Jordan's Inter-Arab Relations: Introduction

Jordan's Inter-Arab Relations: The Political Economy of Alliance Making

New York Chichester, West Sussex

1994

Introduction:
Economics and Security in the Third World

The end of the Cold War has called into question many of the prevailing assumptions in international relations regarding appropriate topics and region of study. One important change has been a growing acknowledgment by scholars of international politics of the importance of domestic politics. ₁ Explanations of state behavior had long been based on a country's place and relative power (usually defined as military or technological power) in the international system; however, as a result of the momentous changes that accompanied the collapse of the Soviet Union, internal factors such as ethnic divisions, the domestic economy, and the nature of the state itself, have received greater attention. At the same time, as the threat of superpower confrontation has dissipated and conflicts elsewhere have threatened regional and international security, more attention has been devoted to another largely neglected topic, the countries outside the former East-West framework, the states of the developing world.

The combination of a growing interest in the Third World and in the role of domestic politics has also been accompanied by a reexamination of the very meaning of "security." The field of security studies was traditionally concerned overwhelmingly with external military threats to states. In recent years, however, a number of scholars have attempted to reformulate the concept to include considerations of environmental degradation, population growth, domestic insurgencies, and economic challenges, such as foreign debt, the preservation of markets, and more general questions related to obstacles to economic development. No new single definition of security has emerged from the debate that has ensued, neither from a developed world nor a developing world perspective. Clearly, however, the traditional notion of security as measured by numbers of tanks and warheads is giving way to a more comprehensive understanding of the potential sources of threat, many of which may be domestic and need not be military in nature. ₂

The study that follows explores a number of issues related to both the importance of domestic politics in explaining interstate behavior and a broadened understanding of security in the developing world. While it was launched in part as a result of dissatisfaction with previous work on the international relations of third world states, particularly those studies that dealt with the seemingly ever-shifting kaleidoscope of Middle East alignments, driving this approach is the hunch that crossing the once formidable barriers between the subfields of security studies and political economy might produce new insights into some long-standing questions regarding foreign policy and alliance politics. ₃ The study was begun inductively, in an attempt to discover what patterns might emerge from weaving together the previously unwritten economic histories of several bilateral relationships with the somewhat better known (but also largely unwritten) story of the "high politics" of bilateral and Middle East regional relations. As the research progressed, it became clear that a focus on the domestic economy, in particular on domestic revenue sources, rather than on balancing military power or threat might indeed be the key to understanding and predicting alliance and alignment shifts. Gradually, the concept of financial or budget security, defined as ensuring sources of state revenue or reducing budgetary vulnerabilities, emerged as central to understanding the alignment decisions in the cases studied.

The country upon which this work focuses is the Hashemite Kingdom of Jordan-a small state, regularly described as vulnerable, largely because of its regional position and role. Since 1948 it has been a party to the Arab-Israeli conflict, the confrontation state with the longest border with Israel. Given most scholars' long-standing preoccupation with state-level factors, geostrategic location, and relative military might, it is not surprising that analysts have focused their attention almost exclusively on Jordan's role in this conflict (and its attendant security concerns), and have then derived from them explanations of the kingdom's foreign policy more generally.

The problem with relying on such a mono-causal explanation is that Jordan's regional position cannot always or, this work will argue, even in most cases, account for critical foreign policy moves; indeed, in some instances it can account for the move taken as well as its opposite. As we shall see in the case studies, Jordan's place in the regional system cannot explain the Jordanian-Syrian alliance of 1975-77, the Jordanian-Iraqi alignment beginning in 1979, Jordan's attempted rapprochement with Syria in 1983, nor its reestablishment of ties with Egypt in 1984. All of these were key, and in some cases controversial, foreign policy moves.

The explanation developed here does not deny the role of external factors (systemic or regional) in conditioning or constraining Jordan's foreign policy options; indeed, it lays them out clearly in the beginning. Nonetheless, it argues for examining another set of generally neglected factors as more specifically determinant of the kingdom's behavior. Rather than pointing to traditional notions of balancing or bandwagoning based on relative power or threat, the evidence suggests that economic variables, particularly the structure of the kingdom's revenues and the financial imperatives they imply, can often better explain an alignment or alliance shift.

