Since 1952, the United States has extended over $1.7 billion in economic assistance to Jordan. Hundreds of joint projects have been undertaken to build Jordan's infrastructure, develop the industrial and agricultural sectors, expand the educational system, and improve governmental services. These projects, for the most part, have had an impressive record of success and helped Jordan achieve a high level of growth.
This study will explore four themes relating to USAID assistance to Jordan:
(1) Aid has been based primarily on political rather than economic considerations; (2) Jordan has been compelled by its endemic financial vulnerability to accept "tied aid," allowing the United States to dictate terms; (3) Because of Jordan's dire need for financial and technical assistance, its economic development policies have mirrored, more or less, USAID objectives; and (4) The USAID mission has been able, by the sheer political weight of its assistance, to dominate other foreign donors in coordinating and planning developmental strategies.
POLITICAL OVERTONES OF AID
For over four decades, American aid to Jordan has been used by the United States as an instrument of foreign policy, primarily designed to serve the political interests of the United States.1 Still, in extending aid for political purposes, economic development goals also were served, however inadvertently.
There have been two predominant political considerations for U.S. assistance. The first has been the need to maintain a stable and moderate Jordan. Jordan's stability is crucial to the United States because of its strategic position relative to the security of Israel and Saudi Arabia, both important allies of the United States.2 Jordan's significance in facilitating this security was demonstrated in several regional disturbances in the 1980s, such as the takeover of the Grand Mosque in Mecca and the Iran-Iraq War:
In this period of turbulence in the Near East (Iran, Yemen, Afghanistan), the United States shares a close identity of interests with Jordan, and it is highly desirable that we should continue to make an important contribution to Jordan's determined efforts to meet the needs of its partly indigenous, partly transplanted population and maintain independence of action.3
The second consideration for extending U.S. aid to Jordan is its crucial role in the U.S.-sponsored Middle East peace process4 and its future relationship with the West Bank and Gaza in economic development as well as political matters if a settlement is reached.5 Jordan's importance to the peace process has been underscored by various U.S. administrations:
Jordan's pivotal role in President Reagan's September 1  Middle East Peace initiative along with its moderating influence in a highly unstable region makes it a country of special political and strategic interest to the United States. Thus, it is not unreasonable to expect that our economic assistance relationship with Jordan will continue through the 1980s.6
Guaranteeing the stability of Jordan, encouraging it to fulfill its strategic role in the region,7 and ensuring that it would participate in peace negotiations,8 became components of American policy. Two major USAID policy directives were undertaken to achieve these goals. The first focused on extending assistance to Jordan in order to prevent its economic conditions from deteriorating and affecting political policies:9
Political uncertainty and insecurity adversely affect the development process by discouraging investment and tourism, and diverting governmental attention from the problems of development.10
The second directive sought to guarantee Jordan's freedom of action by preventing it from becoming too dependent on any one source of assistance. Jordan's dependence on Arab financial aid was perceived to “limit Jordan's ability to maintain its moderate stance in the area,” jeopardize U.S. strategic interests in Jordan and lessen U.S. influence on Jordanian policymakers.11 Any reduction in U.S. assistance was seen as driving Jordan into the arms of Arab donors.12 These concerns were voiced particularly following the 1967 Khartoum Summit, which promised more support to confrontation states such as Jordan. Increased aid from Kuwait and Saudi Arabia ensued.
There have been numerous shifts in USAID policy regarding Jordan, three of which were major ones. In the 1950s and 1960s the United States extended economic' assistance to Jordan to help it balance its budget, finance infrastructure. projects, and – most important – maintain economic and political stability. A shift in policy took place in the 1970s, when basic human needs took priority over security concerns. The latest shift occurred in the 1980s, when USAID came to focus on restructuring Jordan's economy.
USAID Budgetary Support
From its inception in 1921, Jordan has been dependent on external financial assistance. Its developmental efforts and financial independence have been hampered by several factors: scarce natural resources and a narrow economic base, limited arable land (only about 6 percent), a high birth rate, and the successive immigration waves resulting from the Arab-Israeli conflict.
