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Jordan's Inter-Arab Relations: The Political Economy of Alliance Making
New York Chichester, West Sussex
1994
4 Jordanian-Kuwaiti Relations
Ties between Jordan and Kuwait were characterized by cooperation during virtually the entire period under study. The stage for three decades of cooperative relations was set in the wake of Kuwaiti independence from Britain in 1961. At that point, Jordan sent 300 troops to the amirate as part of a larger Arab League force, following Iraqi President 'Abd al-Karim Qasim's threat to "restore" Kuwait to Iraq. Thereafter, Jordan trained members of the Kuwaiti military and worked closely with members of the Kuwaiti security apparatus.
As was the case in the Jordanian-Saudi relationship, the substantial Kuwaiti aid payments to Jordan were in large part aimed at reinforcing the security and military apparatus of a politically like-minded and supportive state. As a small conservative oil-producer, surrounded by far more powerful neighbors (Iraq, Iran, and Saudi Arabia) and subject to the influence of Arab nationalist and other regional forces generally inimical to monarchies, the amirate was vulnerable on a number of fronts. The Jordanian stability and cooperation the Kuwaitis bought (or "rented") with their various forms of financial support, therefore, were intended to reinforce Kuwaiti domestic security: Jordan served as a buffer between Kuwait and the Arab-Israeli battlefield; and its security forces helped the Kuwaitis keep track of a range of political activists of interest to both countries. In addition, the goodwill between the two states reportedly led King Husayn to intervene on several occasions to smooth Kuwait's often rocky relations with Saudi Arabia. 1
In the economic realm, a large number of Jordanians (most of them Palestinians) began migrating, in search of work, to the small amirate following the dismemberment of Palestine in 1948 and eventually came to constitute the largest expatriate community in Kuwait. In addition to offering employment opportunities, after the oil boom Kuwait's development fund financed a variety of East and West Bank infrastructure projects and institutions. However, by far the most important economic link between the two countries consisted of the amirate's annual contribution of budgetary support, noted above. This financial aid relationship began as a result of resolutions of the Khartoum Arab League summit following the 1967 war, and was renewed or expanded in subsequent summits in Rabat in 1974 and Baghdad in 1979. Throughout this period, Kuwait was second only to Saudi Arabia in total aid provided. It thus assumed tremendous importance in Jordan's quest for state budgetary security. Outside this realm the primary impact of the bilateral economic relationship was on the private sector, since no government-to-government protocol regulated Kuwaiti-Jordanian bilateral trade, and the amirate gradually developed into Jordan's second most important export market (after Iraq).
The only major dispute between the two prior to the period under study followed Jordan's crackdown on the Palestinian resistance in 1970, which led Kuwait to suspend until 1973 the financial support it had promised Jordan in Khartoum. Hence, until the 1990 Gulf crisis, to be discussed in the concluding chapter, the relatively stable relations between the two countries offer no direct challenge to the economic and budget security argument developed in chapter 1. However, as with Saudi Arabia, a presentation of the development of this bilateral relationship is essential, first, to demonstrate the close nature and extent of the ties and, second, to make Jordan's relations with the other case study countries--Egypt, Iraq and Syria--more comprehensible. And, as with Saudi Arabia, substantiating statistics, particularly in the realm grants-in-aid, is not possible. Not all aid is acknowledged and not all aid promised is forwarded. Thus, the figures presented in this chapter should be viewed as suggestive of the extent of the aid relationship, but not definitive in terms of sums.
Political Developments
Consultations between the two small states were fairly regular during this period. In mid-June in both 1975 and 1976 King Husayn paid brief visits to Kuwait as a part of larger Gulf tours. The press descriptions of the contents of such talks are generally not particularly revealing. However, in this case, a report of the 1976 Kuwait trip in Kuwait's al-Siyasah did note that Husayn intended to request $200 million in additional aid while in Kuwait. 2 Indeed, these visits as well as many subsequent ones should probably be understood as a part of a Hashemite campaign for funds. According to Mudar Badran, who was Minister of the Royal Court and then Prime Minister from mid-1976 to December 1979, Jordan faced a serious budgetary shortfall in 1976 owing to the Gulf states' failure to honor the financial commitments made to the confrontation states at the 1974 Arab League summit in Rabat. 3 As part of the fundraising campaign, Badran visited Kuwait and other Gulf states in mid-December 1976. A week later, Kuwaiti Minister of Foreign Affairs, Shaykh Sabah al-Ahmad al-Jabir al-Sabah, visited Jordan for brief talks with Husayn, reportedly dealing with the vague and traditional topics of "strengthening Arab solidarity" and "bilateral economic cooperation," again, likely code words for economic assistance, given Jordan's severe financial troubles at the time.
In mid-1977, King Husayn arrived in Kuwait, reportedly to discuss his recent trip to the U.S., and, no doubt, the proposed Geneva Middle East peace conference tentatively planned for later in the year. However, some sources indicated other possible agenda items: Kuwaiti assistance for arms purchases as well as PLO-Jordanian relations, since Kuwait was involved in mediating between Jordan and the PLO to improve what had been icy relations since 1971. The mediation efforts would presumably have been directed at achieving a unified Arab position as the Geneva conference approached.
But Geneva never came. The preemption of Geneva by Sadat's trip to Jerusalem was greeted differently in Kuwait than in most parts of the Arab world, as the amirate cautiously supported Sadat's decision. The dissension that the trip caused in the Arab world led King Husayn, the perennial mediator, to visit Kuwait on December 19, reportedly for talks aimed at restoring unity. 4 In the spring of 1978, as the Egyptian-Israeli talks appeared stalled, both Jordan and Kuwait were involved in mediation aimed at ending inter-Arab feuding which had been precipitated or exacerbated by Sadat's trip. On October 1, following the signing of the Camp David Accords, Husayn arrived in Kuwait on a brief visit for talks with the amir, urging the convening of a summit to deal with the implications of the accords.
Of course, none of the Arab mediation between September 1978 and March 1979 aimed at preventing Egypt's defection from Arab ranks ultimately succeeded. Faced with the loss of Egypt, the Arab states viewed it to be in their interest to prevent additional defections à la Sadat. The easiest and most secure way of deterring Jordan, the obvious next target, from making a similar move was to bolster budgetary support to the kingdom. The basis for such a policy was laid through the Baghdad promises to provide financial assistance for a decade to the confrontation states. At the Baghdad Summit in November 1978, Kuwait made a key commitment to these states of $550 million annually for 10 years.
In the meantime, Sadat had assured the U.S. that he could deliver Jordan to the peace table so that he would not appear to have made a unilateral peace with Israel, and so that the second half of the Camp David Accords (dealing with Palestinian autonomy) could be completed, the presumption being that King Husayn would either deliver the Palestinians or represent them himself. Hence, throughout this period the U.S. pressured Jordan to join in the extension of the Camp David process. The king ultimately resisted these attempts. However, the extent of Arab courting of Jordan during this period indicates that the kingdom's adherence to the Arab consensus was by no means taken for granted, even after the reaffirmation of the Baghdad 1978 aid commitment in March 1979.
