Ask any Jordanian in Amman about Iraqis in their country, and they will immediately tell you that Iraqis have driven up the prices of virtually everything in the capital. Apartments cost double what they did five years ago. The prices of food and gasoline have soared. Iraqis arrive with suitcases full of cash, drive around in expensive cars and make life much more difficult for Jordanians—or such is the widespread belief.
It is true that some of the approximately 750,000 Iraqis in Jordan are wealthy. [1] “Let’s face it,” says a Jordanian academic. “The men of Saddam came to Jordan. They robbed the country, then came to Jordan.” [2] After the initial rush, however, the incoming waves of Iraqis—“guests,” says the Jordanian government, not refugees—have not been so well-off. Many Iraqis may have arrived with decent amounts of money, but have seen their position deteriorate as they spend their life savings simply to get by. Getting a work permit in Jordan requires a residency permit, and getting a residency permit requires 150,000 Jordanian dinars (around $211,700) in the bank, a sum that most Iraqis in Jordan cannot afford. [3] Iraqis account for less than 1 percent of legally issued work permits as of May 2007. [4]
And living in Jordan has indeed become more expensive in the war years. Overall inflation in Jordan has risen to 6.25 percent in 2006, up from 1.6 percent in 2003. Yet though the rise in prices is often attributed solely to the influx of Iraqis, it has several causes related more to the war in Iraq itself, as well as shifts in the global movement of capital, global inflation and government austerity measures predating the war. On the macro level, Jordan is experiencing economic expansion. National growth rates have been strong: 8.4 percent in 2004, 7.2 percent in 2005 and 6 percent in 2006. [5] Most Jordanians do not benefit from this growth, however, and, feeling the bite of higher prices, they have settled on the Iraqis as the culprit.
Food, Fuel and Housing
The three primary sources of economic stress for Jordanians are food, fuel and housing. According to a July 2007 study published by the University of Jordan’s Center for Strategic Studies, and focused on the impact of the Iraq war on the Jordanian economy, food prices have risen 21 percent since 2002. Since food comprises the bulk of household spending, as measured by the consumer price index, people feel the rise in food prices acutely. The increase is directly related to the war, as Jordan has massively expanded its food exports to Iraq, almost doubling the pre-war levels in 2004-2006. This shift has compelled Jordan to import more of its food, driving prices up.
Since 2002, as well, fuel prices have risen 54 percent. This rise is also a direct result of the Iraq war, since the war cut off the flow of subsidized oil that the Jordanian government had negotiated with Saddam Hussein’s regime. Jordan now buys its oil on the international market. At the same time, the global price of oil has skyrocketed, also in part as a result of the war. Jordan spent almost four times as much in 2006 for petroleum and petroleum products than in 2002, and for less gasoline to boot. Thus, the quadrupling of dinars spent on fuel comes not from increased consumption, but from radically increased prices. The Jordanian government has also been gradually decreasing government subsidies on fuel as part of its adherence to structural adjustment programs, implemented well before the Iraq war began.
The final major component of economic hardship is the greater cost of land and housing, particularly in Amman. Real estate prices jumped by 100 percent in 2005 alone. To be sure, Iraqis have been unusually active in Jordan’s real estate market, most notably in Amman and to some extent in ‘Aqaba. There has been a dramatic increase in the number of land and housing transactions by Iraqis, from 125 transactions in 2002 to 1,811 in 2005, or from 4.9 million to 100 million dinars. Furthermore, Iraqis undertook a large majority of non-Jordanian real estate deals in the kingdom during 2005 and 2006, approximately two thirds in terms of both numbers and value. [7] Iraqis represent a tiny minority of total housing transactions contracted in Jordan, however. In 2005, non-Jordanians represented only 2.6 percent of all housing transactions, and Iraqis, only 1.8 percent. The remaining transactions are, of course, conducted by Jordanians.
Rising real estate prices can be traced to several sources. Amman is under-supplied with housing, facing “the possibility that housing units may become scarce in the short to medium term.” [8] The global price of building supplies comprising the intermediate costs of building new housing has ratcheted up over the past few years. [9] This rise in prices, attributed to massive increases in demand from China and India, is passed on to the consumer. Last, but certainly not least, demand for new apartments is growing at a fast clip in Jordan and will only expand in the near future as a result of the country’s age structure. The average age of marriage in Jordan is now 29 years for men and 26 years for women; 68 percent of the population is under the age of 29. [10] Given that supply is limited, this demand pressure only drives prices higher. Between increased demand, lack of supply and increased intermediate costs, there are enough structural factors pushing housing prices skyward without much input from Iraqis in Jordan.