Because of the country's involvement in the Arab-Israeli conflict and because of the range of factors--small size, small resource base, small population--that indicate the kingdom's vulnerability, from the point of view of those who focus on external security and system structure, Jordan constitutes a "hard case" about which to make a domestic economic structure argument for alliance shifts. Nonetheless, examining its regional alignment shifts against the background of bilateral and multilateral economic relations demonstrates how economic exigencies and structures, rather than military strength or power politics, can better explain foreign policy, even of a country that has officially been at war since 1948.

In the early stages of defining this project, it was clear that in order to say anything meaningful about Jordan's regional foreign policy, several bilateral relationships would have to be studied. In the first place, undertaking a single bilateral case study was unlikely to generate a sufficiently convincing generalization about the role of economics in alignment shifts: the "n" would simply be too small, and, without further cases, could be assumed to be an aberration rather than a more general tendency. Second, my years of observing and studying inter-Arab politics have demonstrated that Arab country A's relationship with Arab country B becomes fully comprehensible only in the context of A's and B's relations with other regional actors (state or non-state). ₄ In other words, the dynamics of, for example, Syrian-Jordanian bilateral relations, will rarely be fully apparent if one studies solely Syrian-Jordanian interaction. One must also be aware of what is transpiring in Syrian-Saudi relations or Jordanian-Egyptian relations to comprehend the dynamic at work in the first bilateral relationship. While it is far from profound to argue that a state's relations with another state may be affected by developments in each one's relations with other states, in the Middle East, the complex and shifting nature of intraregional relations are so clearly a central part of regional leaders calculations that to overlook such considerations would be to leave out a potentially key part of the explanation.

The individual five case study countries--Saudi Arabia, Kuwait, Syria, Iraq, and Egypt--were selected for several reasons. They are all Arab countries, and they are the countries with which Jordan has had the most frequent and intense regional interaction. Moreover, they represent different economic orientations and domestic economic structures, thus providing a basis for examining and contrasting how economic factors may have played a role in bilateral relations.

For example, Egypt, Syria, and Iraq each have large public sectors, important agricultural sectors along with an emphasis on the development of basic industries, soft currencies (hence various foreign exchange restrictions), and a variety of protective tariffs or customs walls. Kuwait and Saudi Arabia, on the other hand, have traditionally operated according to free market principles, are largely dependent upon oil, and have easily convertible currencies.

In terms of Jordan's foreign aid relationships, Iraq (for a short period before it became mired in the Iran-Iraq war), Saudi Arabia, and Kuwait were major aid donors, either in the form of loans through their respective state development funds, or through their contributions to the kingdom mandated by resolutions of Arab League summits in 1967, 1974, and 1978. At the same time, Saudi Arabia and especially Kuwait imported substantial numbers of Jordanian expatriates over the years to build and staff their state bureaucracies and later, their respective private sectors as well. Thus, these countries played a key role, not only as employment safety valves, but also as sources of hard currency through the remittances sent home by expatriate Jordanians.

All of these countries were also important trading partners for Jordan during the period under examination (or at least parts thereof), but to varying degrees and for different kinds of products. From Saudi Arabia and Iraq, Jordan has been an importer of oil. To Saudi Arabia, Kuwait, and Iraq, Jordan has been a major exporter of fruits and vegetables, as well as labor. In the 1980s, the trade relationship with Iraq expanded to the point where Iraq was also a major importer of Jordanian light manufactures and pharmaceuticals. Trade relations with Egypt and Syria have also been important, if less extensive than those that developed with Iraq in the 1980s. Finally, transit trade through Jordan, especially Iraqi, but also Syrian and Saudi, has also been a key source of employment and revenue for the kingdom. Since the study was conducted inductively, it was posited at the beginning that any or all of these factors may have been significant in Jordan's bilateral relationship with each.