During the month before the Egyptian-Israeli peace treaty was finally signed, Jordanian Foreign Minister Hasan Ibrahim made a number of trips to Kuwait, reportedly to coordinate strategies for the period following "the peace." These discussions probably concerned both economic and political issues, as on April 30 Kuwait called upon the Arab states to support Jordan in the wake of the signing of the treaty. On July 10 Kuwaiti Deputy Prime Minister and Foreign Minister Sabah al-Ahmad left on the first leg of an unexpected tour which was also to include Damascus and Baghdad. The foreign minister spent two days in Jordan and delivered a message from the amir to Husayn. Upon his departure, the Kuwaiti envoy stressed that Jordanian-Kuwaiti views were identical and spoke of the dire need for Arab solidarity. 5 Only a few days later a report from Kuwait noted the recent stream of visitors--Iraqi, Libyan, and Kuwaiti--to Jordan and raised the question of whether Jordan felt it was facing a new Israeli military threat or if the kingdom was about to make a decision to join Camp David. The report, published in the respected daily al-Qabas, called on the Arabs not to make the same mistake with Jordan that they had with Egypt by failing to take prompt action: "If it is true that Jordan is now facing such a decision, now is the time for the Arabs to act decisively on this matter, to solve Jordan's confusion [read ensure financial support] in a manner that will secure the safety of the national ranks." 6 Kuwaiti support in the form of grants and loans increased markedly during this period. (See "Economic Developments" below.)
On January 14, 1980 the king made an official visit to Kuwait as part of a larger Gulf tour to discuss regional and international developments, and at the end of February, Crown Prince Hasan made a similar tour. While in Kuwait, Hasan met with Kuwait Crown Prince Sa'dand the two agreed to establish a joint committee on economic cooperation. 7 In May, the Crown Prince returned the visit and the list of Jordanian officials involved in the talks suggested that the meetings were concerned primarily with economic and security affairs. 8 Further confirming the security content of the discussions was the agreement announced at the end of the three-day visit in which the two jointly rejected all foreign intervention in the region. This was likely a reference to the Carter Doctrine, formulated in the wake of the Soviet invasion of Afghanistan, and its call for a Rapid Deployment Force, in which it had been rumored Jordan might participate. 9 That same month King Husayn and Crown Prince Sa'dtraveled to Baghdad for further consultations on security arrangements, in part in response to Iraqi President Saddam Husayn's proposal of an Arab National Charter. The charter included suggestions for regional security cooperation and was directed at least in part against the extension of U.S. power in the Gulf implied in the Carter Doctrine. Security concerns in the region only intensified with the outbreak of full-scale war between Iraq and Iran in September 1980. On April 9, 1981, King Husayn reinforced Jordan's traditional opposition to external involvement in the region and implicitly made a bid for a Jordanian role in Gulf security by announcing his own regional security plan, which called for the Gulf states' neutrality, their taking responsibility for their own security, and their avoidance of both boycotts and the oil weapon. 10
Whatever role the Jordanians had hoped to play in Gulf security, the Kuwaitis were looking elsewhere for reinforcement. Discussions of mutual defense and state security cooperation among the Gulf states had taken place in December 1978, on October 14-16, 1979, and on February 4 and March 8, 1981. Finally, on May 25, 1981, Kuwait joined Bahrayn, Oman, Qatar, Saudi Arabia and the United Arab Emirates in establishing the Gulf Cooperation Council (GCC). Although the council's mandate covered a variety of functional areas, regional security was clearly the primary consideration. Still seeking a role in regional security arrangements, Husayn offered military assistance as a form of associate membership for Jordan in the GCC. Unfortunately for Jordan, the Gulf states were not interested. 11
Military Coordination
While Kuwaiti support payments to Jordan were no doubt in large part aimed at maintaining the stability of a moderate monarchy, they were also intended to reinforce and build upon a relationship of strong if often tacit security coordination. In April 1977 a Kuwaiti military delegation headed by Director of the Kuwaiti Armed Forces, Colonel Wajih al-Madani (a Palestinian), arrived in Amman. The delegation met with a number of high-ranking Jordanian officers at the General Command and acquainted itself with the laws and regulations of the recruiting and general mobilization directorate, as Kuwait was scheduled to introduce compulsory military service in 1978. 12 Perhaps not surprisingly then, in an interview with Jordan's semi-official daily al-Ra'i, Kuwaiti Defense Minister Sa'd' Abdallah Salim al-Sabah commented on the military aspect of relations: "we have and still are sending many officers of various ranks to attend military colleges, institutes, and schools in Jordan to be trained on the various types of weapons and to learn to modern methods used in the Jordanian armed forces." 13 In fact, between 1972 and 1982, Jordan seconded its own officers and trained numerous Kuwaitis in Jordanian facilities. The seconding of Jordanians to Kuwait came primarily toward the end of the period, and totaled 17 officers and 69 of other ranks. On the other hand, during the same period, Jordan trained some 595 Kuwaiti officers and 894 men of other ranks, for a total of 1,489, second only to Saudi Arabia and the UAE. 14 In the early 1980's the Jordanian Armed Forces Medical Corps also played a role in organizing the Kuwaiti Armed Forces Medical Corps. 15
Economic Developments
AID
Kuwait was the first Arab country to use economic assistance systematically. Drawing on its tremendous oil wealth, it employed what may be called "dinar diplomacy" both to court friends and to thwart enemies. 16 The primary institutional mechanism for conducting such diplomacy was the Kuwait Fund for Arab Economic Development (KFAED), established in the wake of the first crisis with Iraq on December 31, 1961 to provide long-term, low-interest loans for development projects. Starting with capital of $140 million, the KFAED initially focused its attention on the Arab world. However, in the 1970s its capital was increased to $6.7 billion and eventually the range of countries assisted was expanded to include other Islamic and African states as well. A second institution that channeled assistance was the state reserve fund, which made political loans or grants to Arab states or for Arab causes. While many of these grants are noted in official discussions of aid, many have also been secret. Moreover, some funds promised have not been forwarded. Hence any figures on aid are mere estimates. 17 A list of KFAED loans and government grants during this period is found in Table 11.
Table 11
Kuwaiti Development Aid to Jordan, 1976-1981
| Year | Source | Amount | Project |
| 1976 | KFAED | $8.0 million | 1976-80 Jordanian Development Plan |
| KFAED | $24.2 million | Raise phosphate production | |
| 1977 | KFAED | $30.7 million | Phosphate mine production expansion |
| KFAED | $66.0 million | Husayn Thermal Power Station | |
| Grant | $0.1 million | Bir Zeit University (West Bank) | |
| Grant | $1.5 million | West Bank municipalities | |
| 1978 | KFAED | $35.0 million | Arab Potash Company |
| 1979 | KFAED | N/A | Jordan Fertilizer Company |
| KFAED | $9.86 million | Aqaba phosphate fertilizer production | |
| KFAED | $4.08 million | Dead Sea potash production | |
| KFAED | $6.8 million | Development of Aqaba port | |
| 1981 | KFAED | $27.2 million | Ghor al-Safi irrigation |
| KFAED | $23.8 million | Amman water supply | |
| KFAED | $25.0 million | Jordan Valley Authority Development |
SOURCES: MEED, RSS; 'Alaqat al-Mamlakah.
