Iraqi Immigrants in Jordan: Economic Benefit or Burden?

Following the outbreak of war in Iraq, the Jordanian economy slipped into an alarming yet brief recession as the steady export of goods into Iraq was impeded and the cheap flow of oil from Baghdad was cut off. Jordan managed to successfully maintain its stability with the virtually instant foreign aid it received from the United States as well as its Arab counterparts; but when a sizeable amount of Iraqi immigrants began flowing into Jordan to escape the turmoil of their country, some feared that the surplus of refugees and expatriates would place added stress on Jordan’s already fragile economy and essentially suffocate the country’s infrastructure. Predictions asserted that the excessive amount of Iraqis inundating Jordan’s capital Amman would flood the job market and consume millions of dollars worth of precious resources, specifically electricity and water, resulting in an eventual collapse of the economy. This is still a risk, but in the meantime, studies show that a variety of Jordan’s economic sectors are in fact experiencing one of the largest development and expansion periods in the country’s history.

This mass migration and evident economic boom has inspired optimism as well as doubt in the minds of economists as Iraqis progressively gain an even greater influence over the Jordanian economy. Official statistics, including an analysis performed by the office of the United Nations High Commissioner for Refugees (UNHCR), reflect that Iraqi nationals compose 300,000 – 400,000 of Jordan’s population, but since many Iraqis are unregistered refugees and illegal immigrants, that number is unofficially estimated to be closer to 1 million (with a total population of only 6 million, it is clear that this number is sizable)

In just three years, Iraqi immigration has positively influenced various economic sectors as a result of massive consumer spending and hearty investments in private businesses. Based on a study conducted by Royal Scientific Society researcher Abdul-Salam Naimat, Iraqi immigrants have brought with them in excess of $2 billion into Jordan since the fall of the former Iraqi regime, but "solid statistics showing the full effect of Iraqis are difficult to obtain because banks keep their information private and many Iraqis are depositing money and purchasing homes under Jordanian names," Naimat explains. Iraqi immigration is still primarily credited for the stimulation of Jordan’s gross domestic product (GDP) growth, which posted over 7% growth in 2005 and is expected to reach 5-6% by the end of 2006 as a result of heightened consumer spending. The influx of Iraqi immigrants has also had an effect on wage workers of both Jordanian decent as well as other nationalities, such as Egyptians, who are employed within Jordan. Iraqi refugees have substantially diminished the average wages for the unskilled workforce by performing the same job for considerably less than their counterparts. This issue combined with the ever escalating real estate prices and overall inflation of common goods has bread animosity amongst Jordanians and a level of resentment towards Iraqi immigrants has emerged. Naimat asserts Iraqis are being utilized as scapegoats for all significant dilemmas threatening the economy. "Oil prices and the country’s large debt are the dangers the economy faces, and Iraqis are not responsible for this; they can’t be blamed for these issues," says Naimat. The common Jordanian, however, feels otherwise. An Amman taxi driver captured the sentiments of many Jordanians concerning Iraqi immigrants with a simple statement, "They (Iraqis) sold their country and came here to buy ours."

Amman’s real estate market in particular has expanded exponentially over the past three years, but these developments have had both positive and negative effects on the economy. "Prices in many areas of the city have gone up 200 to 500 percent," says an employee at Abdoun Real Estate. Standard land prices used to range from $200,000 to $250,000 for 1000 square meters, now the cost is nearly $1 million. Iraqi investments in the real estate market grew by 44% during the first six months of the year, reaching around JD810 million as they bought a total of 3,260dunums, according to the Jordan News Agency Petra. This situation has allowed Jordan’s banking system to profit immensely from the real estate boom, reaching a growth peak of 18.3% in 2005 according to Jordinvest’s July 2006 sector report, due in part to a mass increase of loans imparted on the private sector. The average personal incomes of Jordan’s largest social class are simply unable to compete with such inflated prices and loan granting financial institutes are their only option. Most Jordanians are now being forced to assume mortgages in order to purchase real estate, while many Iraqis are strolling into real estate offices with briefcases or duffle bags stuffed with cash and purchasing properties outright, as some realtors claim. Although this situation is grating on the nerves of the common Jordanian, economists are not apprehensive of such a movement. There is a very simple economic concept that escapes most people in Jordan and that is the strolling Iraqi’s money is going into Jordanian hands and thus Jordanian Banks and thus into the Jordanian economy, assuming of course that banks aren’t in the business of keeping money in vaults but rather in reinvesting it, which should translate in an ultimate benefit to the largest social class in Jordan. Further it is a generally accepted principal of economics is that if you desire to have dynamic economic growth (relative to global growth rates) you have to utilize borrowing. Modern economies do not fear borrowing but rather believe that there is a very useful function for it so long as it is done with checks and balances. This belief is reflected in the success of banking institutions around the world. The key is to balance borrowing with savings (not on a 1:1 ration of course).


