JORDAN ELECTIONS: ECONOMY THE MAIN ISSUE, BUT

C O N F I D E N T I A L SECTION 01 OF 02 AMMAN 004559

SIPDIS

SIPDIS

E.O. 12958: DECL: 10/30/2017
TAGS: JO ECON KDEM PGOV
SUBJECT: JORDAN ELECTIONS: ECONOMY THE MAIN ISSUE, BUT
CANDIDATES OFFER LITTLE SUBSTANCE

REF: A. AMMAN 4338


B. AMMAN 4207

C. AMMAN 3813

D. AMMAN 1384

E. AMMAN 2255

F. AMMAN 6612

G. 05 AMMAN 3649

Classified By: Classified by Ambassador David Hale
for reasons 1.4 (b) and (d)


1. (C) Summary. The economy seems to be the number one
issue on the minds of voters and candidates in the thick of
Jordan's campaign season. Despite real economic growth,
rising prices and unemployment numbers show that popular
perceptions of economic difficulties have some foundation.
As a result, candidates are bombarded with questions about
their economic agendas. Most of those running for office
have no coherent plan for the economy, and even if they did,
parliament's power to deal with the concerns of voters is
limited though real. In the end, candidates find themselves
caught in the middle when talk about economic reform
ironically leads to requests for patronage. End Summary.

The Number One Issue
--------------


2. (U) If there is one thing that candidates and voters in
Jordan's upcoming parliamentary elections appear to agree on,
it's that the economy is the number one issue. Despite
impressive GDP growth in real terms of over six percent
during the last three years, average Jordanians continue to
complain about high unemployment rates, the rising cost of
living, high fuel bills, and poverty. Price increases in
particular are a constant source of media attention, with
many columnists holding the government responsible for
keeping prices in check.


3. (U) In September, the Department of Statistics (DOS)
reported a 5.6 percent inflation rate for the first eight
months of 2007. The report showed that seasonal price
increases in several categories likely to hit home for many
of Jordan's poor (vegetables, education, clothes and shoes)
outpaced the average rate of inflation. These increases are
not local - food prices and fuel prices are rising worldwide
and Jordan imports most products. Yet even with subsidies of
some food and fuel products, rising prices are noticeable to
average Jordanians. These increases are already having an
impact in the political sphere, as the debate over the burden
of subsidies on Jordan's budget shows (reftels).


4. (SBU) In February 2007, DOS reported average unemployment
rates of 14.3 percent among the economically active Jordanian
population, with the lowest unemployment in Aqaba (8.9
percent) and the highest in Madaba (22 percent). For
comparison, at the time of the 2003 election, unemployment
stood at around 13.7 percent - a marginal difference. The
perception among many Jordanians is that actual unemployment
stands at double the official rate.


5. (U) A poll conducted by the International Republican
Institute in August showed that the rising cost of living was
cited by 48 percent of respondents as the most pressing
problem facing Jordan today - a jump of over ten points from
two years ago. When combined with the respondents who cited
unemployment (17 percent) and poverty (9 percent) as Jordan's
most pressing problems, a whopping 73 percent of Jordanians
see economics as the main issue in the policy sphere. For
good reason: a DOS survey of expenditure and income released
in September compared 2002 and 2006 figures and found that
while average annual household income had increased 11
percent from USD 7,800 to USD 8,700, household expenditures
increased 21 percent from USD 8,700 to USD 10,600 during the
same period. The survey found that the gap between income
and expenditure was being paid for with loans, real estate
sales and remittances (Ref B).

Economics on the Campaign Trail
--------------


6. (C) As a result, candidates are getting an earful from
their constituents on the economy, and what prospective
parliament members are going to do to ease citizens' personal
economic burdens. Every candidate we talk to cites the
economy as the first and foremost issue that voters raise
during campaign stops. The consensus is that Jordan's
perceived economic woes are a direct result of its
governmental system, rather than part of a global downturn.
A candidate in Salt laid rising standards of living squarely
on the government's doorstep: "The US and the EU give us
lots of economic aid. They are doing what they can. But the
Jordanian system doesn't allow for economic opportunity." A

AMMAN 00004559 002 OF 002


Madaba candidate links the economic and security situations,
saying that enforcing public order requires a level of
economic security that the government is not currently
providing. He says that the unemployment rate in Madaba is
over 40%. Several candidates talk about the economy in terms
of the distribution of wealth and links to corruption. They
explain that the key to fixing Jordan's economic situation is
to end the accrual of bribes and payoffs to government
bureaucrats.

The Economic Policy Catch-22
--------------


7. (C) While candidates recognize the economy as the main
political issue, few have displayed a clear grasp of
economics or economic policy-making. Questions about the
specifics of how to solve Jordan's economic problems are
answered with vague prescriptions along the line of "the
government should just fix it." One candidate in Madaba
hinted that Jordan's economic problems could be solved
through a hazy program of nationalizing the economy. A
candidate in Salt suggested that "fat" could be cut from the
budget, but had no idea about where that "fat" was to be
found. No candidate with whom we have spoken is aware of how
Jordan's economy or budget currently operates - they simply
project confidence in their ability to come up with a
solution and hedge on how to carry it out. Fortunately for
them, the largely tribal nature of Jordanian politics and
lack of policy debates means that they rarely have to talk
about their post-election plans.


8. (C) The irony of the economy being the number one issue
in the election is that it is the government, appointed by
the King and lately composed of figures from outside
parliament, that is the prime mover in Jordan's economy. The
parliament has historically exercised its power more to block
or delay economic reform measures, rather than to initiate or
advance them. A recent example of this is the anti-money
laundering law, part of a raft of royal court-inspired
reforms which parliament refused to act on for months in
spite of intense lobbying (REFS D, E). Similar (and
successful) parliamentary obstructionism was on display in
2006 regarding the government's efforts to reform the tax
law. On occasion the situation has reached the point where
the King has called parliament to task for its lethargy and
indifference (REF F),and previous governments have even
offered financial incentives to MPs in order to pass key
legislation (REF G). In our conversations, only a few
candidates (usually those educated outside of Jordan),and an
even smaller minority of the electorate, seem to recognize
the role parliament plays. Meanwhile, voter demands for
public sector positions and continued subsidies, and a
political system still underpinned by patronage, undermine
the ability of interested legislators to take immediate
action on reforms necessary for Jordan,s long-term economic
growth.


9. (SBU) A further difficulty faced by many candidates is
the nexus between unemployment as an election issue and
patronage as a political practice. In the absence of
concrete economic plans, many voters see patronage jobs as a
proxy for their concerns about the economy as a whole. A
candidate in the Balqa district told us that many voters ask
him to solve their unemployment problem directly by using
connections to find them government jobs. Talking about
unemployment is potentially risky for many candidates as the
discussion inevitably turns towards trying to secure a job
pledge for a relative. Candidates who run on an
anti-corruption platform are especially vulnerable when it
comes to talking about the economy, as they are usually
unwilling to pledge the use of their good offices for
individuals or groups. This makes their vague statements
about dealing with unemployment ring even hollower.
Hale