Following the 1973 war, Kuwait resumed the aid it had promised Jordan at Khartoum in 1967, which had been suspended after the civil war of September 1970. In early 1975 it was reported that the Kuwaiti government had allocated $400 million to the confrontation states in response to the 1974 Rabat summit, $51 million of which was to go to Jordan. 18 This was in addition to the $55 million of regular subsidies that Kuwait provided. 19
However, the Jordanians complained that the Gulf state promises of support made at Rabat were not being fulfilled and that as a result, by the end of 1976, Jordan was truly strapped for finances. According to then Prime Minister Badran, he was forced to cut the budget and struggled each month to find the money to pay the salaries of the bureaucracy and the army. Despite regular visits to Kuwait and the other Gulf states by confrontation state representatives, the response to requests for payment of the Rabat commitments was never a direct "no," just the famous, noncommittal in sha' 'allah. 20 Then, in January 1977 the Kuwaiti government reviewed its budget--including aid commitments--for the year in light of a drastic fall in oil production. 21 Fortunately for Amman, despite the consequent drop in liquidity, the Kuwaitis decided to continue to pay the annual Khartoum-promised contribution of £16 million. Additional good news for Jordan came out of the January 1977 Riyadh meeting discussed in the previous chapter, at which Kuwait and the other support states agreed to pay at least part of their Rabat commitments. 22
Subsequently, in addition to its 1978 agreement in Baghdad to provide a decade of budgetary assistance to the confrontation states, Kuwait also offered concrete demonstrations of support in the wake of the conclusion of the Egyptian-Israeli peace in March 1979, largely in the form of additional development assistance (see Table 11). For example, at the end of a five-day visit to Kuwait in late May 1979 Jordanian Finance Minister Dabbas announced that Kuwait had expressed a willingness to channel more of its surplus funds into development projects in Jordan and to conclude new commercial and transit agreements. 23 This promise was reinforced by the Kuwaiti Finance Minister al-' Atiqi, who was on a week-long visit at the beginning of June for meetings on Arab economic strategy and sanctions against Egypt, but who also discussed the expansion of economic cooperation and trade relations between Kuwait and Jordan. 24
TRADE
Unlike the other states considered in this study, Jordanian-Kuwaiti economic relations were not regulated within the framework of a trade protocol, nor was a standing joint economic committee ever founded. Despite, or perhaps because of, the lack of state intervention, trade between the two countries grew markedly during this period. Throughout the period Kuwait, while increasing its imports of Jordanian products, maintained its place as the fourth largest Arab export market for the kingdom, behind Saudi Arabia, Syria, and Iraq. In 1974 Jordan had exported goods worth $8.4 million to Kuwait, up from $4.7 in 1973. 25 Jordanian exports increased to almost $10 million in 1976, $16.3 million in 1980, and $19.5 million in 1981. 26
As for the other side of bilateral trade, Kuwaiti exports to Jordan during this period were not of great importance and exhibited minor fluctuations: in 1975 Kuwait exported $2.1 million in goods to the kingdom; in 1978, $3.3 million; in 1980, $1.86 million; and in 1981 $1.55 million. The amirate was only the fifth largest Arab supplier in 1975 and had dropped to eighth place by 1981. 27
INVESTMENT
After the beginning of the oil boom, the idea of attracting Arab investment to Jordan became very popular, if primarily in the minds of Jordanians, to their continuing disappointment. Statistics on Kuwaiti investment are not available, but the consensus is that it never came close to meeting expectations. In 1975 an agreement was reached between Jordan and Kuwait according to which the Kuwait Real Estate Investment Corporation (KREIC) would invest $100 million in building and development in Jordan. As a first step, the Kuwaiti group purchased 3 million shares (at a cost of $9 million) in the Housing Bank (Bank al-Iskan), but they also made a commitment eventually to purchase 10 million shares. The Kuwaitis were, in turn, allowed one representative, appointed by the Kuwaiti finance minister, on the board of the bank. They were to receive no profits for two years, but were to have priority in buying any new share offerings. The agreement also specified that the Kuwaiti side was to be responsible for finding companies to undertake studies of potential projects; that the two sides would establish a number of joint companies; that the Kuwaiti side was to have up to 50 percent ownership; and that the capital for the companies was to be deposited in Jordanian banks. 28
Jordan then permitted the KREIC to open offices throughout the kingdom, and offered it a variety of special privileges indicative of how anxious Jordan was to promote such investment. For example, its projects needed not be insured and profits were exempt from income and social service taxes for six years. The companies that would be established were not to be considered public sector, would not be subject to currency oversight, were exempted from export regulations at Aqaba, and were permitted to reinvest returns in new projects. For non-Jordanians working in the group, there were to be no restrictions on wage repatriation, and their entry and exit permits were to be facilitated. 29 In March 1976 it was reported that the KREIC had paid its $9 million contribution to the $36 million target capital for the Housing Bank, in implementation of the October 1975 agreement. 30
On April 23, 1977 a KREIC delegation arrived in Jordan for further discussions, which included Crown Prince Hasan, of possible development investment projects. 31 In the meantime, representatives of the Housing Bank had had talks with the Kuwaitis about the possibility of increasing Kuwait's contribution. Shortly thereafter the two sides agreed to establish the Jordan-Kuwait Bank. 32 The bank was established with $15 million, of which 60 percent was Jordanian and 40 percent Kuwaiti. (The leading shareholder, with 25 percent of Kuwait's total capital, was Kuwait's Foreign Minister Shaykh Sabah al-Ahmad al-Jabir al-Sabah.) The Bank was expected to serve the large Jordanian expatriate communities in the Gulf, especially in Kuwait. Its management was interested in assisting in financing various five-year plan projects and in encouraging small industries, which sought comparatively small loans of $30,000- $40,000. The bank's management felt that this was preferable to financing commodity imports. The Jordan-Kuwait Bank was, therefore, to concentrate on lending to industry, agriculture, internal trade, and tourism. The bank was also prepared to make short-term loans to Palestinians in Gaza and the West Bank as long as they had negotiable land on the East Bank. 33
EDUCATION AND LABOR
Other areas in which the two countries had significant cooperation were education and labor. In May 1977 Jordan's Minister of Education, ' Abd al-Salam al-Majali, stopped in Kuwait as part of a tour of the Gulf, aimed at seconding Jordanian teachers to these states. The agreement reached involved coordinating such hiring through relevant committees and with the approval of the Jordanian Ministry of Education. Majali also made clear that Jordan was willing to accept Gulf state students at its teachers colleges and the Technical Engineering Institute. 34 A few months later, a delegation from the Kuwaiti Ministry of Education made a tour of Egypt, Jordan, and Syria to recruit new teachers. 35
During this period Kuwait took second place only to Saudi Arabia in terms of the financial assistance it provided Jordan. While the actual grant aid was less than that forwarded by Saudi Arabia, development aid from the KFAED was far more extensive. The critical role that Kuwait thereby played in ensuring Jordan's budget security appears to have been in exchange for traditional internal and military security cooperation from Jordan, and as part of a broader Kuwaiti policy aimed at "buying friends" in the area to reduce its vulnerability. Political relations between the two were quite good, and the Kuwaitis seem to have made a point of providing additional development aid in the wake of the Egyptian-Israeli treaty to make sure that Jordan would not go the way of Sadat, a policy which appears to have been successful. Private sector economic relations also flourished, unregulated and unstimulated by special government protocols or agreements.
Gradual Economic Retreat 1982-1990
Political Developments
The Iran-Iraq war not only increased financial and commercial hardships on Kuwait, it also exacerbated longstanding, if largely latent, communal tensions between Sunnis and the minority Shi'i population. As the war continued and Kuwait's traditional, preferred position of neutrality in the Gulf region became untenable, Shi'i feelings of discrimination and dissatisfaction grew as the country tilted more and more in a pro-Iraqi direction. Internal violence and sabotage increased along with the external military threat from Iran. 36 December 1983 witnessed the worst instances of violence in the amirate, as on December 12 explosions at the International Airport, the U.S. and French embassies and several other key installations rocked the country.
