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Volume 25, Number 3May/June 1974

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Written by Frederick King Poole
Photographed by Khalil Abou El Nasr

The worst thing that could happen to us would be to discover oil." The remark was slipped in casually by Sharif Zeid Hussein, first cousin of H.M. King Hussein of Jordan, in the course of a tour of the new laboratories, conference rooms and libraries of the Royal Scientific Society (RSS), the country's computerized nerve center for development planning. Sharif Zeid, an executive official of the RSS, was smiling as he spoke, but he was making a serious point.

The Hashemite Kingdom of Jordan is currently in the process of attempting to transform a land that is four-fifths barren desert and poor in discovered natural resources into a fully viable modern entity. To do so, a coordinated attempt is being made to utilize every human, as well as natural, resource that can be found. Sudden wealth from a single source does not enter the thinking of the planners. In a national effort that is rare in either the developed or the underdeveloped world, the emphasis in today's Jordan is on self-discipline, sacrifice, and, most of all, methodically careful, as well as imaginative, planning.

A scientific, rather than political or ideological, approach to development is behind current Jordanian thinking. The country is in the course of its 1973-1975 Three Year Development Plan. Industry as yet accounts for only a small part of Jordan's gross domestic product, although it did rise from 8 percent of a GDP of $600 million in 1972 to an estimated 11 percent in 1973. The country's some 40,000 industrial workers constituted only about 10 percent of its work force in 1972, and manufactured goods account for probably about the same percentage of the country's exports. The new plan calls for a total investment of $500 million, the creation of 70,000 new jobs in all sectors and an annual growth rate of 8 percent in gross domestic product.

Meanwhile Jordan's communications, transportation and power infrastructures are being revolutionized. All the new industrial projects involve private enterprise, but most also involve government participation, and often outside economic and technological assistance is being utilized. In all, the government owns shares in some 27 industrial or service companies with an average government participation in each of less than 30 percent. As King Hussein put it at the Jordan Development Conference, held in late 1972 to launch the Three Year Plan, "We have no pet ideas about economic doctrine."

That Jordan should be forging ahead has confounded many outside observers. Until 1967 the country was well on its way to becoming an economically viable entity. But in the Six-Day War Jordan lost the "West Bank," its territory west of the Bible's Jordan River which comprises just slightly more than 2,000 square miles of the country's 38,000 square miles of national territory, but contains perhaps half of the country's economic resources, including much of its best farm land, and all of its once thriving Holy Land tourist industry.

Fortunately, as far as industry is concerned, most of Jordan's industrial establishments were on the East Bank. And Amman, on the East Bank, was and is the country's communications center, linked directly by rail to Syria and Lebanon in the north and by the modern, well maintained Desert Highway running south to the country's only port, located on the Gulf of Aqaba, an inlet of the Red Sea which opens into the Indian Ocean.

It was on the East Bank for example, as early as the 1950's, that the Ministry of National Economy was set up, that the Jordan Petroleum Refinery was built at Zarqa, about 17 miles northeast of Amman; that the Jordan Electric Power Co. built the country's first modern power plant; that the Jordan Phosphate Mine Co., the country's biggest foreign exchange earner, was reorganized and recapitalized, and that a modern cement plant northeast of Amman went into operation.

Today Jordan has two phosphate mines, at Ruseifa in the north and Hasa in the south with a work force of 1,200. They produced 1.2 million tons in 1973 and are shooting for a target of 3 million in 1976. The refinery has a capacity of 600,000 tons a year and 1,000 workers; the cement factory 500,000 tons and 700 workers.

All of the country's larger existing manufacturing industries are located on the highway between Amman and Zarqa. When the Ottoman Empire came to an end in World War I, Amman, which became the capital of Transjordan—a semi-autonomous state operating under British mandate—counted only 6,000 people. At the end of World War II, Transjordan became merely the East Bank of the whole Kingdom of Jordan, and the capital's population has now increased to 600,000. Zarqa, which was a small village, now has 250,000 inhabitants.

The range of industry in this area has become fairly wide, taking in leather, paper, foodstuffs, matches, pharmaceuticals, plastics and a pilot half-million dollar steel pipe factory. About 90 percent of Jordan's "industrial" production units are incredibly tiny, but some are impressive.

The Jordan Tobacco & Cigarette Co., for example, is probably the country's largest industrial undertaking after the phosphate mines, oil refinery and cement plant. Production in the past decade for the domestic market has increased from 715 million cigarettes a year to more than a billion, and for export to much of the Middle East, from 25 million to more than 218 million, making it the largest cigarette plant in the Middle East outside Egypt, and topping Egypt in exports. With $635,000 worth of modern machinery, the company is currently producing $13.4 million worth of cigarettes a year, $7.6 million of which is tax money that goes straight to the government.