An examination of the political realm also reveals important bases for contrast and comparison. Egypt, Syria, and Iraq have all had or continue to have aspirations to regional hegemony, and hence, depending upon the period, have posed potential political or military threats to Jordanian sovereignty or stability. These three states have each had their own experiments with varying brands of pan-Arabism and socialism, leading them at times to seek to undermine the Jordanian monarchy. Moreover, since Jordan has been a moderate monarchy, like Saudi Arabia and Kuwait, ensuring Jordan's stability was a key Saudi and Kuwaiti concern, and Jordanian military advisers have trained, served in, or advised the military and security apparatuses of Kuwait and, to a lesser extent, Saudi Arabia.

In terms of the Arab-Israeli conflict and its role in Jordan's bilateral relations with these states, Egypt left the group of confrontation states to make peace with Israel in 1978, thus dealing itself out of the Arab mainstream for the better part of a decade, while Syria, like Jordan, continued to be a confrontation state. Jordan remained critical to all these countries because of its relationship to the Palestinians, its long border with Israel, and hence, its centrality to the peace process. Not surprisingly then, Husayn's stance on the Palestinian issue and the peace process have been key to each partner's calculations at various points.

As for extraregional alliances, Egypt, like Jordan, had a close relationship with the United States throughout most of the period under examination. So did Saudi Arabia, if less openly so until the 1990 Gulf crisis. Iraq underwent a shift from being a Soviet client to a regular U.S. customer until the invasion of Kuwait, while Kuwait maintained a fairly neutral position, at least until the oil tanker reflagging in 1987. Syria was the only state that maintained close relations with the Soviet Union during the entire period under consideration. Thus, as is the case with the economic relationships, the political relationships are also quite varied.

The five bilateral relationships are studied over an approximately fifteen-year period, beginning in the mid-1970s and continuing through the Gulf crisis. This period was delineated for several reasons. First, there was a need to cover a long enough period to monitor changes in Jordan's economic and political ties with the five case study countries through several instances of improvement or deterioration in regional political relations and in economic fortunes. For example, on the economic front, by beginning the study in the mid-1970s, the regional and domestic effects of the post-1973 oil boom may be examined, as may the effects of the recession of the early and mid-1980s attending the Iran-Iraq war and the drop in oil prices. Moreover, during this period, Egypt, Syria, and Iraq all embarked upon a process of economic liberalization, while Jordan itself in the mid-1980s tried further to liberalize its already relatively free market economy.

On the political level, this period witnessed a number of important shocks to or crises in the Arab system, all of which have affected Jordan's regional position and relations. First, the 1973 war set in motion a series of events that led in 1974 and 1975 to disengagement agreements between Egypt and Israel on the one hand, and Syria and Israel on the other. Also, not coincidentally, the Lebanese civil war, which had political and economic ramifications beyond the borders of the small state, began in 1975. By 1979, the disengagement between Egypt and Israel had developed into a full bilateral peace, the first between an Arab state and Tel Aviv. This resulted in the effective isolation, if not expulsion, of Egypt from the Arab system, thus setting in motion developments with ramifications throughout the region. A brief political flirtation between Syria and Iraq in 1979 came to naught and the two rival Ba'th parties returned to their feuding, with its implications for inter-Arab politics. Relations between Jordan and Syria, which had been on the road to increasing economic and political integration, if not union, in 1978, deteriorated to a point at which Syria massed troops on the Jordanian border in December 1980, and were not repaired until 1985. At approximately the same time, Jordanian-Iraqi relations, strained by the 1970 civil war in Jordan but now beginning to improve as a result of the closing of Arab ranks in the face of Sadat's defection, moved to a new level of cooperation, just before the outbreak of the Iran-Iraq war.

The early 1980s witnessed the Israeli invasion of Lebanon, Syrian attempts to establish an alternative Palestinian leadership, and Jordanian attempts to reassert Hashemite claims to speak for the Palestinians of the occupied territories. In the meantime, as Egypt provided increasing support to Iraq for its war effort, Jordan was working toward rehabilitating Egypt's Arab image. The period, therefore, also covers the return of Egypt to the Arab League, the establishment of On the politicathe Arab Cooperation Council, the political liberalization in Jordan, and the Gulf crisis.