In response, Amman sought to demonstrate support for Kuwait in a number of ways. In spring 1984, Husayn sent Chief of the Royal Court Marwan al-Qasim as a special envoy to Bahrayn, Kuwait, the UAE, and Oman to call for Arab cooperation in solving regional problems. On June 3, in a meeting that he requested with Kuwait's ambassador in Jordan, Prime Minister Ahmad 'Ubaydat expressed Jordan's concern over the continuation of the conflict in the Gulf and its escalation to include attacks against Kuwaiti and Saudi tankers, which had been stepped up beginning in May. On the same day Husayn left for talks with the amir, presumably concerning Kuwaiti security. 37 Relations remained good even following Jordan's unilateral restoration of relations with the still-outcast Egypt. The Kuwaitis responded in much the same way the Saudis had: indirect chastisement of Jordan combined with reaffirmation of the need for Egypt to return to the Arab fold. 38 However, by late spring 1985 consultations between Husayn and the amir focused not only on developments in the Gulf war and developments in the peace process, but also on the threats that the Kuwaitis had made about cutting their Baghdad support because of the drop in oil prices and the marked increase in their own military expenditures. The domestic ramifications of the continuing Gulf war had finally begun to take their toll on the Kuwaiti national budget, and by extension, on the Kuwaiti-Jordanian relationship, especially in the realm of financial support.
Not quite three weeks later there was an assassination attempt against the amir, for which a number of Iraqi Shi'i residents of Kuwait were arrested. However, the major security concern continued to be the Gulf war, as in February 1986 Iran occupied Faw island, a mere 10 miles from Kuwaiti territory. This was followed by a number of veiled and not-so-veiled Iranian threats against Kuwait. In response to these developments, on April 2, 1986, King Husayn told Jane's Defence Weekly that Jordan was ready to support Kuwait in confronting any aggression by the Iranian regime against Kuwaiti territory, if so requested by the amirate. In the meantime, the Kuwaitis were calling upon Jordan and the PLO to return to their dialogue, which had been suspended following the effective freezing of the February 11 accord in February 1986.
The year 1987 began as an extremely important one for Kuwait, as in January it hosted the summit of the Islamic Conference Organization. The successful convening of the conference was a major coup given both the proximity of the Iran-Iraq war and the fact that Egypt was in attendance for the first time since its ejection from most Arab and Islamic organizations following its separate peace with Israel. The first half of 1987 was also critical because in January Kuwait formally requested that the U.S. reflag Kuwaiti vessels and in May the Reagan administration approved the request. On June 22, 1987, the Kuwaiti Minister of State for Foreign Affairs, Sa'ud al-Usaymi, arrived in Jordan on the first leg of a trip that was also to take him to Syria and Iraq. This trip was likely part of a concerted Kuwaiti campaign to convince Arab and other states that it had legitimate reasons for requesting the ship reflagging. 39 In September the Kuwaiti Deputy Prime Minister and Foreign Minister, Shaykh Sabah al-Ahmad, arrived in Jordan with a message for Husayn from the amir, before heading on to Moscow. In the meantime, the Iranians began launching missile attacks against Kuwait. 40 On September 30 Husayn himself made a trip to Kuwait on the fourth leg of a Gulf tour. 41 As the Iranian threats continued Husayn voiced numerous expressions of support for the amirate, and on November 22 Crown Prince Hasan announced once again that Jordan was ready to send troops to support the security of the Gulf. The offer of troops may be understood as in part a Jordanian expression of concern for the security and integrity of Kuwait, in part a gesture of political good will that also included political and moral support, but perhaps also (assuming that Jordan would be reimbursed for its military services) an offer intended to reinforce or revive the dwindling aid relationship between the two.
The November 1987 Amman Arab League summit was of great significance to both Kuwait and Jordan. Devoted almost exclusively to the Gulf war, the summit was, for the first time, able to use oil state financial pressure to move Syria to support the GCC states, to censure Iran, and send a strong signal of desire to end the war. The summit also officially gave member states the option of deciding when to renew ties with Egypt, whose weight as a "returning" member of the Arab world was viewed as a key counterbalance to Iran. Certainly to follow up on the results of the summit and perhaps to cash in for its successful sponsorship, on December 9 Jordan hosted Kuwaiti Finance Minister Jasim al-Kharafi. Al-Kharafi met with Prime Minister Zayd al-Rifa' i, Trade and Industry Minister Raja'i al-Mu' ashshir, and with the king. The following day Kharafi had discussions with Crown Prince Hasan, Foreign Minister Tahir al-Masri, Mu' ashshir, Finance Minister Hanna ' Awdah and Planning Minister Tahir Kan' an. 42 The meetings were followed immediately by a December 12 visit by Husayn to Kuwait. Discussions reportedly covered the Iran-Iraq war, Arab developments, and bilateral relations, but no other details were available. However, Rifa' i and a number of senior advisers accompanied the king 43 and one can, from the timing and from the ministers involved, assume that finances as well as security assistance were high on the agenda.
Regular contact and support continued, as the king dispatched Chief of the Royal Court Marwan al-Qasim to Kuwait in mid-January 1988 and then went himself in mid-March. These discussions likely concerned both the war and the Palestinian uprising, which had begun in December 1987. Seven months later the Kuwaitis praised King Husayn's controversial July 31 step of cutting legal and administrative ties with the West Bank. And both sides breathed deep sighs of relief when in August Iran finally accepted Security Council Resolution 598 calling for a ceasefire in the Gulf war.
However, for Jordan the direct and indirect economic costs of the war had already taken their toll and pushed the kingdom closer and closer to insolvency. First, the value of the dinar began to drop precipitously in the autumn of 1988. Husayn made a visit to the amirate on November 8 for two hours of talks. Less than a month later Kuwaiti Finance Minister Kharafi was back in Jordan for talks with Rifa' i. 44 Whatever the Jordanian arguments or pleas, they were insufficient or ineffective as the Kuwaitis did not increase their aid. But the pleas were also too late, for Jordan's problems ran far deeper than a temporary budget shortfall. In January 1989, for the first time, the kingdom was unable to make its external debt service payment. The Jordanian government-IMF agreement that followed then set the stage for the announcement of austerity measures that eventually triggered the riots of April 1989.
Kuwait was, nonetheless, vocal and forceful in its support for Jordan in the wake of the riots. A decline in Jordan's standard of living was something the Gulf states cared little about. What they did care about, however, was avoiding unrest. Crown Prince Sa'dstated that Jordan's stability was key to broader regional stability and stressed Kuwait's support for the king and the government leadership. 45 To reinforce the Kuwaiti position, Sa'd visited the kingdom on May 1 and Kuwait promised supplemental grant aid.
Given Jordan's domestic economic hardships, the kingdom turned inward to a process of political liberalization following the riots, a procecess that found little, if any, official sympathy among Jordan's neighbors, who no doubt feared a demonstration effect in their own states. In fact, the new freedom of expression in the kingdom led the Jordanian press to criticize roundly Kuwaiti government moves against its nascent pro-democracy movement. Nonetheless, January 1990 ended on a somewhat positive note as Kuwait lifted the ban on the Jordanian newspapers al-Ra'i and al-Dustur 46 imposed earlier in the month amid demonstrations in Kuwait for the reinstatement of the Kuwaiti National Assembly.