Constrained by its limited economic resources and a high balance-of-payments deficit, Jordan's survival depended on USAID budgetary support. The United States began extending assistance to the Jordanian government in the 1950s, replacing the United Kingdom as its main benefactor. Almost half the U.S. aid has been used to cover the budget deficit: $38 million of $77.5 million in 1979;13 $30 million of $75 million in 1980. Only $45 million was assigned to projects during this period.14
Three aspects of U.S. budgetary support to Jordan stand out. First, a significant portion of this support was allocated for defense expenditures to assist the Jordanian government in maintaining tight political and military control. Defense expenditures reflected the need of the Jordanian government for internal security during the period of political upheaval (martial-law provisions were in effect) and external security as a confrontation state vis-a-vis Israel. The government's expenditures on defense and internal security in 1973 exceeded domestic revenues.15
Second, U.S. budgetary support to Jordan was meant to lessen its dependence on other donors. As noted by USAID officials,
The political reasons for the recommendation regarding budget support are our interest in helping Jordan maintain a moderate policy in the Middle East, financially independent from any one source, and in helping Jordan maintain financial flexibility in addressing potential dissatisfaction within the Government sector.16
Third, in receiving support for its budget rather than for developmental purposes, Jordan was “atypical”:
In our judgment the Congressional mandates and worldwide AID program guidelines seem less directly applicable to Jordan than perhaps to other countries. The GOJ [government of Jordan] faces and will continue for some time to encounter sizeable budget and balance-of-payments deficits.17
As Jordan became more politically and economically stable, USAID officials sought a gradual reduction of direct budget support, which declined beginning in 1977.18 The Jordanian economy witnessed a period of economic growth during the period of 1973-76. Its trade deficit was offset partially by its nearly 7 percent GDP growth: commodity exports (manufactured goods, agricultural production and phosphate sales)19 increased more rapidly than commodity imports; official transfers from oil-producing countries increased following the Baghdad Summit, which pledged support to confrontation states;20 and remittances from Jordanians working abroad totaled $345 million in 1976 alone.21
Meeting Basic Human Needs
In the mid-1970s, USAID shifted its priorities in Jordan from budgetary support to developmental concerns – again, politically motivated:
In this regard, the prospects of shifting aid to Jordan from budget support to a concrete program of economic development was primarily a function of our [U.S.] political interests, in particular the results of the current Mid-East negotiations.22
This shift was motivated by the fear of increased domestic political instability due to the inequitable distribution of the fruits of the economic boom, which had impoverished some segments of the population, particularly public-sector employees. This hardship was caused by increased inflation, reaching 15 percent in 1976; a tripling of fruit and vegetable prices as a result of the demand for exports of these commodities; the higher wages of Jordanians employed in the Gulf states or in the private sector; and an increase in land speculation and housing prices due to a 20 percent annual increase in the money supply.23 Therefore, USAID in Jordan shifted to economic development
to help Jordan maintain internal stability by meeting the basic human needs of all components of its population equitably, and to increase its ability to act independently by strengthening its economic base through generation of domestic revenues accruing to the government and export earnings.24
USAID and other development agencies began advocating the concept of meeting “basic human needs,” which meant, in effect, the provision of basic services such as water, housing, health, education and transportation; limiting disparities in income levels; and narrowing regional disparities. Several areas were identified by USAID as basic human needs: (1) the provision of table water; (2) addressing health, nutrition and family-planning issues; (3) increasing the incomes of farmers; and (4) providing education, employment and housing for target groups. The political overtones of U.S. aid to Jordan can be assessed by examining the first of these.
Provision of Potable Water
The supply and quality of drinking water was perceived as the most inadequate service in Jordan. Water demand exceeded supply: only 60 percent of the urban population were connected to piped water systems in 1976, and supply was 40 percent less than consumer demand.25 Available water had high levels of nitrate concentrations and was polluted as a result of unhygienic domestic waste disposal, back-siphonage and agricultural contamination.26 This poor water quality was resulting in major health problems among infants and children, such as gastrointestinal diseases and nutritional problems.