Next in size after the cigarette company is the Industrial Commercial & Agricultural Co. (ICA), the complex that is also known as Hussein Industrial City. ICA was set up in 1961 with a paid-up capital of more than $1.3 million, since re-evaluated at about $2.5 million, of which the government owns $70,000 worth of shares. Starting with less than 60 employees, ICA now has 300, a third of whom are women, at work in the 14 buildings within its 270,000-square-foot compound. Most of the firm's products are manufactured under license.

Its first venture, launched in 1962, was a detergent plant under license from the Dutch-British Unilever Export Company. The next year ICA began producing biscuits, entirely on its own. In 1964 it opened a paint factory in cooperation with two British firms, and also a tin can factory for packaging its products. By 1965 ICA was producing soap under the Lux, Lifebuoy and Vinolia brand names. That same year it started an ice cream plant with the British Mica Ice Cream firm, and a plant turning out Sunsilk shampoo, Pear's baby powder, Erasmic shaving cream and Pepsodent and Signal toothpaste. In its first decade of operations ICA's turnover increased five times to $3.2 million a year.

In addition to all its other ventures, ICA owns 51 percent of the Confectionery & Chocolates Co. near Amman's international airport, a firm capitalized at $500,000, of which $135,000 is in government-owned shares. Back at Hussein Industrial City in Ruseifa work has begun on new plants to produce cardboard boxes and oriental carpets.

Another major firm is United Industries, which makes wet batteries used in vehicles and army radios. Beginning operations in 1960, its founders soon discovered how difficult it was to maintain a competitive position while relying on imports. Today its battery containers are made primarily from old, worn-out tires, which are processed on the premises. The lead that goes into the batteries themselves is now made locally from scrap.

With a capital of $750,000, United Industries employs 308 workers and produces about 400 batteries a day. The firm's manager, Fakhri Hijazi, says that even now his plant is meeting domestic needs, and about two-thirds of its business is in exports to other Arab countries, either of containers or entire batteries. But Jordan's more immediate, and surely more exciting, projects involve the use of its limited natural resources.

This is the business of the National Planning Council, formed in 1973 and assigned as its primary mission the implementation of the Three Year Plan. Headed by Dr. Khalil Salem, former governor of the Central Bank, the NPC plans specific projects, carries out feasibility studies, often with foreign assistance, and searches for financing. Rajih Amin, a young chemical engineer who serves as director of the Industrial Sector for the NPC, spoke recently of the three top priority industrial enterprises being carried out under the plan—the fertilizer, ceramics and glass projects, all of which make use of resources found within the country.

The fertilizer project seems to be on everyone's mind in Jordan, possibly because for so long phosphates have been the country's only exploited mineral resource—apart from sand and lime for concrete—and have been mined exclusively for export. Now Jordan has signed an agreement with the French firm Rhon Progil and Anglo-American International Systems and Controls to build a $40-million chemical fertilizers plant with an initial capacity of 400,000 tons per year. Press reports say it should be finished within about two years, with 90 percent of production being exported. It should provide about 400 new jobs.

The Jordan Ceramics Co., already formed as a private firm capitalized at $1.9 million, of which the government's share is $60,000, will probably be constructed near the cement plant, where there is a good supply of clay that a new mining company will exploit, Mr. Amin says. He predicts that before the Three Year Plan has run its course, the plant will be completed, at a cost of $5.8 million, operating with a work force of 200, producing 6,000 tons annually of wall tiles and sanitary fixtures.

The sheet glass plant will be located south of Ma'an, a desert station on the north-south railway line in an area where new underground water supplies are being exploited and, equally important, an area where there are huge quantities of the sort of sand suited to glass making. Except for a few small workshop operations, glass making is another entirely new industry for Jordan. The plant, Mr. Amin says, will cost $2.5 million, will employ 100 workers, and will be designed for a capacity of 10,000 tons of high quality sheet glass a year.

In order to supply the raw materials for the ceramics and glass projects, a new mining company, whose name has not yet been chosen, is being set up. It is to be owned 51 percent by the government, the rest of the shares being available to the private sector. The new company will be responsible for exploiting the country's clay, sand and lime, which will be sold to manufacturers in different qualities according to specification for use in ceramics, glass and building materials. As for other natural resources—shale oil and copper—studies have not been encouraging. Only potash, extracted from the Dead Sea, promises profits but since 1967, when Israel occupied half of the Dead Sea shoreline, the Arab Potash Co., a potentially large earner of foreign exchange, has not been operating.