In February 1990 Husayn and Prime Minister Badran both received the Kuwaiti foreign minister, who conveyed a message from the amir. A few days later Husayn began an official tour of the Gulf by heading to Kuwait. This was most likely another fundraising tour. The new pitch was the threat posed to Jordanian and Arab security by the influx of Jews into Israel triggered by the opening up of the Soviet political system. Husayn argued that the influx would put further pressures on the Palestinian population under occupation and thus portended a potential expulsion of the indigenous population of the West Bank and Gaza by the Israelis. Whether a problem of content, packaging or audience, the pleas elicited no concrete financial commitments from the Gulf states.
However, suddenly, in July 1990, the focus of concern shifted from the threat of Israel and Soviet Jews to the war drums that seemed to be beating over a border and oil-pumping dispute between Iraq and Kuwait. Jordan and Kuwait were in close consultation about the nascent conflict, as both sought to avoid escalation. On July 22 a Kuwaiti envoy arrived with a message for Husayn from the amir about the Iraqi complaints and held talks with the king. Following the subsequent, failed Jeddah meeting, Husayn led a Jordanian delegation to Kuwait to discuss ways to ensure Arab solidarity in the face of the crisis. The efforts, were, of course, unsuccessful, and Saddam rolled into Kuwait early on the morning of August 2, 1990. Overnight the relationship changed dramatically and to the detriment of both sides. The full impact is discussed in the concluding chapter.
Economic Developments
AID
Grants. The year 1982 marked the beginning of a period of reduced economic interaction between the two countries, a direct result of the impact of the Iran-Iraq war. Not only were oil revenues down, but also internal and external security threats had forced Kuwait to increase its own domestic military spending from $535 million in 1980/81 to $712 million in 1981/82 and to $833 million in 1982/83--the largest increases in thirty years. 47 In response, in September 1982 the Kuwaiti government announced that it would not be bound by the financial commitments made at Baghdad. Nonetheless, the following June the Kuwaiti National Assembly voted to restore to the budget $360 million in aid to the frontline states, despite the recommendation of the economic and financial affairs committee that drastic cuts be made. The assembly did, however, approve the trimming of $65 million from the aid commitment, Kuwait's share of the funds promised but not paid by Libya and Algeria. Interestingly, the debate was held in secret session and the vote on the aid measure was 28 to 23 with 6 abstentions. This exceeded the assembly's elected membership of 50 and suggested that cabinet ministers who were ex officio members had been mobilized to reverse the proposed cuts. 48 Finally, however, on May 30, 1984, the Kuwaiti parliament did vote to decrease Kuwaiti support to the confrontation states by 39 percent in order to pay the amirate's budget deficit. 49
In 1985, as partial compensation for the reneged-upon grants, Kuwait began to provide $50 million a year in in-kind aid. Jordan decided to take the $50 million in fuel oil and in certain chemicals for the Fertilizer Company, an arrangement that lasted until the Gulf crisis. 50 However, in mid-year the Kuwaiti parliament once again called for terminating support to the frontline states in the 1985-86 budget. 51 Again, in only partial compensation, the assembly voted to increase the amount allocated for general foreign aid to $500 million.
These and other moves over the next few years led to subtle strains in the Kuwaiti-Jordanian relationship. Perhaps most disappointing was the Kuwaiti decision not to participate in funding the controversial 1986 Jordanian development plan for the occupied territories. Kuwaiti Minister of Finance Kharafi received Prime Minister Rifa' i on September 10 to review relations, no doubt with a focus on economic and financial ties. Rifa' i returned to Kuwait a month later, accompanied by Jordan's ministers of trade and supply, finance, energy and mineral wealth, as well as the governor of the central bank and several other economic advisers, reportedly to discuss the possibilities of Kuwaiti participation in the politically controversial development plan for the occupied territories announced that summer. 52 Only a few days later, Jordan's finance and planning ministers attended a seminar in Kuwait entitled "Development--Between Planning and Implementation in the Arab Homeland." The participants reviewed the Jordanian 1986-90 economic and social development plan, the development plan for the occupied territories, and Jordanian efforts to bolster steadfastness among the population under occupation. Planning Minister Kan' an met with his Kuwaiti counterpart, the director-general of the Kuwait Development Fund, to review aspects of cooperation between Jordan and Kuwait and explore the possibility of Jordan's obtaining assistance for the implementation of the development plans. 53 On November 9 the Kuwaiti government agreed to continue its financial support for the plans. 54 Ultimately, however, Kuwaiti support for the political sensitive development plan for the occupied territories was not forthcoming, a clear blow to the kingdom and a strong message of support for the PLO over the king following the December 1987 beginning of the Palestinian uprising.
The next major disappointment came at the Arab League summit in May 1988, when the amirate voted, along with other contributors, to forward support for the occupied territories directly to the PLO, rather than through the traditional channel, the Jordanian-Palestinian joint committee. Finally, like its oil state counterparts, Kuwait ignored Jordanian pleas in 1989 for a renewal of the 1979 decade-long Baghdad aid commitment. These decisions appear to have been based on a combination of Kuwaiti economic (austerity) and political (Jordanian competition with the PLO) concerns.
Nonetheless, in August 1989, following the April riots, Jordanian Prime Minister Zayd bin Shakir traveled to Kuwait to deliver a message, presumably in part a plea for funds, from the king to the amir. Upon his return, he stated that as a result of his visit the GCC states would take measures designed to support Jordan economically. 55 Kuwait reportedly offered Jordan $80 million in aid 56 and, on September 5, the Jordanian Minister of Finance reported that Jordan expected the GCC states to deposit some $500 million into Jordanian banks to support the kingdom's economy. 57 In addition, by the end of 1989 it had been agreed that Kuwait, as well as Saudi Arabia, the UAE, Qatar, and Oman would deposit $300 million for Amman's use with the Arab Monetary Fund. According to the agreement, which was intended to shore up the still-ailing dinar, Amman was to pay interest 2 percent below the market rates and the Jordanian government would deposit an equivalent amount in local currency in blocked accounts at the central bank as collateral. The size of the contribution was to be in proportion to the country's financial capabilities, with the largest share, of course, coming from Saudi Arabia. 58
In late June 1990, the Kuwaiti government informed Jordan of its intention to provide $75 million in aid in 1990 in three installments, in addition to further aid estimated at $60 million. This assistance was in support of the Jordanian economy and in accordance with the recommendations approved in May 1990 at the Arab League summit in Baghdad. 59 However, the Iraqi invasion of Kuwait preempted the forwarding of these funds.
decisions appear to have been based on a combination of Kuwa Development loans. Assistance in this area continued to be quite steady, as is clear from Table 12. Nonetheless, there were limits to Kuwait's financial good will. In July 1988 Jordan held debt repayment discussions with the KFAED, following the fund's suspension of disbursements the previous March. Amman's debt to the fund stood at around $200 million at the end of 1987, and the fund announced that disbursements would not resume until a repayment agreement had been reached. 60 Unfortunately, these discussions came just as the Jordanian dinar edged toward the precipice.
