Iraq oil cut fuels Jordan political unrest

Jan. 16, 2013 at 3:22 PM
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AMMAN, Jordan, Jan. 16 (UPI) -- Political unrest in Jordan, a key U.S. ally and Israeli peace partner, has been heightened by Iraq's closure of its border with the Hashemite Kingdom.

That threatens resource-poor Jordan's energy supplies, undermining the embattled monarchy ahead of crucial parliamentary elections Jan. 23 being held as the bloodbath in neighboring Syria threatens to spill over into the desert kingdom.

The Jan. 9 closure by the Baghdad government, citing "security concerns" amid wide scale protests against the increasingly dictatorial rule by Prime Minister Nouri al-Maliki, cut off Jordan's imports of an estimated 10,000 barrels of oil a day from Iraq.

Maliki supports the besieged Syrian regime of President Bashar Assad. Jordan's monarchy has long feuded with the Damascus regime and would shed no tears to see it disappear.

Iraqi oil accounts for around 10 percent of the overall fuel consumption by Jordan, which for decades has relied on discounted supplies from energy-rich Iraq, Saudi Arabia and the other monarchies of the Persian Gulf.

On Monday, Jordan's minister of energy and mineral resources, Alaa al-Batayneh, appealed to Baghdad to exempt 300 tanker trucks carrying Iraqi crude to the kingdom. Nothing happened.

Jordan has grappled with economic problems for decades, more or less since the kingdom was established by Britain after World War I.

These have been exacerbated by hefty subsidies on fuel that have become a barometer of political unrest.

"These energy challenges and their subsequent social consequences have exacerbated an already unstable domestic situation in Jordan," the U.S. global security consultancy Stratfor observed.

The widening unrest has been heightened by sharp differences between the Bedouin tribes who are the monarchy's traditional supporters, and account for 40 percent of the population, and the largely dispossessed Palestinians who comprise around 60 percent.

The Islamic Action Front, the political arm of the Muslim Brotherhood in Jordan, has declared it will boycott the elections, which are thus likely to produce an overwhelmingly pro-monarchy parliament that's certain to inflame the political unrest.

But King Abdullah II has other troubles too. Apart from fears of a jihadist spillover from the Syrian bloodletting, Israel's parliamentary elections Jan. 22 are expected to produce a hard-line right wing coalition opposed to relinquishing the occupied West Bank to become a Palestinian state.

That will undoubtedly dash whatever hopes there may still be of a negotiated peace settlement between the Palestinians and Israel, with the threat of renewed violence there that will inevitably spill over into Jordan.

Abdullah, who succeed his late father, King Hussein, in 1999, has striven to wean his 6 million subjects off fuel subsidies, but to no avail.

In September 2012 he ordered his government to impose a 10 percent increase in gasoline prices -- the third such hike in a year -- in a desperate effort to reduce a chronic budget deficit, a long-running problem.

That sparked large-scale street protests, fanning the unrest that had intensified after the surge of pro-democracy revolutions began sweeping the Arab world in early 2011.

Two days later, after parliament issued a strongly worded resolution demanding the price increase be revoked, Abdullah had to back down.

He has tried repeatedly to slash other subsidies on electricity, water and food because the kingdom can no longer afford them.

But he's constantly constrained by surge in political protests that have gathered momentum over the last two years amid the fall of four Arab rulers in the poorly named Arab Spring, a warning he ignores at his peril.

Because Jordan has to import nearly all of its oil, gas and other sources of energy, commodity prices have been climbing steadily.

The shutdown of a pipeline carrying natural gas from Egypt after the downfall of President Hosni Mubarak Feb. 11, 2011, has caused immense economic strain in Jordan.

In August 2012, Abdullah had little alternative but to accept a $2 billion loan facility from the International Monetary Fund in exchange for a pledge to rein in public spending and raise the cost of electricity.

All this discontent has intensified widespread demands for democratic reforms by a monarchy that has tightly controlled political life since the kingdom was established.

The most menacing aspect as far as Abdullah's concerned is that for the first time, the monarchy is being called into question by protesters.

He has repeatedly promised reforms, but they've never materialized, Now the king is fast running out of wiggle room.

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