Trade, our exports and imports combined, were extensively with Iraq," he said.

Much-needed tourism revenues already had plummeted during recent years, as the Israeli-Palestinian conflict deterred travelers from the region.

The trucking and airline industries have also been hard hit by the sharp decrease in cross-border and regional traffic.

Still, economists predict the economic impact will not be as bad as 12-years-ago, when Jordan paid a heavy price for not joining the U.S.-led coalition that pushed Iraqi forces from Kuwait. At that time, Jordan was left diplomatically and economically isolated.

This time, Jordan has chosen to remain quietly on the sidelines. As a result, the government is receiving pledges of Western aid and new free trade agreements with the United States, which will help compensate for its losses.

Washington has promised more than one billion dollars of economic and military aid, which newspaper editor George Hawatmeh says is critical. "The Americans do support our budget and our economy with $450 million a year. They do provide military assistance. They take in about 20 percent of our exports. We do have an open sky policy with the United States. More is promised. The United States does have influence on countries that have lent money to Jordan. So, any way you look at it, we need the U.S. as a friend," he said.

Still, Jordan's Trade Minister Bashir worries the war and uncertainty about its aftermath have made foreign investors more reluctant to do business in Jordan and neighboring countries.

Aid would help compensate for the losses. "We're seeing in the last two months some hesitance and drop of U.S. buyers of goods, mainly out of Jordan, probably from concerns that the goods won't arrive on time, or that the regional instability would impede the logistical support that this country is giving to goods exported to the U.S. market," he said.

Economist Marwan Kardoosh looks beyond the war and sees a brighter future. "Jordan, being the closest in terms of geographic proximity and having historical ties with the Iraqis, would have - Jordanian businesses - the opportunity to capture [market] in Iraq, trying to rebuild what is ruined during the war, or trying to do more extensive business ties with the Iraqis, because these ties were limited after 1991," he said.

Mr. Kardoosh predicts long-term benefits from a more stable Iraq next door. But, he estimates short-term losses at more than $1.5 billion from decreased trade, tourism and business ventures.

And, he expects the economy of Jordan and the region as a whole will stagnate, as long as investors perceive the Middle East a volatile and risky venture.