In May 1990, on the eve of the Gulf crisis, it was announced that the KFAED would lend $17 million to Jordan's Industrial Development Bank for lending to private sector industry and tourism projects. To date the fund had provided Jordan with twenty-four concessionary loans totaling KD 124 million (worth in 1990 $423.8 million) for use in agriculture, energy, irrigation, industry, mining, tourism, and road construction. 61
TRADE
In 1982 Jordanian exports to Kuwait stood at $19.5 million, just under the 1981 figure. They reached a high in 1983 of $29 million, then dropped to $19.9 million in 1985. Kuwaiti exports to Jordan during this period stood at $2.8 million for 1982 (a 100% increase over the previous year), rose to a high of $8.5 million in 1984, and then dropped below $7.74 million in 1985 and 1986. 62 On October 20, 1986 the two reached an agreement to increase cooperation in the fields of economics and trade. Customs exemptions, investment incentives, tourism, and transport were all covered. 63 Less than a year later, in May 1987, another agreement to boost trade was signed. In September of that year the two agreed to work toward free trade in industrial projects. Phased reductions in customs duties of 20 percent were to begin in January 1988. 64 Jordanian exports to Kuwait rose to $27.6 million in 1988, making the amirate Jordan's third largest Arab export market. On the other hand, in 1987, Jordanian imports from Kuwait jumped dramatically to $50.5 million and again to $68 million in 1988, making Kuwait the third largest Arab source of Jordanian imports. 65
Table 12
Kuwaiti Development Aid to Jordan, 1982-1990
| Year | Source | Amount | Project |
| 1982 | KFAED | $21.3 million | Electricity distribution scheme |
| KFAED | $8.55 million | Agricultural credit for small farmers | |
| KFAED | $13.6 million | Road construction | |
| 1983 | KFAED | $34.1 million | Raise height of King Talal Dam |
| 1984 | Kuwait Nat'l. Bank | $50.0 million | Development projects |
| 1986 | KFAED | $24.7 million | Zarqa River Basin development |
| KFAED | $4.4 million | Development of animal resources | |
| 1987 | KFAED | $23.8 million | Aqaba Thermal Power Station |
SOURCES: MEED, RSS; 'Alaqat al-Mamlakah.
INVESTMENT
Despite the regional economic downturn, Jordanians continued to hope and lobby for increased Gulf state investment in the kingdom. The first productive (as opposed to service sector) joint venture between Jordan and Kuwait, the Jordanian-Kuwaiti Company for Agricultural and Food Products, was set up in February 1985. Capitalized at $10.3 million, the company had plans to establish factories to produce macaroni, dairy products, and fodder as well as to raise cattle, poultry, and fish. 66 It was subsequently announced that a Jordanian information and tourism office was also to be set up in Kuwait to promote joint ventures in this sector. About a year later, a Kuwaiti business team arrived in Jordan to study possible participation in local tourism schemes. Members of the delegation also met with Planning Minister Tahir Kan' an, who briefed them on investment opportunities in the 1986-90 plan. 67
During April 1987, Trade and Industry Minister Mu' ashshir and Finance Minister 'Awdah visited Kuwait at the invitation of the Kuwaiti government. During their stay they attended a two-day seminar intended to interest Kuwaitis and expatriate Jordanians in investing in Jordan. Following talks with Kuwaiti investment institutions the two ministers indicated that agreement had been reached upon setting up a joint committee to follow up financing and implementation of viable schemes in Jordan. The Jordanian delegation explained the local investment climate and presented details of 25 projects valued at $600 million in the industrial, trade, agricultural, financial, and tourist sectors. They pointed out Jordan's shortages in the production of cereals, meat, and milk, and added that a number of the proposed projects were meant to ensure self-sufficiency in these areas. 68
Shortly thereafter, it was reported that preliminary discussions were under way on a plan for Jordan and Kuwait to list their stocks on each other's share markets. Arab investors were already permitted to buy Jordanian stocks through the Amman Financial Market, although they were limited to 49 percent holding in firms in the financial, insurance, and trade sectors. The Jordanians hoped that the joint listing of stocks would give Kuwaiti investors more information on the Jordanian economy and stimulate more interest, particularly in primary issues of stocks. 69
Several other joint agreements were concluded during this period as well. In the spring of 1988, an accord was reached between the Kuwait Public Transport Company and the Jordan Express Transport Company for a bus link between Kuwait and Amman. 70 In March 1989 a liquid fertilizer plant set up by the Jordanian-Kuwaiti Agricultural Company was opened in Aqaba. With an annual capacity of 45,000-60,000 tons, only about 10,000 tons of which was to be for the domestic market, this plant was the first of its kind in the region. It planned to target its exports at Saudi Arabia, Egypt, Turkey, North Yemen, and Sudan. 71
EDUCATION AND LABOR
Although in June 1985 Kuwaiti Ministry of Education officials were seeking Jordanian teachers for employment in Kuwait, 72 in late spring 1986 there were rumors that some 30,000 expatriates were expected to leave Kuwait by the end of the summer. The communities most affected were the Egyptians and Jordanians. Some people had reportedly been dismissed, others were simply leaving. 73 In the event, however, a total of only 428 families returned with their possessions between January and August, numbers similar to those of returnees in previous years. According to Trade and Industry Minister Mu' ashshir, the Kuwaiti plan to reduce the number of foreign workers by 30,000 in the summer was stopped after mediation by the countries affected, and all Jordanians in public sector employment in the Gulf were assured of their jobs. 74
Kuwait, increasingly besieged internally as the Iran-Iraq war dragged on and as oil prices fell, finally took a series of steps to reduce and ultimately terminate its Baghdad-promised support to Jordan. The loss of this income was a serious blow to the Jordanian economy: it left Saudi Arabia the sole remaining provider of Baghdad support and forced Jordan increasingly to resort to external borrowing to make up the shortfall. Although there was some strain in relations as a result of the decrease in aid (and over the amirate's apparent favoring of the PLO over Jordan in various instances of competition), political relations nonetheless apparently remained cordial, and Jordan regularly expressed its willingness to come to Kuwait's military defense if asked. The emirate did offer assistance to Jordan in the wake of the 1989 riots, and made additional promises in 1990, but aid never returned to the early Baghdad levels--a fact the Jordanian populace remembered clearly as they received the news of the Iraqi invasion of Kuwait in August 1990.
Conclusions
Economic Relations
The use of economic statecraft is quite clear in this case study, but primarily on the Kuwaiti side. The Kuwaitis used direct grants or budgetary support agreed to at Khartoum, Rabat and Baghdad for two major purposes. The first was to strengthen Jordan so that it could continue to serve militarily as a buffer against security threats coming out of the Arab East and to gain Jordan's goodwill to maintain the continuing internal security or intelligence cooperation that was such an important part of the bilateral relationship. The second, more general, purpose was to try to buy goodwill in the region, so that whenever Kuwait provided support, it was seen in other parts of the Arab world as an indication of Kuwaiti benevolence or commitment to a larger Arab cause.
The same was true of Kuwaiti support in the form of the KFAED's highly concessionary loans. Here, the Kuwaitis had a greater say in how the support was used, as the fund placed greatest emphasis on funding projects that contributed to the development of economic infrastructure. Again, goodwill was also purchased or "rented," as was, if more indirectly, stability through Jordan's ability to deliver more and better services to its people.
The controversial Kuwaiti decision in 1984 to cut back on its Baghdad payments and replace them in part with in-kind support in 1985 appears to have been the result of genuine economic and budgetary troubles in Kuwait, not an attempt at "screw tightening" or an indication of waning Kuwaiti interest in relations with the confrontation states (although given the internal security problems the country faced at the time it was probably also indicative of a greater need to turn inward). Nevertheless, Jordanian policymakers stressed that dealing with the Kuwaitis was not pleasant; unlike the Saudis, they were haughty and much less readily forthcoming. Jordanians recount with bitterness the fact that the king was forced to make repeated fundraising trips to the Gulf during which he often in effect had to beg for assistance. As early as 1988-89, the Kuwaitis reportedly asked the Jordanians why they had or needed the high quality educational, communications, and transportation infrastructure that they had built. In other words, they seemed to begrudge the Jordanians the standard of living and the infrastructure that their own development loans had helped to finance. 75 Whether the Jordanian charges are fair or not is not the point. What is important is that however much the Kuwaitis gave Jordan, when it came time to call in the presumed accumulated markers from over the years at the time of the Iraqi invasion of Kuwait, the Kuwaiti "investment" in Jordanian support and goodwill proved insufficient. The average Jordanian had nothing but contempt for the Kuwaitis in August 1990, the millions in aid over the years notwithstanding.
