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French Version

Jordan trade with Iraq undermined by Israeli business dealings

ECONOMIC RELATIONS between Jordan and Iraq have never been firmer both on the historical, geographical and even economic level.

ECONOMIC RELATIONS between Jordan and Iraq have never been firmer both on the historical, geographical and even economic level. However this strong relation has been under considerable stress recently. The strain started in the last decade but has been increasing in the past few years. Observers believe Prime Minister Ali Abul Ragheb’s appeal last week for Iraq to increase its trade with Jordan came in response to the sluggish business between the two countries. Statistics show only 40 percent of the $450 million trade protocol signed between the two countries for 2001 have been used.

The one-year protocol is part of Jordan’s strive to streamline its economic and trade ties with Iraq. With only four-and-a-half months to go, economists note the protocol provides real opportunities for Jordan’s private sector and business people. "Iraq is still considered Jordan’s preferred business partner," said Dr Munir Hamarneh, economist at the University of Jordan. He, however, said he resented the way Jordanian businessmen have been dealing with Iraq. The professor strongly believes any kind of trade needs better promotional and advertising campaigns both locally and abroad, something which Jordanian products are lacking. "There are many things that should be developed and done on Jordan’s part in the protocol to secure better results for the economy and joint trade with Iraq," he told The Star. "Chambers of Commerce and Industry in Jordan must launch joint campaigns to promote Jordanian products in Iraq and achieve business deals with their Iraqi counterparts," Hamarneh explained. "Jordanian businessmen must live up to already signed agreements with Iraq to the fullest." Although Iraqi officials are most welcome to boost their ties with Jordan, this is not the reality on the ground. For the last five years, Iraq’s trade relations with its neighbors have increased gradually and trade ways have been opened through Syria and Turkey. But this is not the real problem for Dr Mohammed Saqer, professor of economics, also at Jordan University. "Iraq’s reluctance to deal with Jordan lies in the fact that a good few of the Kingdom’s businessmen have business dealings with their Israeli counterparts," Saqer told The Star. He said Iraq previously warned Jordan about this but nothing had been done.

Saqer makes clear this issue hurts the government’s plans to upgrade its economic sectors and develop foreign trade relations not only with Iraq but with the rest of the world markets. Local industries, including pharmaceuticals, minerals and food products, are all put at risk because of the wrong policies pursued by some local companies. "Iraqi officials no longer trust Jordanian companies. The Iraqis supplied us with oil for free and we stabbed them in the back," added the professor. Saqer’s justification for Iraq highlights the political aspect of the issue. Iraq often tries to oppose the US plans to tighten the sanctions and undermine its economic and political stamina.

And the opposition to deal with suspected Jordanian companies stems from the objective to close the door in front of American attempts to force Iraq to deal with Israel through Jordanian companies, he said. However, Hamarneh disagrees. Despite the fact he is all in favor of lifting the UN sanctions, he rejects the view that Iraq is refusing to deal with Jordanian companies because of political differences. "I highly appraise Jordan’s stance against the US-proposed plan to tighten the embargo on Iraq through "smart sanctions", this shows Abul Ragheb’s government knows that Jordan still has political and economic interests with Iraq," Hamarneh said. He added every economic sector in Jordan is suffering from recession, and the development of economic relations with Iraq will enliven local industry and helps the government’s plan to improve standards of living in the Kingdom. But both Saqer and Hamarneh think the recent government statements about relations with Iraq are part of a "political propaganda", which does not reflect the state of things as they are.

Eversince, he formed his cabinet last year, Prime Minister Abul Ragheb has been calling on the government in Iraq and its businessmen to make the Aqaba seaport as their principal choice to import shipments. This is something that has always been the case, especially in the 1980s and even in the 1990s. However, since the UN sanctions were imposed on Iraq in August 1990, Iraq’s shipments through Aqaba failed drastically to reach up to the 1.2 billion tons a year that previously existed. On the other hand, observers believe the "mellowing" of the 11-year-old sanctions and the existence of the four-year-old UN Oil-for-Food program is helping the Iraqi government to re-structure its trade relations with most countries, which were cut during the 1991 Gulf War and afterwards.

Many observers see in Iraq’s trade relations with most of its neighbors, including Syria, Turkey and some of the Arab Gulf states, as cornerstone for wider trade dealings with Europe and the Far East. This is not to forget that Egypt has made $2 billion in trade with Iraq through the Oil-for-Food program.

"Jordan is not as powerful as Egypt," stressed Hamarneh. "Egyptian industries are bigger than Jordan_s and Egypt_s GDP is higher than that of Jordan. But we can still reap much benefit with Iraq only if we understand the rules of the game well..."


Amman,11August2001
Ghassan Joha
The Star


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