More rags than riches

However, not all Iraqis in Amman lead a luxurious life; a substantial number are living at or below the poverty level and everyday is a constant struggle. Iraqi street vendors have become a common sight throughout Amman; women and children can be seen peddling everything from toothbrushes to packages of kitchen sponges merely to feed their families and maintain their meager existence. To curtail expenses they live in communal apartments and send every spare Dinar back home to their families in Iraq. In Mecca Mall the majority of the housekeeping crew is composed of Iraqi émigrés, some with college degrees who traded comfortable careers in Iraq for a peaceful life in Jordan cleaning restrooms and pushing brooms through the mall’s crowded walkways. They work from 7am until the mall’s midnight closing for little more than $150 a month; a job which Jordanians are paid over $200 for the same work. Signs in various shop windows advertising "Jordanian workers wanted" are further symbols of the growing discrimination directed toward the Iraqi community. There are countless Iraqis unable to find work at all and most spend their time loitering in public areas around Amman. But even in their dismal circumstance, they are for the most part thankful simply to have escaped the violence of their past. "I’d rather be unemployed in Amman than dead in Iraq," says one young Iraqi man who frequents the community park.

Many Iraqis experiencing difficulties in finding employment in the saturated job market are either pursuing small business ventures as entrepreneurs, provided they have the monetary means to do so, or are benefiting from preferential treatment extended by Iraqi business owners to their fellow countrymen. A variety of Iraqi businesses have sprung up all across Amman, including replicas or branches of successful businesses in Iraq. The Al-Anbar restaurant in the Khalda district serves as a prime example; once a popular eatery in Fallujah, the owners elected to relocate when their restaurant was leveled in an American military attack. They opened a duplicate restaurant in Jordan and have found considerable success serving Iraqi style cuisine in Amman. Westend, a stylish bar near downtown is another product of Iraqi entrepreneurship that has seen considerable success. Considering calculations ascertained in early 2005, it is safely concluded that well over JD30 million was invested into private business last year.

Until recently, a mass majority of affluent Iraqi immigrants residing in Amman were merely utilizing the city as a base from which to remotely operate and control their businesses in Iraq via telephone, email and envoy. Most were simply waiting for the situation in Iraq to stabilize enough to allow for them to safely return with their families; but with security conditions only deteriorating and no end in sight to the turmoil, many have opted to dissolve or sell their companies and liquidate their personal assets in Iraq to remain in Jordan on a long term basis. A large number of Iraqis are using the profits and revenue resulting from these transactions by investing them in real estate and to establish corporations and private businesses within Jordan; consequentially enhancing the economy even further.

So far, the private entrepreneurship of Iraqi immigrants has beneficially contributed to the Jordanian economy; these contributions, however, have been ostensibly overlooked and are not accurately reflected in formal economic reports nor incorporated into many statistical surveys. This oversight has occurred because a mass amount of these Iraqi investors and entrepreneurs have been forced to seek out and join forces with Jordanian conglomerates in order to avoid the numerous government sanctioned restrictions and exorbitant business licensing fees imposed on Iraqi nationals. The Iraqis themselves remain unofficial "silent" partners but are often the chief financial beneficiaries throughout the dealings, while the Jordanian partners serve as the official registrants and recognized legal owners of the businesses. The government implemented these sanctions in an attempt to protect Jordanians by ensuring an advantage for them over foreign nationals, as well as a means to capitalize on the extensive Iraqi investment activity.

The Jordanian government has also instigated a scheme to further utilize and benefit from their wealthy Iraqi residents and those wishing to gain entrance into the country. A program launched within the last few years has enabled Iraqi immigrants to obtain legal permanent residency within Jordan simply by depositing a substantial amount of funds (typically in excess of $100,000) into Jordanian banking and financial institutes or by investing such amounts into already established business projects. Although a rather costly option for immigrants, it has proven to be quite profitable for Jordan as a substantial amount of affluent Iraqis become increasingly desperate to escape the mayhem of Iraq.

Last year’s triple hotel bombings in Amman, which followed closely on the heels of an August terrorist attack that targeted U.S. warships at the port of Aqaba, instigated an episode of apprehension toward the Iraqi community on the part of the Jordanian government and security forces. In an effort to augment national security, authorities imposed harsher restrictions upon Iraqis seeking to gain entrance into Jordan. Many Iraqis are being turned away at the borders with no explanation why; and almost all young single men, typically between the ages of 18 and 35, are being denied access into the country entirely. These strict regulations may ultimately have a negative impact on the economy as an escalating number of wealthy Iraqis and potential investors are opting to settle in neighboring Syria where immigration restrictions are less severe. They actually go there because it is less expensive. In essence, Jordan may very well be committing the proverbial act of biting the hand that feeds it by refusing entrance to such a mass of Iraqi immigrants.

The overall indecisiveness of Iraqi immigrants is the culprit that has economists fearing for the future. Although prepared to remain here for an extended period of time, the majority of Iraqis in Jordan express a strong desire to return to their home country as soon as the opportunity presents itself. It is speculated that if the chaos and violence in Iraq are considerably abated, a large number of Iraqis will abruptly transfer or sell their interests in the country preferring to return home to conduct business. This could potentially have a devastating effect on the country and even prompt a subsequent collapse of the economy.

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