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JLT warns investors over Jordan/Syria axis

King Abdullah of Jordan is entering a critical period for his regime, claims Elizabeth Stephens, Head of Credit and Political Risk Analysis for global insurance broker JLT.

Broker JLT says Jordan’s King Abdullah must avert full scale protest if the country’s income from foreign aid and tourism is to be protected

The conflict between government forces and the Free Syrian Army has spilled over into the strategically vital industrial and financial centre of Aleppo. Helicopter gunships have joined heavy artillery, spurring the US and Turkey to increase pressure on Syria to effect ‘political transition’.

To the south, a key ally of the US looks on with special interest in the fate of President Bashar Al-Assad.

“The King has been a staunch supporter of political transition – since the Arab Spring erupted in March 2011, he has overseen the departure of three prime ministers in an attempt to deflect growing public discontent towards his regime,” explained Ms Stephens in a statement today.

“Should Syrian President Assad fall, it is highly likely he will be replaced by figures ideologically connected to the Muslim Brotherhood. The ascendancy of the Brotherhood in Syria, together with its power in Egypt, will exert tremendous pressure on Jordan’s monarchy and could prove the tipping point for Abdullah’s regime, already under fire at home.

“In July, the Muslim Brotherhood’s political party in Jordan, The Islamic Action Front (IAF), announced its intention to boycott parliamentary elections following unsatisfactory changes to election law; which it claims is unrepresentative and favours tribal parties supportive of the King.

“This is likely to exacerbate public discontent towards the King, who has failed to placate his subjects’ desires for political and economic reform or deliver a decisive plan to tackle corruption and unemployment – which unofficial figures put at 22%.

“There is limited time for concessions. Although Jordan has remained relatively calm during the upheavals in Arab states, in some regions the calls for reform have already become demands for regime change. The King finds himself in a precarious situation.

“Jordan has no oil and few natural resources. The country’s economy is dependent on foreign aid and tourism – should the King fail to avert full scale protest, then the latter will dry up quickly. How the state responds will decide whether or not foreign aid does too. Investors would be advised to watch Syria as keenly as King Abdullah.”

About Ralph Savage (137 Articles)
Insurance and legal journalist Ralph Savage has written extensively for the financial and professional services sectors, most notably as News Editor of Post Magazine. He ghost writes regularly on behalf of FTSE 250 CEOs, leading counsel and senior professionals including solicitors, insurers, accountants and brokers.

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