Another coup in the Middle East?
Happy Friday,
Jordan became world-famous in 1989 with the appearance of the 10,000 year-old city of Petra - in the film Indian Jones and the Last Crusade. However, this week Jordan is back in the news with a family feud which could destabilise the country and lead to the loss of one of the last stable alliances of the West in a very uncertain region.
On Saturday, Jordan's popular former Crown Prince Hamzah was placed under house arrest as he was deemed to be undermining national security after attending tribal meetings where King Abdullah was openly criticised. Those tribes are the power-base for the Jordanian Royal family and therefore any potential unrest within them cannot be ignored. The move by the former Crown Prince, who lost his title in 2004 by the will of the new King Abdullah to his son Hussein, is being seen as a late act of revenge but also as a strategical move. The Harvard graduate Hamzah sees economic trouble and social unrest ahead due to the King’s handling of Covid - representing his big opportunity to seek back some power. The Jordanian economy has an unemployment rate of 25%, budget deficit of $3bn and a debt/GDP of nearly 100%. In addition, there is the dragging of the vaccination speed and further austerity measures such as postponing public-sector wage hikes and removing Labour protections, all of which causes big unrest within the Hashemite Kingdom.
King Abdullah knows that to guarantee long term stability in his Kingdom, he cannot only focus on resolving the tensions inside his own family, but rather he must also find a way to fix the economy, and his country's handling the Covid pandemic. Last week, the IMF certified that current fiscal reforms are on-track, and expanded the country’s financing access by $200 million, which increases the total disbursements under the ambitious four-year reform plan to $1.95 billion. If financial and economic reforms continue, both the government and IMF see the economy recovering to more than 2% growth and even higher if there are no extended lock-downs, which would be a much needed boost in stabilising the monarchy's status quo.