Still, using Jordan's own resources to further its industrialization is but one facet of the economy. And under the Three Year Plan all aspects are being considered, as King Hussein made clear in his speech opening the conference that inaugurated the plan.

"We do not think that any abstract model of an economic system, whether it is capitalism or socialism or communism or otherwise, could solve all our problems. Hence, we intend to be selective rather than move in a groove. We will be free to choose the most effective principle or practice which would apply to the Jordanian scene."

The King's young brother and heir, H.R.H. Crown Prince Hassan, to whom the Royal Scientific Society is directly responsible and to whom credit for the Three Year Plan was given, spoke of it as "a turning point along the path of development and progress."

"It aims," he told the representatives of 26 governments and 18 international organizations, plus numerous foreign private investors who attended the conference, "at reactivating economic conditions and resuming the developmental momentum Jordan experienced prior to the events of June 1967."

The RSS, which formulated the plan, was set up in the spring of 1969 by the King, who brought together a handful of economists and people prominent in politics in a small office in downtown Amman. Six months later he turned its direction over to Prince Hassan who, as Sharif Zeid tells it, "was fed up with Arabs depending on fate rather than action." The RSS, which now has a full-time staff of 220 persons, 80 percent of whom are highly qualified academic and technical experts, occupies a complex of modern buildings, some still under construction, on a hill in Amman's Jubeila suburb. Not only does it set the nation's goals, it keeps track of all significant development projects in the country, making use of its three computers—an IBM 11-30, an IBM 360-20 and an IBM 370-145—one of the most sophisticated computer centers in the Arab world.

The RSS works on specific projects as well as long-range, grandiose plans. As an example, Sharif Zeid points to a recent study made on the feasibility of producing walkie-talkie radio sets in Jordan. The RSS, he says, has found a way to produce a set, which costs $1,500 when imported, for only $700, and he predicts it will be in production soon.

"We don't have the money you find in some Arab countries," the Sharif says. "If we want something we cannot turn to oil to get the financing. We must work harder."

The RSS makes certain that Prince Hassan and the King know exactly how much work is being done. One of its major current programs is the computerizing of its POSIC (Project Operation Status Information Center) data bank which already keeps track of some 400 projects, ranging from highway improvement to the construction of schools and clinics to new manufacturing plants. Daily reports are fed into POSIC, and it is possible to see at a glance whether any given project is on time, how much money has been spent, how many workers are on the job and how many are sick, where and how each engineer is spending that particular day, where each piece of equipment, such as a tractor, is located and how it is functioning.

Other current RSS programs include the establishment of testing laboratories, the formulation of quality controls, the development of tax systems and research on solar energy devices.

Another key to the plan is Jordan's Industrial Development Bank, established in 1965 with a capital of $7.6 million to provide medium and long-term financing to industrial and touristic enterprises. In 1972 Jordan had nine banking houses with 64 offices and branches but, as in much of the Arab world, most suffer from an excess of liquidity because of a lack of guarantees for medium and long-term investment. The Industrial Development Bank, with the backing of the Central Bank, can make such guarantees. It provides a channel for private funds. Six of the nine members of its board of directors are from the private sector, including commercial banks.

The Development Bank's general manager, Ziyad Annab, says that before the loss of the West Bank Holy Land sites to Israeli occupation in 1967, close to half of its financing was for touristic enterprises; recently it has concentrated almost exclusively on industrial undertakings. It frequently works in conjunction with the World Bank and the Kuwait Fund.

Among industries which have received loans from the Development Bank recently, Mr. Annab says, are those making nails, pins and clips, cement products, dry batteries, aluminum kitchen utensils and textiles. All are relatively small in scale, but might not be able to exist without the bank.

Of equal concern now to Mr. Annab is that tourism is once more on the move in Jordan, up 17 percent in 1973. Ali Ghandour, chairman of the Royal Jordanian Airline, Alia, has announced a drive to entice Holy Land tourists to fly first to Amman and then drive to Jerusalem, Bethlehem and other sites. Meanwhile, for the first time since 1967, the Development Bank is as heavily involved with touristic projects as with industrial ones. Ground has been broken for two American-franchised Holiday Inns, one in Amman, with 200 rooms, and another on the beach at Aqaba, with 110 rooms. (Aramco World, Nov.-Dec, 1973). Amman's Hotel Jordan Inter-Continental, which is also Jordanian owned and opened in 1964, is completing a 100-room addition to its 130-room main section. The Development Bank was involved in financing all three of these American-style hotels.