Indeed, because the majority of Iraqis in Amman are probably renters, they are themselves badly hurt by the inflation in housing costs. Rents have ballooned in response to the increase in demand generated by the large numbers of Iraqis. The wealthy Iraqis who could afford to buy in the beginning have done so, but most of those who followed could not. Very few Jordanians rent the housing they live in, and so the rise in rents is primarily borne by non-Jordanians, Arab and otherwise.
The picture of a large economic impact from Iraqis in Jordan also blurs when separating out land purchases from total real estate transactions. Iraqis were were responsible for less than a fifth of the total land area purchased by non-Jordanians in both 2005 (17 percent) and 2006 (13 percent). [11] In contrast, land area purchased by Kuwaitis grew from 6 percent in 2005 to 37 percent in 2006, as a percentage of all non-Jordanian land purchases. [12] In 2006, Kuwaitis expanded their land holdings 796 percent, but still only represented 9 percent of all transactions in terms of numbers, and 2 percent of all transactions in terms of value. In short, Kuwaitis are buying a lot of cheap land, far from Amman, while Iraqis tend to buy smaller, but more expensive tracts in the capital. Purchasing land in the capital also makes Iraqis more visible to Jordanians as economic agents than their Gulf counterparts.
Therefore, Iraqis do not exercise the stranglehold on the Jordanian economy that is usually ascribed to them. Furthermore, the reasons for Jordan’s current economic boom (and hence, inflation) have more to do with international economic events prior to the war than with Iraqi capital in Jordan or even the Iraq war. After the attacks on the Twin Towers and the Pentagon on September 11, 2001, many investors from Gulf countries became nervous about their investments in the United States. They repatriated their capital and began investing in the region, especially in Jordan. In addition, interest rates were lowered worldwide following the dot-com bust (and subsequent stock market contraction) in 2000 and then again after the September 11 attacks in an effort to stimulate growth. The lowered interest rates created excess liquidity across the globe, also a boon for Jordan. “Jordan was a particularly excellent market,” explains a prominent Jordanian businessman, “because many share prices of Jordanian companies and much of kingdom’s real estate were significantly undervalued.” With the expanded availability of credit, Jordanians themselves have been active participants in buying land. As land prices rose all over the country, Jordanians began selling. As mentioned above, non-Jordanians (Iraqi and otherwise) have entered this market, but are by no means the primary participants. Finally, Jordan’s monetary policy of pegging the dinar to the US dollar has played a role in putting financial pressure on the country. The currently weak dollar has caused the Jordanian currency to depreciate in real terms, making goods from Europe, the source of one quarter of Jordan’s imports, all the more expensive.
Of course, this is somewhat abstract economic analysis, even for the more sophisticated Jordanian. For most Jordanians, life has simply grown more burdensome, and that trend coincided with the arrival of Iraqis in Jordan. The Iraqis are very visible in Amman. Since few of them can work legally, they have little to occupy their time, and they congregate in the capital’s few public spaces like the Mecca Mall and King Hussein Park, where entrance is free. Because these spaces are already crowded and overused by Jordanians themselves, it seems to them that Iraqis are everywhere.
Fear and Loathing
The political response from Jordanians has been mixed. Despite their economic worries, some Jordanians remain sympathetic towards their Iraqi “guests.” These sympathies, however, are tempered by the perception that all Iraqis in Jordan are rich. Some Jordanians report a feeling of joining of ranks between Jordanians of different origins, a slight narrowing of the Jordanian-Palestinian divide in the face of the new “invader.” The primary response, however, has been a profound resentment of Iraqis in general and a growing concern about Shi‘a in particular.
The current government policy of calling Iraqis guests explains, and even feeds, bitterness at the popular level. Many Jordanians feel that Jordan, a country without oil reserves and precious little water, is making sacrifices in order to offer Iraqis at least a stable place to live and be safe from the violence in resource-rich Iraq. Iraqis, in return, are not acting like guests should. A Jordanian teacher, who warmly claimed that she likes Iraqis and has many Iraqi friends, still gets agitated when she hears Iraqis complain: “If you don’t like it here, leave. It’s not right to complain or nag if you are a guest in my country.” A Jordanian taxi driver noted, “We used to feel sorry for the Iraqis when they were under economic sanctions. But they deserved it. They sold their country for money. They are our guests. It is our responsibility to care for them, but they are not acting correctly.” The consistent refrain from the government, expressed privately as well as publicly, is that Jordan simply cannot absorb the Iraqis. Jordanian policy has become a mixture of making life manageable so as to avoid criticism, but difficult enough so that Iraqis will never feel comfortable enough to stay.