Prior to the mid-1970s, the water supply strategy of USAID focused on water needs for agriculture. With the expansion of urban centers, this concern shifted to addressing the needs of these areas and the industrial sector. Specific projects designed to address the expanded demand for urban water and sewage systems were the Maqarin Dam project; the Jordan Valley irrigation schemes; urban water and sewage projects in the cities of Amman, Aqaba and Irbid; and finally establishing the National Water Authority. These projects aimed at providing loans and technical assistance to major water and sewage projects in the main urban centers; extending services and loan assistance to remote villages and smaller municipalities; and providing loans, technical assistance and research grants to projects emphasizing the use of solar energy to purify village water.27
The Maqarin Dam Project and Potash Production
The Maqarin Dam project was the centerpiece of USAID water-sector strategy. It could meet the water needs of urban and rural areas of northern Jordan as well as those of industry, increase irrigated agricultural lands in the Jordan Valley, expand agricultural output to attain self-sufficiency, and increase agricultural exports. The project was also significant for regional water sharing and therefore crucial for the political relationships between countries that share the Jordan River Basin – Jordan, Syria and Israel.28
On the other hand, the potash production project was aimed at increasing foreign-exchange earnings and decreasing the deficit. This objective of minerals development was expressed by both USAID officials and the Jordanian government. The development of a potash industry seemed very promising, with an estimated capacity of one million metric tons per year from Dead Sea brine. Not only potash but other minerals – bromine, copper and uranium – were seen as possibly having commercial potential.29 Both projects were crucial to USAID not only because they increased the revenues of the Jordanian government, but because of their political overtones. In its projected support for fiscal year 1979, USAID expressed concerns that,
if funding limitations or political circumstances prevent the U.S. from supporting the Maqarin Dam in FY 1979, we would wish to proceed with a $127.5 million program including potash at $50 million. This level still contributes favorably to the political climate surrounding upcoming Mideast discussions.... That level might minimally satisfy our political interests and economic objectives, but make no special contribution to forward movement of peace negotiations.30
Only after the political objectives of aid were met were economic concerns addressed. As noted by USAID officials, “The projects also contribute directly and substantially to the objectives of our economic assistance program,”31 focusing on meeting basic human needs.
The Jordanian government also sought American financial involvement in the projects precisely for political reasons. The Jordanian government and other donors realized that only the United States was “in a position to help resolve the politically sensitive water rights issues,” and therefore deemed that a “U.S. role is obviously essential to this project.”32
Expanding the Private Sector
The third policy shift in USAID directives in Jordan took place in the mid 1980s. The developmental drive of USAID became intensified with the economic hardships Jordan faced in the mid 1980s as a result of the global economic recession. Several factors coalesced leading to a recession in the Jordanian economy, with the real GDP declining to 3.5 percent in 1983. The recession experienced in the oil-producing countries as a result of falling oil prices led to a decrease in financial assistance granted to Jordan and to a decline in workers' remittances. Arab economic assistance to Jordan, promised at the 1978 Baghdad Summit, dwindled from $1,250 million annually to $554 million in 1983.33 The Iran-Iraq War decreased Jordanian exports to Iraq (its main trading partner). And the world demand for phosphates (which accounted for one third of Jordan's exports) declined. Consequently, Jordan's industrial production declined; activities of the service sector slowed down, due to cuts in governmental spending and a decrease in foreign trade; agricultural production dropped, due to droughts in the mid 1980s; unemployment levels increased and foreign debts mounted.
USAID focused on increasing Jordan's economic growth by promoting exports. The new emphasis shifted from capital infrastructure projects to concentration on three areas: private-sector development in both agriculture and business, institution building, and technology transfer.34 Private-sector development focused on decreasing the government's role in agricultural marketing and price controls. Institution building emphasized mid-level and advanced management training and improving capital and financial markets.
USAID also sought to strengthen the mechanisms of exchanging technical information between American and Jordanian professional organizations.35 This third policy orientation mandated that all new projects must consist of technical assistance rather than financing capital projects. The sectors to be affected were water, population/health, agriculture and education/training.36 Technical assistance was to be implemented through American consultants from both the private and public sectors as well as academic institutions:
USAID's major goal is to ensure that all projects highlight and emphasize technology transfer. In short, technology transfer will serve as a corner stone of the USAID program and fully complement our other development concerns in the areas of private sector development, institution building and to a lesser extent, policy dialogue.37
THE JORDANIAN GOVERNMENT AND USAID
At different times the relationship between USAID and the Jordanian government can be characterized as having a congruence of interest, a mediated conflict of interest, and an outright conflict of interest.
