Jordan finds itself at a precarious strategic position. The Hashemite Kingdom is located at the heart of a degenerating region and has absorbed millions of refugees despite a floundering economy. This state of affairs has led Jordan to increase economic cooperation with Israel, as it attempts to offset some of these challenges. However, 23 years after Jordan signed a peace treaty with Israel, the Jordanian public is still not completely comfortable with increasing economic cooperation with its western neighbor.
The value of increased economic cooperation between Jordan and Israel should be a fairly easy argument to make to the Jordanian public, as Israel has a strong economy that could help lift Jordan out of its current economic crisis and help improve the kingdom’s standard of living. In fact, Jordanian-Israeli economic cooperation has already borne fruit, in 1996, when Israel and Jordan, together with the U.S., signed the Qualifying Industrial Zones agreement, which enabled Jordan to export duty-free products to the U.S. The deal had a tremendous impact on Jordan’s economy. For example, in 1997, Jordan’s total exports totaled less than $5 million worth of goods, but as a result of the deal, that number ballooned to $164 million by 2001. Additionally, Jordanian factories that were involved in the deal ended up creating 30,000 jobs.
While some Jordanian elites see the value in establishing a mutually beneficial relationship with Israel, a large percentage of the public remains opposed to complete economic normalization with the Jewish state, primarily due the ongoing Israeli-Palestinian conflict. For instance, Jordan faces a massive shortfall of energy resources, importing 97 percent of its energy needs, yet a $10 billion gas deal signed with Israel last fall generated massive popular protests as thousands of Jordanians took to the streets to protest the deal.
Nonetheless, despite this discontent, regional dynamics have opened the door for increased Jordanian-Israeli economic cooperation. Today, with an influx of 1.5 million Syrian refugees, Jordan finds itself under heavy social and economic pressure, struggling with a lack of water, a modest healthcare system, high unemployment rates, and overcrowded schools that have to operate in two shifts per day. These circumstances have pushed the Jordanian business community, regardless of ideological slogans, to become more open to conducting business with Israel. This relationship has produced a number of projects that will take several years to come to fruition but can play a big role in improving the lives of both Israelis and Jordanians.
First, the Jordan Gateway project is in development, a project which would establish a free-trade zone between the two countries. This would allow them to enjoy a free flow of workers, businessmen, goods, and raw materials, and provide all sorts of benefits and regulatory concessions, such as exemptions from corporate taxation, customs duties, purchase taxes, value-added taxes, income tax, building registration fees, and land taxes. The zones would be located halfway between Haifa Port and Amman, and not far from Irbid, the second-largest city in Jordan, which will facilitate access to Europe and the U.S. from the Israeli side, and to the Gulf of Aqaba and the Asia-Pacific region from the Jordanian side. Only authorized individuals and visitors vetted by both governments will be allowed to enter the area. On the Israeli side of the zone, Israeli law will be applied, and on the Jordanian side, Jordanian law will be applied.
Second, a $1.1 billion Red Sea-Dead Sea project among Israel, Jordan, and the Palestinian Authority aims to supply water to the three sides, as well as increase the flow of water into the Dead Sea, which has been suffering a severe depletion. This plan is based on diverting water from the Red Sea, turning some into drinking water, and piping the rest northward into the Dead Sea.
Third, talks are underway to open a new border crossing between Israel and Jordan near the Dead Sea. This project could pave the way for Jordan to duplicate an extensive program launched by the Israeli government in 2014, which brought 1,500 Jordanians to work in hotels in the Israeli resort city of Eilat. The program is tightly regulated, with the Jordanian workers sleeping in nearby company barracks, with strict curfews – although they are paid Israeli minimum wage, four times what they would make in Jordan. So far, there have not been any major hiccups with the program. A new Dead Sea crossing could operate in a similar fashion and provide Jordanians with new jobs in resorts and factories in the area. Additionally, this initiative could provide an opportunity for Jordanians to meet Israelis face to face, and dispel some of the more pernicious beliefs they may have about their neighbors.
Attempting to expand upon these initiatives is the Jordanian Center for Israel Studies, an independent think tank launched in 2014 by Abdullah Sawalha, a former employee in the Jordanian government’s spokesman’s office. The center’s goal is to study Israel objectively so Jordanians will gain a deeper understanding of Israeli politics and society. Sawalha collaborates with a number of Israeli universities and research institutes to send delegations of Jordanian students to Israel. The center also aims to create permanent programs that will provide an increasing numbers of Jordanians with the opportunity to interact face-to-face with Israelis. The fact that larger numbers of Jordanians are offered the chance to meet Israelis for themselves could herald some small shift in the Jordanian public’s perceptions of Israel.
Overall, these joint Jordanian-Israeli ventures could pave the way for more cooperative projects, as well as increased Jordanian involvement in the Israeli-Palestinian peace process, all of which could stand to benefit both countries.
Aryeh Mellman is a Research Assistant at the Washington Institute for Near East Policy
