Economy in the doldrums as crisis continues

With the conflict in Iraq now in its fourth week, the mood is one of depression in the neighbouring Jordanian capital of Amman. The economy was like "tar", one shopkeeper told IRIN on Thursday, sitting in a downtown coffee shop. "People are holding on to their money with their fists." Ahmad, a taxi driver, told IRIN his electricity had been cut off two months ago for failing to pay his bill. "The economy is dying," he asserted. A combination of the conflict in Iraq, the 11 September events in the US and ongoing instability in the Occupied Territories, which began in 2000, has severely impacted on all sectors of the Jordanian economy. "Everything has been hit," said Amer al-Hadidi, the director of industrial development at the industry and trade ministry. "The damage is quite substantial. The Iraqi war is a major setback." Over 500 small and medium companies depend on the Iraqi market, employing more than 20,000 workers in the pharmaceutical, food, textile and building industries. "The damage has been lessened by the short period of the Iraqi war," said Al-Hadidi, "but all those jobs are jeopardised." Jordan already has an official 17 percent unemployment rate - and an unofficial one which may be as high as 25 percent. In 2002, the country exported US $400 million worth of goods to the Iraqi market, much of it in exchange for free or heavily subsidised oil, said Al-Hadidi. Every day I have about 20 people in my office screaming at me and asking me for answers," Al-Hadidi said. They want answers about unpaid contracts with the former Iraqi government, raw materials for export to Iraq sitting in Jordanian warehouses, or commodities the Iraqi government was happy to import under the Oil-For-Food Programme, but would find no customers in other markets. "The government was not very quality conscious - we wouldn't be able to sell to other markets, especially with the packaging as it is now," said Al-Hadidi. "The uncertainty is really high." Tourism, which used to bring about one million people to the country each year - mainly from the US, Canada and central Europe - has also been deeply affected. "Business is down to zero," said Nasser Kawar, the managing director of the Petra Travel and Tourism Company. Most people have been put off by the advisories issued by the US and European governments warning tourists not to travel to the Middle East. Since September 2002, nearly all international tours, packages and pilgrimages have been cancelled. The advisories have also affected the private sector, as US and European business people are unable to access Jordan to deliver goods and sign contracts. "Even when the advisories are lifted, it [business] won't be booming, but at least it will start again," said Kawar. "It is really difficult." Only 20 percent of hotel beds in five-star establishments were full in Amman, with less than 15 percent in smaller hotels, Michael Nazzal, the president of the Jordan Hotel Association, told IRIN. Popular holiday destinations like Petra and the Dead Sea were "literally empty", he said. And the hundreds of journalists in town last week, all searching for a story while they waited to enter Iraq, and all writing about tourism in connection with the war, were not helpful either, Nazzal said. "We don't want to be in the news, we're trying to get out of it." Many people living in Jordan - one of the most stable and pro-Western nations in the region - watching international events unfold around them, say they have been "unlucky" with their neighbours. "Today I'm working for free," said Sharif, another taxi driver. By the time he has paid his 15 Jordanian dinars (US $21) daily rent for his taxi, and bought food for himself and his family, he has less than a third of his earnings left. "If you look at people's faces you can tell how bad things are," he said. Jamil, a jewellery shop owner, told IRIN he was now incurring losses. "I used to make about 250 JD [Jordanian dinars] per day, now I'm making a daily loss of about 40 or 50 JD. I've had to sell off some of my stock to feed my family." "We have to be hopeful," said Nazzal, but even without the travel advisories, who would come here with a war on one side and the Palestinian uprising on the other, he asked. "Everybody is waiting for peace in the region," he said.