Jordan: Background and U.S. Relations

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U.S. security assistance to Jordan

Similarly, the minority who favor cooperation with Israel even before an agreement with the Palestinians has also shrunk modestly. On a related issue, 57 percent of Jordanians voice a favorable opinion of Hamas, which rejects peace with Israel. This number is virtually unchanged since last year—although down somewhat from the high of 72 percent in , shortly after the last Gaza war. By contrast, the parent organization Muslim Brotherhood, which operates openly and legally in Jordan, is viewed favorably by just one-quarter of the public.

This proportion has remained stable over the past five years. In sharp contrast to such differences, one area of clear consensus between U. These highly one-sided figures have been exceedingly stable over the past several years, and there is no sign of change on the horizon. Based on the preceding analysis, the emphasis of U. On the foreign policy front, Jordanians offer unexpected popular approval of Arab incentives for Israeli-Palestinian peacemaking.

Popular antagonism toward Iran and its regional proxies could also offer fertile ground for closer policy coordination. Perhaps a concerted attempt to reinforce American credibility as an effective regional ally could help reverse this new trend. These findings are from a reliable commercial survey conducted by a regional firm in November The survey consisted of face-to-face interviews with a representative national sample of 1, Jordanians, using standard geographic probability techniques.

The statistical margin of error is approximately 3 percentage points.

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More than 50 per cent of these plants were owned by various East Asian and Southeast Asian companies from Bangladesh, China and Hong Kong, India, Pakistan, South Korea and Taiwan ; 20 per cent were Jordanian and joint ventures with investors from other Arab countries ; 10 per cent Arabian Gulf countries; 10 per cent Turkish and Western countries; and fewer than 10 per cent Israeli-Jordanian joint ventures.

The QIZ agreement opened the US market to Jordanian garment exports under most favourable terms and generated the evolution of a large export-oriented textile and garment industry in Jordan. This new industry accounted for about one-third of total Jordanian domestic exports in and or one-quarter including re-exports. This analysis shows that in , 85 per cent of Jordanian exports to Israel including re-exports, and 93 per cent of Israeli exports to Jordan, were related to the QIZ, and to joint industrial production activity.

In the second half of the s, Israeli-Jordanian trade decreased, following the falling trend of the QIZ arrangements and the decline of the role of Israeli companies in QIZ activity. At the end of the s, the number of textile and garment companies exporting under the QIZ arrangement decreased to around Nevertheless, most of the industrial zones that had been established as QIZs and had flourished in the first half of the s under the QIZ agreement continued to show healthy sustained growth in the second half of the s, benefiting from the free-trade status they continued to enjoy as QIZs, and diversifying to non-textile activities as well.

That encouraged Jordanian non-textile industrialists to venture into export markets as well, and paved the way to the development of export-oriented manufacturing plants in various non-textile industries. The QIZ agreement also played an important role in the development of the widespread network of industrial estates, free-trade zones and special development zones. That network has become a vital platform for export-oriented industrial activity, the huge economic potential of regional transit trade, and investment and employment in peripheral districts in the north and south of Jordan.

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The total number of workers in the zones was estimated at about 60,, of whom 35,—40, were estimated to be Jordanians, in addition to 20,—30, additional indirect jobs in transport, logistics and catering, and with various other service providers and local suppliers of inputs. In all, the overall contribution of the QIZs to Jordanian employment was around 60, Jordanian jobs as of late The fast growth of the Jordanian QIZ system ended in the mids, as the economic environment changed profoundly.

In , the international Multi-Fibre Agreement, which had enabled the US to set quotas for imports of textiles and clothing from China and other countries, ended. This change eliminated one of the major advantages of the Jordanian QIZ system, and the attractiveness of the system for East and Southeast Asian textile and garment companies was greatly eroded. As a result, the inflow of new companies into the Jordanian QIZ system all but stopped after —, and several companies even closed their Jordanian plants.

At the same time, the maturation of the US-Jordanian free-trade agreement FTA , which had been signed in the early s, created an alternative channel for duty-free entry of textile and garment exports from Jordan into the US. The effect of that change was a gradual shift of exports from the QIZ channel, under which companies must procure a certain percentage of their inputs from Israel, to the FTA channel.

Many of the few hundred Israeli companies that had been active in the Jordanian QIZs as suppliers left this market. By the end of the s, only a few tens of Israeli companies were still significantly active as suppliers to the garment plants in the QIZs, in addition to fewer than 20 Israeli companies that kept production activity in the Jordanian QIZs, mostly with Jordanian subcontractors.

That would have made the QIZs a viable alternative to moving production to China and other cheap-labour countries. It was envisaged that cooperation would widen and deepen to include transfer of know-how, joint development of products and access to new markets. Israeli interest in the success of this vision was great, because moving production to China means that the Israeli national economy loses almost the entire production process, as opposed to sharing production with Jordanian QIZ plants.