Thus, a careful examination of Jordan's relationship with five different Arab countries, countries with varying political and economic structures and whose relationships with Jordan have passed through periods of both political and economic flourishing and decline, should provide a sound basis for broad comparison and for generalizations regarding the role economic factors and considerations may play in alliance and other foreign policy considerations.

Constructing much of the story told in the five case studies required collecting data, not only or primarily on high politics-- Arab League decisions, mini-summit outcomes, and the like--but also on low politics, the day-to-day interaction in both the economic and political spheres. Baldwin has argued that it is a mistake not to view international economic exchange as well as other "low level" economic exchange as extremely important techniques of statecraft. ₅ Moon has made a similar argument about foreign policy in general, stressing that emphasizing the headlines seriously neglects some of the most important elements in the foreign policies of small states: capital controls, exchange rate valuation, commercial policies, barriers to trade, nationalization, and foreign investment restrictions all should be seen as a part of foreign policy. ₆ Thus the methodology used involved first constructing the economic and political histories of the bilateral relationships. This was done through reliance primarily on the Foreign Broadcast Information Service and Middle East Economic Digest, supplemented by various original Arabic primary sources, including interviews with a variety of former economic and foreign policymakers and advisers. After the two sets of histories were constructed they were then woven together to determine what the historical record tells about the importance of economic considerations in foreign policy, and most specifically, alignment decisions.

The conclusions that emerged, it must be noted, are based on informed analysis of a preponderance of the available evidence. While scholars who write on the advanced industrialized countries may rely on a variety of official publications giving economic and other data, in the developing world such statistics often are simply not available. In the case of Jordan, for example, military borrowing and spending levels, which are critical but missing pieces of my analysis, are not made public. Just as often, statistics that are available are inaccurate, incomplete, or not comparable across time for a variety of reasons. Moreover, those who study the third world are not in a position simply to wait until a 25-year rule expires for the declassification or release of documents. One works under the assumption that such documents will probably never be released, or may never have existed in the first place. Finally, having conducted research in Jordan in the mid-1980s I am well aware that had the Hashemite Kingdom of Jordan not embarked upon a process of political liberalization in 1989, I might well not have been able to gain access to many of those whom I interviewed, and the interviews I might have conducted in the absence of the liberalization would likely have produced far less in the way of valuable information.

For some, these obstacles would suggest that a study such as this should not have been attempted, or that its conclusions are suspect. As for the former contention, the idea that we should avoid the study of major areas of the world because we have less than perfect evidence is cowardly and exaggerates the accuracy of the data available on Western states. As for the latter, research on this level of politics in the developing world is often like working on a jigsaw puzzle with many missing pieces. The trick is to combine all the existing pieces in such a way as to make the most coherent picture, in the process not excluding pieces that may complicate the picture simply for the sake of parsimony. I have followed that approach in collecting my data and in trying to make sense of it all. Finally, I do not contend to have proven anything, but simply to have suggested through a careful gathering and examination of evidence from a variety of sources a novel and, I believe, better way of explaining foreign policy and alliance decisions by giving primacy to economic variables.

The study that follows is divided into three parts. The first, consisting of the first two chapters, sets the theoretical framework and the stage. Chapter 1 reviews previous work done on the impact of economics on foreign policy, on the concept of economic security and on third world alliance behavior in order to lay the basis for the development of the concept of "budget security." Chapter 2 discusses in detail the structure of the Jordanian economy and of state revenues, along with the process of economic decisionmaking in the country. Particular emphasis is placed on examining which governmental or societal forces play a role in shaping foreign policy.

The case study section follows. The first two chapters detail Jordan's relations with its two most consistent and generous foreign aid, or high-level exchange, providers over the years: Saudi Arabia and Kuwait. Familiarity with developments in these cases is critical for understanding the case studies of Jordan's relations with Syria, Iraq and Egypt, that follow. It is with these countries that lower-level exchange, such as trade and joint ventures, has been of primary importance, although Iraq serves as a kind of bridge between the two types of relationships.

