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Jordan's Economy Buffeted by Events in Iraq

The just-concluded elections in Iraq are being widely hailed as a harbinger of better times to come for Iraq and the whole region. In neighboring Jordan there is certainly hope that this will be the case, but Jordanians are increasingly worried about the negative economic impact continued insecurity and violence inside Iraq will have on them.

Construction workers pound metal girders into place, as they build the framework for a new apartment building in central Amman.

While Jordanians welcome the construction boom and the jobs it brings, they also complain that apartments such as these are being built for rich foreigners. They say proposed rents here are more than most Jordanian families can afford and they say it is mostly Iraqi expatriates who will be moving into these upscale apartments.

Ahmed Al-Jobouri, 24, lives nearby with his widowed mother and two younger brothers. He says wealthy Iraqis fleeing the continued insurgency and lawlessness at home are coming here to Jordan and driving up rents in Amman.

He says poorer Jordanians are being forced out of their homes. Shaking his head he says his landlord doubled the rent last week. If he refuses to pay, he could easily be replaced by plenty of Iraqi families with cash in hand.

Jordanian political analyst Labib Kamhawi says the fact that wealthy Iraqis have brought money into Jordan is in one way positive, but he says there is also a downside.

"This is negative and positive because all the prices went up," he noted. "There's a lot of unemployment in Jordan which means people cannot afford anything.

Jordan has long depended on oil-rich Iraq for its own economic well being and cross-border trade has always been vital. But the continuing insecurity in Iraq is being felt in Jordan.

The trucking industry is one of the worst hit. More than 11,000 truckers who formerly hauled goods to and from Iraq are now unemployed because the road from Amman to Baghdad has become too dangerous.

The Jordanian Truck Owner's Association says 30 truckers were killed last year and more than 300 trucks were either destroyed or stolen by insurgents or bandits.

Local economists say Jordan's unemployment rate, officially at 17 percent, is actually now nearly twice that high.

Labib Kamhawi says unless trade with Iraq picks up soon Jordan's economic slump will only deepen and that, he warns, could have wider consequences.

"You have less and less opportunities for work, so you have less and less people who are able to cope and this is why you see a pressure build up," he explained.

Mr. Kamhawi says those economic pressures could easily lead to growing political frustrations. He says very often people will then turn to the mosque to vent their frustrations and seek help.

But he worries that in some mosques moderate Islamic teachings are slowly giving way to more strident rhetoric. And that he says risks providing a center for the disenchanted and a perfect breeding ground for Islamic militancy.