Many hundreds of Israeli companies are currently manufacturing in these distant countries, at a total value of tens of billions of dollars a year in wide range of industries: electronics, pharmaceuticals, metals, plastics, textiles, and many other fields of industry and agro-industry. Many of these Israeli-owned or subcontracting production facilities are large plants, which produce at tens or hundreds of million dollars a year and employ thousands of workers.

Considering the huge magnitude of this trend of moving industrial manufacturing out of Israel, successful Israeli-Jordanian cooperation in industrial manufacturing would have added billions of dollars to Israeli GDP, in addition to saving many tens of thousands of Israeli jobs—in industry, as well as jobs with various service providers and suppliers of inputs. The benefits for Jordan could have been higher, in terms of share of GDP, exports and employment.

Unfortunately, no governmental support or facilitation of joint production processes was provided, and the incentives provided by the QIZ agreement were relevant only for the textile and garment industry which, at that time, was already in sharp decline in Israel. Therefore, no other major Israeli companies followed the first group of textile and garments firms that started production in the QIZs.

How Powerful Is Jordan?

If the QIZ agreement is reshaped and adapted to facilitate joint production activity in non-textile manufacturing industries, the Israeli business sector may be persuaded to move part of these production activities from China and other distant production sites to Jordan. The relatively large volume of trade that was generated by the few large Israeli garment plants that were producing in Jordan in the s indicate the huge potential of widening such cooperation to much larger Israeli industries. Another major aspect of the untapped potential relates to transfer of know-how for joint production in the QIZs, and marketing to third markets.

Thousands of small and medium-sized Israeli companies are limited in their ability to fully develop their export potential.

These firms are too small to shift production to distant countries, while Israeli labour and other costs are too high, which restricts their competitiveness in export markets. If the QIZ agreement and the required supportive arrangement facilitated knowledge transfer and production in the zones, large new export opportunities would be opened for exports from the QIZs to various global markets. The same is true for exports to Arab markets. Jordan has made impressive progress in developing its exports to Arab markets, primarily the Arabian Gulf markets and Iraq.

In-depth market analyses, conducted by the author on several key GCC submarkets and the GCC market at large, have shown that these markets offer huge opportunities for exports of advanced technology products, which are compatible with the strengths of the Israeli industry in various fields.

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Transfer of know-how and production of such products to the QIZs would have opened billions of dollars of new export opportunities in these markets alone. That large potential can be tapped under a new QIZ model, which would emphasise the free-trade advantages of the arrangement and encourage diversification away from the exclusive focus on the textile and garment industry.

Such a new QIZ arrangement should be designed in a way that enables joint Jordanian-Israeli production in the QIZs to benefit from Israeli export-support programmes and incentives as well as the wide networks of Jordanian and Israeli free-trade agreements. Most importantly, special attention must be paid to numerous administrative, logistical and other impediments, on both the Israeli and the Jordanian side. Although Jordan has a relatively small economy, the trade potential between Israel and Jordan is large.

That is 40 times the current level of Israeli exports to Jordan. The potential for indirect exports to the large GCC markets and Iraq, through Jordan, is much higher. In addition to the great potential of new QIZ arrangements, there are other specific fields of large potential.

The field of tourism, for example, proposes large opportunities in several fields, such as the integration of Jordan into Israeli-Palestinian cooperation on religious Christian and Muslim tourism; the development of tourism in the Jordan Valley, the Dead Sea and the Red Sea by leveraging the unique tourist attractions of these areas; and Arab medical tourism. Medical tourism has become one of the fastest-growing submarkets of the global tourism industry. Such treatments range from complex surgery to routine medical procedures to cosmetic treatments and dental care.

In many cases, family members who accompany the patient take advantage of the medical treatment to travel and spend a holiday in the country of destination.

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It is divided into two main segments:. Until recent years, Jordan was the leading Arab country in medical tourism, registering ,—, arrivals of Arab medical tourists a year. In recent years, Jordan has faced strong competition, with the consequence that the number of Arab medical tourists to Jordan has not risen in recent years. Industry leaders forecast continuous significant decline in coming years and express concern over the strategic threats that the Jordanian medical-tourism industry is facing. Israel is considered a world leader in medical services.

Jordan: Background and U.S. Relations

It ranks among the top five international destinations, and the first for certain services. Although medical tourism to Israel has been growing in recent years, the number of medical tourists coming to Israel is still small relative to those going to other countries. It has been viewed times, with 4 in the last month.

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Geographical information about where this report originated or about its content. Jordan: Background and U. Relations , report , May 8, ; Washington D. You Are Here: home unt libraries government documents department this report. Description This report provides an overview of Jordanian politics and current issues in U. Physical Description 25 pages.

Jordan: Background and U.S. Relations Jordan: Background and U.S. Relations
Jordan: Background and U.S. Relations Jordan: Background and U.S. Relations
Jordan: Background and U.S. Relations Jordan: Background and U.S. Relations
Jordan: Background and U.S. Relations Jordan: Background and U.S. Relations
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