Another part of the plan calls for the creation of a hotel school, probably in Aqaba, and new training facilities for workers in various skilled and semi-skilled industrial positions. The Chamber of Industry's Ali Dajani, who was at one time assistant commissioner of commerce and industry in Palestine, and later minister of transport in Jordan, talks of these schools as part of a new infrastructure creating a favorable climate for new industry.

According to Mr. Dajani, it is definite that at some point in 1975 the entire country will be linked by a national electricity grid. To Mr. Dajani, this means increasing industrial development, both small-scale and large-scale, outside the Amman-Zarqa area. A major facility for harnessing power, as well as providing water to irrigate some 12,000 acres in the Jordan Valley, will be the King Talal Dam on the blue-gray Zarqa River, currently under construction with Yugoslav engineers assisting at the scene. The Kuwait Fund has put $15 million into the dam and the Abu Dhabi Fund, $5 million. When completed this year the reservoir will store some 1.8 billion cubic feet of water which previously flowed unused into the Dead Sea.

Among other major projects are the $42 million, 72-mile railway spur in the south which is being built under the supervision of West German engineers to connect the Hijaz Railway, built at the turn of the century to take Muslim pilgrims from Damascus to the holy city of Medina in what is now Saudi Arabia, with the port at Aqaba. The volume of trade passing through Aqaba rose by 83 percent in 1972 and the new rail link should not only facilitate the export of phosphates to Asia and Africa (about 700,000 tons in 1972) but also, according to Mohammad Raja Qaseini, deputy director of the railroad, make possible air-conditioned tourist trains from Amman or even Damascus. Aqaba has had a modern international airport since 1972.

Another infrastructure project is the $6-million U.S.-assisted internal telephone improvement scheme. Already, Jordan has superior international telephone service: calls from the capital are relayed to Europe and America via a Japanese-built satellite tracking station north of Amman. Back in 1969, Jordanian television viewers enjoyed live coverage of the first manned moon landing.

The World Bank recently increased its project loans to $30 million, including formal agreements for an $8.7-million water and sewage system for Amman, and a steam-electric power plant at Zarqa, to which the World Bank and the Kuwait Fund are each lending more than $10 million. West Germany is financing design work for a planned new international airport for Amman.

For fiscal 1974, U.S. AID includes $65 million as direct support to the government's budget, plus another $10 million in development loans, including the improvement of highways, and another $1.1 million for technical assistance, including a number of feasibility studies. England is contributing about $25 million to the Three Year Plan, and the United Nations Development Program (UNDP) about $15 million.

Since the 1972 conference that presented the Three Year Plan to the world almost all of Jordan's foreign aid donors have increased their grants and loans. In its recent commercial reports on Jordan, the U.S. Embassy has been speaking of the ever more favorable climate for foreign investment in the kingdom. Numerous incentives and guarantees are given to foreigners, and also to expatriate Jordanians, under the recently amended 1971 Encouragement of Investment Law. A number of American firms, including the Singer Sewing Machine Co. and the National Cash Register Co., maintain offices in Amman. Probably more significant is the fact that permanent offices have been set up by American consulting engineers such as Miller-Warden Western Inc. of Cambridge, Mass., which is studying the improvement of the road from Zarqa to Jerusalem, and the De Leuw Cather Corp. of Chicago which is supervising construction of a road from Zarqa to Amman now 70 percent finished. The Federal Electricity Corp., a subsidiary of the multi-national ITT, is at work on the telephone system, setting up direct dialing between Amman, Zarqa and Irbid at the country's northern tip, and a new radio link with Aqaba in the extreme south.

Ismail Dajani, economic and commercial adviser at the U.S. Embassy, sees Amman as a natural industrial and commercial center, and says he is certain "the maximum of the Three Year Plan will go through, and if there is a peace settlement in the region Jordan is a country that will boom." Mr. Dajani, a man who obviously enjoys turning a phrase, points to the sudden influx of money from abroad and says "if peace comes, the world will see Jordanians as the people who turn sand into flowers."

Frederick King Poole , an ex-UPI correspondent turned novelist, free-lances from Beirut and struggles to finish his second novel.

This article appeared on pages 44-48 of the May/June 1974 print edition of Saudi Aramco World.


Check the Public Affairs Digital Image Archive for May/June 1974 images.