Even more disturbing is the prevalence of deep-seated fear of Shi‘a in a country that historically had no Shi‘i population. Jordanians lower their voices to tell you that the Shi‘a are not really Muslims, that they are trying to convert the Sunnis, that they are loyal to Iran or Hizballah and that their creed sanctions sexual practices such as incest and group sex. References to a “Shiite crescent,” a term coined by King ‘Abdallah in late 2004, pop up spontaneously in conversations, indicating a sense that Jordan is surrounded by a hostile, alien force. [13] A Sunni-Shi‘i split is developing in Jordan, a country whose only Shi‘a (their numbers unknown) are “guests.”
But where is this fear of the Shi‘a coming from? There were thousands of Iraqis in Jordan throughout the 1990s (granted in about half the number as today). Given that many of them were fleeing Iraq after the failed uprisings after the 1991 Gulf war, many of them had to be Shi‘a. (The best indications were the large gatherings for ‘Ashura at the shrines honoring Imam ‘Ali’s brother, Ja‘far ibn Abi Talib, and two others near Mu’ta, site of a battle between Muslim and Byzantine armies in 629. These celebrations have been curtailed, although not entirely banned.) Their presence did not provoke the same whisper campaign as today. As recently as the summer of 2006, during Israel’s war with Shi‘i Hizballah, that party was popular enough on the Jordanian street that the government outlawed (Hizballah’s yellow-and-green) “foreign flags” at demonstrations. One year later, Hizballah is no longer seen as the Arab vanguard, and the Shi‘a are suspect. Several individuals interviewed for this article commented off the record that fear of the Shi‘a is manufactured by the government in order to counter the popularity of Hizballah, but it is difficult to confirm or trace this process.
Another explanation lies in a regional context that has radically changed, as word of the scale and ferocity of the sectarian violence in Iraq has spread. Jordanians, the vast majority of whom are Sunni Muslims, hear about Shi‘i militias torturing Sunnis, while a Shi‘i-dominated government that is backed by both Iran and the US stands by. Jordanians were stung when, on December 30, 2006, a Shi‘i-dominated government hanged Saddam Hussein on the Sunni (but not the Shi‘i) Feast of the Sacrifice. The Iraqi Shi‘a are seen as collaborating with the US occupation, while the late Iraqi dictator is seen as an Arab hero who held Iraq together and had the courage to say no to US demands. Iran’s power in the region appears to be growing by the day. Iraq, once the barrier protecting the Sunni Arab world from the Persian tide, has been destroyed and is now controlled by those seen as doing Iran’s bidding.
The Sunni-Shi‘i divide notwithstanding, the most pressing problems for most Jordanians remain economic in nature, as prices continue to climb and awareness of the actual causes of Jordan’s economic difficulties remains faint. A summary of the results of the Center for Strategic Studies study, which undercut the popular mythology about the negative impact of Iraqis in Jordan, was published in all the major Arabic- and English-language newspapers, but received only scant attention from commentators. Its findings contradicted the conventional wisdom too starkly to be honestly considered. In the absence of wider diffusion of this information, Iraqis in Jordan will continue to be a handy punching bag for Jordanians facing the economic anxieties of the twenty-first century.
Endnotes
[1] The Jordanian Department of Statistics has been cooperating with Fafo, a Norweigan social research organization, to gather more information on Iraqis in Jordan, including a more accurate estimate of their numbers, as well as the social and economic characteristics of the Iraqi community in Jordan. At press time, the results had not been released.
[2] This person stressed that the majority of Iraqis in Jordan are neither rich nor Saddam’s men.
[3] Half of this sum must remain in the bank, and the other half may be used for investment in a business or housing.
[4] Ibrahim Saif and David DeBartolo, The Iraq War’s Impact on Growth and Inflation in Jordan, Center for Strategic Studies, University of Jordan (July 2007), p. 38. Unless otherwise noted, economic statistics cited here are taken from this report.
[5] “Real Estate Report,” Research Department, Jordan al-Ahli Bank, July 2007, p. 3.
[6] Yusuf Mansur, “Winners and Losers in MENA,” Bitter Lemons International, December 8, 2005, accessible online at http://www.bitterlemons-international.org/previous.php?opt=1&id=111#449.
[7] “Real Estate Report,” p. 38. The next largest group was “Others,” ranging from 17-22 percent in terms of number and value of transactions, trailed by Saudis (6-10 percent), Kuwaitis (2-9 percent) and Syrians (3-4 percent).
[9] Interview with Ibrahim Saif, Center for Strategic Studies, University of Jordan, July 22, 2007.
[10] “Real Estate Report,” p. 20.
[12] Unfortunately, this study does not give the percentage of land purchases by non-Jordanian Arabs as a percentage of all land purchases in Jordan.
[13] For background, see Morten Valbjørn and André Bank, “Signs of a New Arab Cold War: The 2006 Lebanon War and the Sunni-Shi‘i Divide,” Middle East Report 242 (Spring 2007).
