Role of Aid Grows In Mideast Talks

Jordan seeks economic help as a price of conciliation

ECONOMIC security is forming an important backdrop to the Middle East peace talks, which resume in Washington early next month. Short-term financial help is needed to keep the bargainers at the table and the talks on track; long-term economic development and cooperation across borders could help stabilize the region by creating the practical side of "sustainable peace," say several Arab analysts. The Jordanian, Lebanese, Palestinian and Syrian negotiators represent Arab "have-nots a term made familiar when the recent Gulf war heightened differences between Arab rich and poor. They are seeking immediate aid and future loans and investments. They warn that politically it is too costly at home to make compromises with Israel if their economies are left to languish. No Arab state illustrates this more clearly than Jordan, a country vital to the negotiations yet perilously close to economic collapse. Like other Arab countries bordering Israel, Jordan was once paid by rich Arab Gulf countries as a "confrontation state." Today, the Hashemite Kingdom is struggling to make ends meet and is seeking money to bolster domestic support for its now-conciliatory role in the peace process. Aside from Iraq, Jordan's economy has been hardest hit by the Gulf crisis. Gulf countries rebuffed the Jordanians - severing aid and closing markets to Jordanian goods and labor - when Amman refused to support the coalition against Iraq. Despite reported smuggling across its Iraqi border, Jordan suffers huge trade losses because of the on-going embargo against Iraq. "Now we're asked to provide an umbrella for the Palestinians, smooth the peace process, and build the road toward autonomy," says Fayez Tarawneh, a senior Jordanian delegate who is also his country's representative in the Palestinian delegation. "Under the peace plan, the West Bank will be associated with Jordan, and we will have to face its economic problems." To ensure Jordan's engagement, he says bluntly, well-heeled Arab and Western countries must help Jordan's ailing economy and fragile democracy with open markets, aid, and investments. Widely viewed as the most moderate and willing Arab peace partner, Jordan is the country to focus on when considering economic development as a regional stabilizer, says Robert Satloff, deputy director of the Washington Institute for Near East Policy. Few take Jordan's moderation for granted. Social unrest continues in the densely Palestinian-populated country where unemployment, exacerbated by 300,000 returning Palestinians expelled from the Gulf, approaches 35 percent. "We cannot achieve peace without letting people know their prospects are better," Mr. Tarawneh warns. "We should have something to show for Jordan's efforts at the table." Western donors want to build such confidence in peace over the long term. The United States and the European Community (EC) are working behind the scenes to promote cross-border investments and stability in an area riddled with conflict for 43 years. "It's the most logical approach," says James Elles, spokesman for the European Parliament's budget committee. "We've done this with Northern and Southern Ireland, investing in cross-border projects that require two sides to cooperate and break down some of their misunderstandings. "We'd like to create an EC in the Middle East, rid the area of much of the enmity and distrust, and manage an economic framework of understanding and cooperation that becomes a political one. Mind you, this doesn't happen fast, nor does it totally remove distrust - but it's likely to create the most stability." International aid "will sustain peace," says Tarawneh, a former economic adviser to Jordan's prime minister. The Bush administration clearly wants to reward Jordan with renewed aid, cut this year due to US displeasure over Jordan's pro-Iraqi stance. But the White House faces congressional opposition given Jordan's violation of the UN embargo of Iraq. Jordanian delegate Jawad Anani, a prominent businessman, doubts that economic cooperation, as envisioned by the US and EC, will lead to regional stability. He says coordination between Jordan and Israel, for example, in mining Dead Sea minerals or in agricultural production, will be a product of, not a precursor to, Middle East peace. "The very same problems we fear on the economic front [a politically explosive rise of Islamic and Palestinian radicals], we also fear if we fail to press for Palestinian autonomy before economic engagement with Israel," Mr. Anani says. Jordan has said it will re-embark on strict economic reforms in 1992 to qualify for continued International Monetary Fund assistance. Tarawneh was minister of supplies in April 1989, when riots erupted over increases in petrol prices and other consumer goods and Islamic groups later capitalized on the unrest. He invokes the prospect of renewed discontent: "It will be harder now to increase prices and lift subsidies. People will ask, 'What are you doing with peace talks?' Money will let Jordanians know just how essential their role is." Without funds from fellow Arabs and the West, Jordan will be crushed under the weight of its $8.5 billion foreign debt and its democracy endangered by a population exasperated by no tangible rewards for compromise. Then, Tarawneh says, long-term regional economic cooperation will be far more remote.

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