And maybe, as this Jerusalem Post article suggests, QIZ's are all the system can handle right now. With America's reputation at a nadir in the region (as Rabat painfully showed), our ability to influence the internal dynamics of Arab states is even more limited than in the past. But I hope people don't lose sight of the larger goal of fostering dialogue between Israeli and Arab publics, which is ultimately the way to build a lasting peace in the region. Consider this a qualified endorsement.
UPDATE: A dissenting view from inveterate Jordan-watcher Abu Aardvark! Good thing I qualified my endorsement, eh? He points to this piece in Middle East Report Online by Pete Moore, a political scientist at Miami who likes the word "schwerpunkt." The funny thing is that I had actually read the piece some time ago but forgotten about it. I obviously haven't spent a lot of time thinking about the Jordanian economy, but these guys have. And here's what they say:
So that sounds like mixed results to me, but it would be hard to blame the QIZ's for them. For instance, going back to the Moore article, what does "continued violence in the Occupied Territories" have to do with QIZ's? But Moore does point to some troubling issues, notably, the ability of foreign firms to swoop in and collect the benefits of the program and to "ensure an exclusive distribution of rewards." That seems to defeat the whole purpose, doesn't it? But it seems like some tweaks to the rules could fix that. Moore goes on to claim that "This newest, "free trade Jordan" has necessitated a steady reversal of the political liberalization welcomed by Jordanians in the late 1980s and early 1990s. I'm not sure I see the logic of that assertion, and Moore doesn't provide an explanation as to why there would necessarily be a link between the two. Indeed, Moore contradicts himself by the end when he says that "at a minimum, the hard work of securing a comprehensive peace, making the necessary political sacrifices and expanding meaningful political participation needs to be pursued as vigorously as freer trade." So it doesn't seem like the political repression was necessitated by the economic liberalization after all.
Jordan is a small, lower middle-income, country with per capita income of about $1,700, and a young population of about 5 million (population growing by about 2.8 percent per annum), seventy percent of whom are below the age of 30. The country has been subject to a large number of external shocks, especially in the 1990s with the first Gulf war and the return of migrant worker, the continuing difficult situation in the West Bank and Gaza, and the situation in Iraq which has been a traditionally important export market-quite apart from the negative impacts of regional conflict on tourism and foreign and domestic investment. Given the size and frequency of these shocks, Jordan has done well on reforms, accelerating them across a wide area, including macroeconomic stabilization, trade and private investment, privatization and sectoral reforms. As a result, recent growth has been relatively robust and the economy has grown more resilient to shocks. Structural reforms have also continued.
Jordan, a middle income country, without significant natural resources, relies primarily on its human capital for development. Over the past decade, Jordan has focused on human resource investment, structural reforms and fiscal discipline to enhance opportunities for growth and stability. Performance trends have been mixed over the decade, but over the past three years, despite adverse external factors, Jordan’s strategy has produced positive and promising results. [...]
Jordan’s chief development challenge is to address the poverty that has grown in the past decade. It is estimated that only 3 percent of the population was poor at the end of the 1980s, but by 1992 the proportion rose to 14.4 percent, and the number of poor increased more than six-fold. In the aftermath of the 1991 Gulf War, a combination of factors contributed to this sharp increase: the collapse of oil prices, the return of approximately 300,000 Jordanians from the Gulf countries, and the subsequent drop in worker remittances from neighboring oil-producing countries. In 2001, 11.2 percent of the population was below the poverty line.
So it's possible that QIZ's have been a net negative for Jordan, but Moore hasn't proved it. It's more likely that other factors are at work here, such as the fact that two of Jordan's big markets, the West Bank and Iraq have been either partially shut off or in turmoil for much of the last decade. As for the political repression, my guess is that it has more to do with King Abdullah's unwillingness to brook dissent on relations with Israel and the United States than it does with economic liberalization per se. Now, one could argue that the U.S. is being irrational here by insisting on political compliance in exchange for economic goodies, and that this is a foolhardy strategy for achieving peace with Israel, but that's not the same thing as saying that qualified industrial zones don't create jobs.