The presentation in each case study chapter is divided into two or more historical periods. Each period is then subdivided into separate treatments of economic and political developments. Those more interested in the analysis and less concerned with the empirical detail used to substantiate it may want to skip to the summaries that conclude the discussions of each historical period. Moreover, while the argument builds cumulatively through the study, the case study chapters were written in such as way as to stand alone as separate analyses as well. As a result, repetition of some material was unavoidable, although every attempt was made to keep this to a minimum for the sake of those who choose to read all the cases.

The study concludes with a summary of findings, a discussion of the implications of the Gulf crisis for the analysis, and suggestions for broader application of the concept of budget security.

Final Note

It will no doubt strike some students and observers of Middle East politics as bordering on heresy to write a book on Jordanian foreign policy and say so little about the Arab-Israeli conflict. I have two explanations for such an approach. The first is that I discuss in chapter 1 the set of constraining conditions that frame Jordanian foreign policy decisions, and the kingdom's involvement in the Arab-Israeli conflict during this period is certainly prominent among them. I do not deny the role of the conflict, I simply do not focus on it.

As for the second explanation: the Arab-Israeli conflict has always been the lens through which writers have tried to explain Jordanian foreign or domestic policy. I find such explanations boring and tired and, more important for a scholarly endeavor, deficient. It has long been my contention that we should discard the conventional wisdom regarding Middle East politics, reexamine old questions (the answers to which we thought we knew) in different ways, and only if forced to, readmit former answers. In other words, I think, in general, we know far less about the Middle East than we think we do. And, in order to learn more, we are sorely in need of more iconoclastic forays.

What I have tried to do in this work is explore a new approach to understanding inter-Arab relations, and in so doing, it appears to me that the Arab-Israeli conflict itself, as well as the ever-heralded large Palestinian presence in the kingdom, tell us far less about Jordan's regional relations than previous works would have us believe. Indeed, this study demonstrates that the structure of Jordan's domestic economy and the drive to secure state revenues explains far more. This work, therefore, is not for those who are already certain they understand the dynamics of inter-Arab relations. Rather, it is for those who are willing, if not eager, to see conventional "wisdom" about the Middle East challenged.

Note 1: For recent examples see Jack Snyder, Myths of Empire: Domestic Politics and International Ambition (Ithaca: Cornell University Press, 1991) and Helen Milner, "International Theories of Cooperation among Nations: Strengths and Weaknesses," World Politics 44 (3): 466-496. Of course the important work of such scholars as Peter Katzenstein and Peter Gourevitch has long been in this tradition. Back.

Note 2: See for example, Jessica Tuchman Mathews, "Redefining Security," Foreign Affairs (Spring 1989): 162-177; Richard H. Ullman, "Redefining Security," International Security (Summer 1983): 129-153; and Joseph S. Nye, Jr. and Sean M. Lynn-Jones, "International Security Studies: A Report of a Conference on the State of the Field," International Security (Spring 1988): 5-27. Back.

Note 3: Nye and Lynn-Jones, ibid., p. 25. Back.

Note 4: This is also clear in a number of classic works on the "Arab system": Malcolm Kerr, The Arab Cold War (New York: Oxford University Press, 1971); Patrick Seale, The Struggle for Syria (New Haven: Yale University Press, 1987); and Alan Taylor, The Arab Balance of Power (Syracuse: Syracuse University Press, 1981); among others. Back.

Note 5: David Baldwin, Economic Statecraft, (Princeton: Princeton University Press, 1985), chapter 3, especially pp. 40-50. Back.

Note 6: Bruce Moon, "Political Economy Approches to the Study of Foreign Policy," in Charles F. Hermann, Charles W. Kegley, Jr., and James N. Rosenau, New Directions in the Study of Foreign Policy (Boston: Allen & Unwin, 1987) p. 41. Back.