Underlying Economic Tensions Behind the Jordan Protests
Protests over rising gas prices erupted in Jordan on 15 December 2022. Protestors, which include goods and passenger transport drivers, seek to lower gasoline prices and abolish additional taxes on fuel derivatives. On Saturday, Jordanian security forces detained dozens of individuals in connection with the protests, which so far resulted in the death of four police officers. Most notably, the death of Abdul Razzaq Abdel Hafez al-Dalabeh, deputy police director in the Ma’an governorate, led to a series of police raids in the area against what the government called a “terrorist cell”. During the protests, anti-riot police have been reported to utilise tear gas as police forces and protesters clashed in Amman’s northeast. Protestors burned tires on a major highway between Amman and the Dead Sea, causing traffic disruptions, while highways connecting Amman to cities of Irbid and Karak were also disrupted. On Friday, King Abdullah II declared that government will take all necessary steps to hold individuals who engage in violence accountable. The security forces detained 44 individuals for rioting during the protests, stating that they intensified their security deployment in the Kingdom's governorates to guarantee the implementation of the rule of law and the protection of civilians. Also on Friday, the government declared it was banning the video sharing platform TikTok, claiming the app failed to "deal with publications inciting violence and disorder," according to the Associated Press. The government has not stated how long the "temporary ban" on TikTok will endure. According to the AP, internet access was also disrupted in cities Maan and Karak, both of which have been hit by protests and strikes.
In the background of this picture is an economic catastrophe, the likes of which Jordan has never seen. While some analysts fear that the events may destabilise a pivotal country in the region, others believe that economic and political reform has become crucial.
How and why did fuel prices increase?
Jordan is experiencing challenging economic conditions, aggravated by more than $50 billion of debt. The Kingdom, which lacks natural resources, has traditionally relied on foreign aid for economic support. According to the World Bank, governmental debt reached 113.8 percent of the GDP by the end of 2021. The war in Ukraine and the surge in oil prices have exacerbated the situation. Local market pricing for oil derivatives is determined by considering global prices as well as other costs, such as shipping and taxation. According to official figures reported by Jordan's national news agency Petra, Jordan's oil cost surged by almost 78% in the first six months of 2022, as compared to the same period in 2021. Between January and June 2022, Jordan paid 1.77 billion Jordanian dinars for oil, up from 994 million dinars over the same time in 2021. Meanwhile, fuel prices in Jordan have roughly doubled in 2022, especially diesel and kerosene, the former used by lorries and buses and the latter for household services, particularly heating. According to official reports, the government has spent more than 500 million Jordanian dinars (equivalent to US $700 million) to restrict fuel price increase this year and cannot spend much more as it aims to avoid violating an International Monetary Fund agreement. The government thus decided to increase the prices of several fuel derivatives.
The Dilemma of Reforms
Jordan depends on loans and foreign support to meet its fiscal demands. The Kingdom imports 98 percent of its energy needs, requiring 134,000 barrels of oil per day, the majority of which comes from neighbouring Saudi Arabia. The government intends to decrease the country's dependency on imported oil fuels for power generation. More than 20% of the Kingdom's electrical grid is generated by solar or wind energy, with an aim of 31% by 2030.
With a huge public debt and unemployment rate of over 20%, the government is attempting to reform its economy and reduce governmental subsidies. However, according to Andre Bank, a German political researcher, the Jordanian government is having a tough time resolving the economic crisis. Bank explains that the government “has always resorted to short-term remedies, so to speak, with no long-term answers in mind.” He also believes that a modest portion of government assistance would be restored, causing fuel prices to decrease briefly. In the short term, poor families in this region may be provided with cash assistance, but "this will not solve the structural problem of the economy, especially in rural areas, so the country must witness a process of radical transformation not only at the economic level, but also at the political level." This is exactly what occurred, as in its efforts to temper mounting rage, the government agreed last week to distribute a lump sum of relief to the impoverished, which, according to the authorities, will benefit around 219,000 families. The government has also stated that it is willing to look into protesters' demands to overturn its decisions, but they have also indicated that their choices are constrained by the commitment to conform to the terms of an IMF structural reform program. However, according to Bank, the elites in Jordan “will have to give up a significant portion of their power. But they are obviously not prepared to do so since it would need reforms that the ruling class and, probably, many other countries do not desire’’. Indeed, how the government and the protesters react if the current conditions persist remains an unknown but important issue.