Jordan economy sent into tailspin by Iraqi embargo

October 11, 1990|By Gilbert A. Lewthwaite | Gilbert A. Lewthwaite,Sun Staff Correspondent

AQABA, Jordan -- Muhammed Sabah has one of the world's least rewarding jobs these days. He is a Jordanian truck driver.

A trucker who used to roll regularly up and down the road from this Jordanian port to Iraq, he now has nowhere to go and nothing to carry.

"What can I do?" asked the 34-year-old father of two. "I just have to wait."

In normal times his turnaround at Aqaba would be two or three days. Now he is counting in months. His wages have dropped from $200 a month to $100 as he makes local instead of long-distance deliveries. Officials estimate that three out of every five of Jordan's 11,000 truckers have been idled by the Persian Gulf crisis.

"There's no money. Just enough to eat, but I can't pay my rent," Mr. Sabah said.

He is a victim of the international trade embargo on Iraq, which, one way or another, is costing this small kingdom 50 percent of its gross national product, throwing the economy into free fall and driving individuals to desperation.

Sami Ansari, general manager of the seafront Holiday Inn, was looking forward to a booked-up tourist season, with four weekly charter flights from Europe expected to fill his hotel here from October until next May.

All the tours have been canceled. He has 170 rooms, 100 staff members and, on a good day now, 20 guests. He faces a $3 million loss on the season. Two of his four seafront neighbors already have closed.

Of his hotel's 100 beach chairs, only four were occupied yesterday. Not a single lounger by the swimming pool was being used. Lunch was a lonely experience with eight waiters and one diner.

"We were expecting a record season. It's going to be a record, but the wrong way," Mr. Ansari said.

"I am convinced Jordan is the biggest sufferer, the biggest loser, out of this crisis. How long will it go on? We can't close down and send everyone home to add to the high unemployment. We have a national duty to survive."

Normally, this port would handle 10 ships a day, with 80 percent of the cargo bound for Iraq. Yesterday just one ship was berthed and two others were at anchor. The port authority has cut its work force from 5,000 to 3,500.

Through here flowed annually 8 million tons of exports, mainly phosphates, cement and fertilizers.

Jordan has lost its competitive edge in the international phosphate market because it can no longer keep its freight charges at rock-bottom levels by filling up ships that have unloaded in the port. Now it faces the expense of bringing empty ships, carrying high insurance rates, here. It already is losing orders to U.S. and Moroccan manufacturers.

Its fertilizer trade has been all but ruined because it relied entirely on Iraq and Kuwait for supplies of sulfur and ammonia. It is now looking for new supplies and is in contact with the Soviet Union.

This pleasant and normally prosperous gulf port-resort is going quietly bust. Bassam E. Kakish, president of the Aqaba Regional Authority, estimates that the local economy has lost $500 million since Iraq invaded Kuwait on Aug. 2.

He noted international promises of billions of dollars in aid to help Jordan withstand the impact of observing the United Nations trade embargo against Iraq and said: "Promises. We can't live on promises. We have received zero. Nothing.

"Why can't we be compensated immediately so we can keep life going? Why can't we end the whole problem fast? Sit with [Iraqi President] Saddam Hussein, and somebody talk to him.

"In the meantime the impact of all this on day-to-day life of the Aqaba people is restaurants are closed, shops have no business, nominor industries are working."

The regional authority already has rationed milk, sugar and rice. Said Mr. Kakish: "How long can we tolerate it all? It depends on how everybody spends the last penny in his pocket."

In the capital, Amman, the government is trying to cope on a national level. To save energy, it is closing its offices early each night, doubling the weekend to two days -- Thursday and Friday -- and ordering shops to close by 7 p.m. and bars and restaurants by 11 p.m.

Farmers have been advised to kill cows after other livestock if their feed dwindles. Urban dwellers have been urged to use the extra day's leisure to cultivate their own plot of land or raise small farm animals.

Central to the crisis for Jordan is its total lack of oil. It has cut its imports from Iraq, which supplied 83 percent of its energy needs, by half. The Saudis initially promised to make good the balance.

But apparently miffed by Jordan's opposition to the multinational force stationed in the gulf and its pursuit of its own peace initiative, the Saudis decided not to deliver, citing non-payment for previous supplies.

Jordan was jammed into a tight and threatening corner.

Government trade officials are busy looking for new sources of oil and supply routes.

To help Jordan through the crisis, which is estimated to cost the economy $1.1 billion this year and $2.5 billion next year, an international emergency aid package is being put together.

Japan has promised $2 billion to Jordan and the two other so-called front-line states affected by the embargo -- Egypt and Turkey.

The European Community is also putting together a major bailout fund.

Jordan is continuing oil imports from Iraq. The supplies, the government asserts, do not break the embargo because they do not represent direct trade but are in payment of old debts. Without them, Jordan would be without light or water. It would be totally stricken.

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