What economic instruments were available to the Jordanians in their dealings with the wealthy Kuwaitis? The Jordanians, on a number of occasions detailed above, made concerted efforts to court Kuwaiti investors. Whether in the form of interesting the Kuwaitis in projects that were part of the five-year development plans or in joint ventures such as the Jordan-Kuwait Bank or the Jordanian-Kuwaiti Agricultural Company, the Jordanians were keen on Kuwaiti investment and were willing to offer attractive incentives and exemptions to encourage the Kuwaitis to direct their dinars Jordan's way. That the Jordanians were less than successful in these efforts was in large part the result of a broader Kuwaiti policy which directed overseas investment, as opposed to loans or grants, to the much more secure and lucrative markets of Western Europe and the United States. Kuwaiti investment in other Arab states was insignificant: only 5 percent of Kuwait's funds were invested in the developing world, including Arab states. 76 Consequently, there does not appear to have been any deliberate discrimination against Jordan for political or other reasons, simply a desire to place investment capital in countries in which it would realize the greatest return. The Kuwaitis' meager investments in Jordan should be seen as largely positive, if really only symbolic, economic instruments with clearly political goals, just as their desire to invest the vast majority of available funds in the West should be seen as strategically economic, not political. Those Kuwaiti investments that were directed toward the kingdom were by no means central to the Jordanian economy or the state budget, although they were seen by the Jordanians as a potential engine for greater economic growth. The most critical element was always the financial assistance.
While trade was important in this relationship, its bases were somewhat different than in the other case study countries. In the first place, although a number of meetings resolved to establish some sort of joint council or committee for various economy-related purposes, none ever had the importance of the joint higher committees established between Jordan and Syria, Iraq or Egypt. Trade between Jordan and Kuwait was clearly the domain of their respective private sectors. One finds few references to official trade talks, nor is there anything like the setting of trade targets or quotas between these two countries. Also characteristic of the trade relationship was that Kuwait was far more important to Jordan as an export market than was Jordan for Kuwait. The majority of the Kuwaiti export totals to Jordan consisted of petroleum products of an insignificant amount for the amirate in the overall scheme of things. Given Kuwaiti financial capabilities the amirate could easily have replaced Jordanian goods with those of other countries.
Although Jordanian expatriate labor in Kuwait was not discussed under the rubric of trade, in summary, it may make sense to think of it in those terms and as a form of economic statecraft. The one commodity the Kuwaitis were keen to import from Jordan and for which they had limited alternative markets was skilled Arab labor. The vast majority of Jordanians who sought work in Kuwait left Jordan well before the period covered in this study. Indeed, the 1967 war triggered the last wave of migration to the Gulf and by the mid-1970s, the Kuwaitis had begun to tighten considerably the conditions for granting new work permits. Nonetheless, many of those who had been in the country for decades had become an integral part of its commercial or governmental sectors, so that both the Kuwaiti private and public sectors had an interest and a hand in importing Jordanians. This study has pointed to the continuing Kuwaiti need for Jordanian teachers (who were overwhelmingly preferred to Egyptians). Whatever the sector and its needs, the Jordanian government viewed the presence of its expatriates in the Gulf as a key source of foreign currency through the remittances they sent home.
Another set of commodities that may fit under the rubric of trade if interpreted broadly were the military and intelligence services rendered Kuwait by Jordan. Whether in the form of Jordanian officers seconded to Kuwait, Kuwaitis sent to train in Jordan, or cooperation in the realm of security, Jordan was exchanging its expertise for Kuwaiti payment. In this realm, too, as in the field of expatriate labor discussed above, both sides were well-served. And, in the case of security cooperation, it was the Jordanians who in fact had the upper hand because of superior experience and training. It was they who provided the expertise to the Kuwaitis and not the other way around, except perhaps in terms of some Kuwaiti monitoring of the activities of Jordanian Palestinians in Kuwait.
While no formal alliance existed between Jordan and Kuwait, throughout the period under study there was tacit and strong cooperation in a variety of fields: upholding regional and internal security; monitoring their respective Palestinian populations; moving ahead on the Middle East peace process; and working to end the Gulf war. Both states are small in size, surrounded by economically, politically and militarily more powerful neighbors, and conservative in orientation (although Kuwait was more of a neutral in the Cold War than was Jordan).
Building on the clear coincidence of interests on these grounds, Kuwait courted Jordan with substantial grants and loans as a way of ensuring the kingdom's stability, which was seen as reinforcing order in the amirate. In the Arab world, the Kuwaitis' concern for stability was apparent in its concentration of loans to (at that time) status quo states: Jordan, Tunisia, Sudan, Morocco, Egypt, and North Yemen received more than 65.3% of the loans between 1962 and 1989. Jordan had the honor of first place, having received $401 million or 14.5% of Arab loans and 7.4% of total loans. 77 According to the official figures on cash contributed, Jordan received $2.154 billion or 7.18% of the total. (Iraq received $13.3 billion, 44.4%; Egypt--prior to 1979--$7.12 billion.)
Also relevant to the question of security and stability was the presence of the large Jordanian expatriate community in Kuwait. This community, numbering about 350,000 in its heyday (about 85-95% of which was estimated to be Palestinian) 78 had a key role in commerce and the bureaucracy and sent home substantial remittances. While the Palestinians were often referred to as a potential threat to the Kuwaiti regime, in fact they were among its most loyal supporters, as was demonstrated at numerous points during the difficult times attending the Iran-Iraq war. However, what role did they play in the bilateral political relationship? Both countries were clearly interested in monitoring any political activities by community members, but that was only one aspect of their "political significance." In interviews, Jordanian decisionmakers uniformly contended that the presence in Kuwait of these Palestinians did not give Jordan any special power in the amirate. Most had gone to Kuwait as individuals, and were not seconded by the Jordanian government. Since most had left Jordan for Kuwait in the 1950s or 1960s, their only real contact with Jordan was a passport, which was considered by most a document of convenience; hence, they felt no political loyalty or affiliation to the kingdom. Indeed, most went out of their way to avoid official Jordanian offices. For their part, the Kuwaitis treated these Jordanian citizens as Palestinians, as evidenced by the fact that after the founding of the PLO in 1964, the Kuwaiti government collected a "liberation tax" from them, which then went to the coffers of the Palestine National Fund, the PLO's treasury. Thus, if anything, this community gave the PLO or Palestinian concerns, not the Jordanian government, weight in Kuwaiti decisionmaking--a fact that on occasion worked to Jordan's disadvantage.
Indeed, despite the centrality of the "economic aid-for-security" equation to Jordanian-Kuwaiti relations, Jordanian-Gulf state diplomatic relations were often affected by developments in the Palestinian-Jordanian or the PLO-Jordanian theater. The Gulf states were clearly interested in maintaining good relations with both the PLO and Jordan, since one of the basic principles of Gulf state diplomacy has been that open inter-Arab rifts of any type are to be avoided. In the case of Kuwait, the only instances in which the amirate openly sided against Jordan in Jordanian-Palestinian disputes were in the case of the 1970 military assault against the Palestinian resistance movement, in 1987 in denying the Jordanian government assistance for its development plan for the occupied territories, and in supporting the Arab consensus at the 1988 summit to channel funds for the occupied territories directly through the PLO, deliberately bypassing Jordan.
In sum, with successes and failures, and certainly with pleading and haggling, Kuwaiti aid was a constant, if gradually declining, feature of the relationship throughout the majority of the period under study. So was political and diplomatic cooperation. Unlike in the case studies that follow, this relationship did not witness a major political shift against which to judge the role of economics until the Gulf crisis. What is clear is that Kuwaiti financial assistance was critical to the Jordanian budget; indeed, the drop in Kuwaiti aid to the kingdom helped lead the kingdom to increase its external borrowing, thereby contributing to the economic decline of the late 1980s. Efforts to maintain good relations with the Kuwaitis in order to gain needed support, as well as the continuing appeals for assistance after aid levels had dropped, should all be viewed as part of Jordanian efforts to achieve budget security.
Jordan's failure to convince the Kuwaitis to maintain the level of assistance promised in 1979, and its inability to win Kuwaiti (as well as other Gulf state) support for renewal of the ten-year-old Baghdad aid commitment certainly affected Jordanian popular response when Iraqi troops rolled into Kuwait: Jordanians displayed amazingly little sympathy for the newly occupied Kuwaitis. Nor is it coincidental that the kingdom's stance in the Gulf war (neutrality on the official level, pro-Iraq on a popular level)--the major alliance shift in this relationship--followed the years of steady decline in financial support. The drop in this assistance combined with other domestic economic and political problems in Jordan had begun to change the underpinnings of the regime in Jordan. As a result, and unfortunately for the Kuwaitis, by the time they sought to call in their cards for years of economic assistance, the king could no longer respond to foreign policy or other challenges in the same way as he might have in the past. This subject is covered in greater detail in the concluding chapter.
Note 1: Interview with former Prime Minister Zayd al-Rifa'i, July 11, 1992; interview with Bassam al-Sakit, former economic advisor to the crown prince, October 8, 1991. Back.
Note 2: MEED, August 13, 1976. Back.
Note 3: Interview with former Chief of Jordanian Intelligence and former Prime Minister Mudar Badran, July 19, 1992. Back.
Note 4: FBIS, December 19, 1977. Back.
Note 5: FBIS, July 10, 1979. Back.
Note 6: FBIS, July 12, 1979. Back.
Note 7: Royal Scientific Society, 'Alaqat al-Mamlakah al-Urdunniyyah al-Hashimiyyah bi-Dawlat al-Kuwayt, 1978-1988 (Amman, 1990) (hereafter Alaqat al-Mamlakah, p. 2. Back.
Note 8: FBIS, May 13, 1980. Back.
Note 9: MEED, May 16, 1980. Back.
Note 10: Royal Scientific Society, 'Alaqat al-Mamlakah, p. 6. Back.
Note 11: MECS, 1981-82, pp. 68-89. Back.
Note 12: FBIS, April 12, 1978. Back.
Note 13: FBIS, December 22, 1977. Back.
Note 14: Anthony Cordesman, Jordanian Arms and the Middle East Balance (Washington, D.C.: Middle East Institute, 1983) Table 3, p. 22. Back.
Note 16: Abdul-Reda Assiri, Kuwait's Foreign Policy: A City State in World Politics, (Boulder: Westview, 1990), p. 10. Back.
Note 18: MEES, April 8, 1975. Back.
Note 19: MEED, February 14, 1975. Back.
Note 20: Badran interview. Back.
Note 21: MEED, February 4, 1977. Back.
Note 23: MEED, May 25, 1979. Back.
Note 24: MEED, June 8, 1979. Back.
Note 25: MEED, June 6, 1975. Back.
Note 26: Statistical Yearbook, selected years. Back.
Note 28: "Cooperation Agreement in the Fields of Building and Development, October 29, 1975," in Hashemite Kingdom of Jordan, Ministry of Industry and Trade, Majmu' at al-Ittifaqiyyat al-Iqtisadiyyah w-al-Tujariyyah bayna al-Mamlakah al-Urdunniyyah al-Hashimiyyah w-al-Duwal al-' Arabiyyah [Compendium of Economic and Trade Agreements between the Hashemite Kingdom of Jordan and the Arab States] Part 2 (Amman: 1985), pp. 245-248. (Hereafter, Majmu' at 2). Back.
Note 30: MEED. March 12, 1976. Back.
Note 31: MEED, May 6, 1977. Back.
Note 32: MEED, April 1, and May 20, 1977. Back.
Note 33: MEED. October 21, 1977. Back.
Note 34: FBIS, May 31, and June 6, 1977. Back.
Note 35: MEED, July 29, 1977. Back.
Note 36: See Assiri, chapter 4. Back.
Note 37: FBIS, June 5, 1984. Back.
Note 38: MECS, 1983-84, p. 139. Back.
Note 39: Assiri, p. 106. Back.
Note 40: FBIS, September 8, 1987. Back.
Note 41: FBIS, October 1, 1987. Back.
Note 42: FBIS, December 11, 1987. Back.
Note 43: FBIS, December 14, 1987. Back.
Note 44: FBIS, December 8, 1988. Back.
Note 45: FBIS, April 24, 1989. Back.
Note 46: FBIS, January 30, 1990. Back.
Note 48: MEED, June 10, 1983. Back.
Note 49: Royal Scientific Society, 'Alaqat al-Mamlakah, p. 3. Back.
Note 50: Interview with Sa'dal-Tall, Director-General of the Jordan Petroleum Company, July 13, 1992. Back.
Note 51: Royal Scientific Society, 'Alaqat al-Mamlakah, p 4. Back.
Note 52: FBIS, October 20, 1986. Back.
Note 53: FBIS, October 29, 1986. Back.
Note 54: Royal Scientific Society, 'Alaqat al-Mamlakah, p. 4. Back.
Note 55: FBIS, August 11, 1989. Back.
Note 56: MEED, August 25, 1989. Back.
Note 57: Royal Scientific Society, 'Alaqat al-Mamlakah (1989 supplement) p. 15. Back.
Note 58: MEED. December 15, 1989. Back.
Note 59: FBIS, June 20, 1990. Back.
Note 60: MEED, July 28, 1989. Back.
Note 61: MEED, May 11, 90. Back.
Note 62: Statistical Yearbook, 1990. Back.
Note 63: MEED, October 25, 1986. Back.
Note 64: MEED, September 12, 1987. Back.
Note 65: Statistical Yearbook, 1990. Back.
Note 66: MEED, February 15, 1985. Back.
Note 67: MEED, June 28, 1986. Back.
Note 68: FBIS, April 28, 1987; MEED, May 2, 1987. Back.
Note 69: MEED, May 16, 1987. Back.
Note 70: MEED, May 6, 1988. Back.
Note 71: MEED, March 31, 1989. Back.
Note 72: MEED, June 22, 1985. Back.
Note 73: MEED, May 31, 1986. Back.
Note 74: MEED, September 1986. Back.
Note 75: Interview with the late Khalil al-Salim, former head of the Jordanian Senate Finance Committee and former Governor of the Central Bank, October 15, 1991. Back.
Note 78: Bilal al-Hasan, Al-Filastiniyyun f-il-Kuwayt, (Beirut: PLO Research Center, 1974), p. 11, note. Back.
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