Congruence of Interest
For the most part, USAID officials supported the priorities of the Jordanian government set out in its various development plans. This was particularly true in three areas. First, there was a coordination mechanism in place to plan and implement policies, which was carried out through the Jordanian National Planning Council (NPC) and the mechanism of “policy dialogue” devise by USAID. The NPC has been the mam agency responsible for negotiating as well as coordinating all technical and capital assistance projects in Jordan. USAID has had strong connections with the NPC through joint regular and periodic reviews of priorities and project ideas.38
USAID was also able to harmonize its relationship with the Jordanian government through adopting the “policy dialogue” approach, based on using the “project/sector” framework.39 Through consistent dialogue with the Jordanian government, USAID was able to realize its policy objectives. For example USAID sought to create a unified central coordinating authority for all Jordanian governmental agencies involved in the water sector. The Jordanian government rejected this proposal for fear that such centralization would represent “too great a concentration of economic and political power.”40 However, through policy dialogue, USAID and the World Bank were able to convince the NPC and later the government to establish in January 1984 the National Water Authority responsible for water allocation and conservation, setting rates, taxes and so on. This was perceived as a major victory for USAID efforts to achieve policy dialogue at all levels.41
The second area of a congruence of interest between USAID and the Jordanian government was achieved when both agreed on some priorities. One was agriculture, including the development of the Jordan Valley for agricultural and resettlement purposes and increasing agricultural technology and production (particularly wheat). Another was the basic infrastructure projects implemented in the 1960s and early 1970s, which Jordanian officials considered the most successful of USAID-funded projects. These included building schools, roads, communication networks and bridges. USAID assistance also was given to carry out economic feasibility studies. Other donors were hesitant to allocate funding for these purposes and favored instead funding the implementation of projects.42
The third area of congruence of interest involved cases where USAID attempted to accommodate as much as possible the policy directives of the Jordanian government. Aid was channeled to different priorities at the request of the government, such as in the area of health and educational infrastructure. Indeed, even when the USAID budget was earmarked for a specific project and the Jordanian government obtained a substitute supporter, USAID met the demands of the government and redirected the allocated budget elsewhere. For example, when the Jordanian government negotiated a contract with a Syrian firm for the construction of grain facilities at Aqaba and received funding for it, USAID agreed to reprogram the $9 million budgeted for the project to other projects, such as rural/urban electrification.43
USAID project priorities matched the Jordanian government's five-year goals. For example, the 1976-80 development plan emphasized bringing about a fundamental change in the economic infrastructure through the development of the manufacturing sector, the realization of high real rates of growth, and a fair distribution of income and labor development.
This high coincidence level between the objectives of the Jordanian government and USAID leads to the question of who is influencing whom. Is USAID pushing the Jordanian planners to focus on baste needs to assure stability of the area, or is the Jordanian government fearing social instability and focusing more on equity in its demands for USAID assistance?
It seems that USAID and other development agencies, by the sheer weight of their financial support, were able to influence the Jordanian planners. This is clearly manifested by comparing the 1976-80 Jordanian development plan with the 1980-86 plan. The first relegated the "fair distribution of income and labor development" to third and fourth place in its target goals. On the other hand, the 1980-86 development plan only mirrored the outlined projects' rationale, as noted by AID officials:
To the extent the AID program can help alleviate this sense of frustration, and provide greater assurance that the government is concerned with and at tempting to improve the quality of life of the low-income majority, the more the Jordanian government will be able to assure the stability required to allow it to pursue moderate policies in the Mideast peace context.44
Mediated Conflict of Interest
There were instances when a conflict of interest developed between these two aid partners; however, USAID tried to placate the Jordanian government by mediating a solution rather than coming to a stalemate. Two examples illustrate this relationship. First the government aimed to provide housing to meet the needs of army officers, civil servants and middle-income groups rather than the poor. Perhaps the government's interest in supporting these groups, especially those on its payroll, was to enhance its legitimacy since these groups constituted its backbone support. Accordingly, the government requested USAID funding for a housing project for civil servants outside Amman. Rather than reject the proposal outright, USAID negotiated another solution, as noted by its officials,
We have indicated our lack of enthusiasm. We have agreed to consider possible ways of extending assistance for the construction of low-cost housing for the poor in a broader context of general urban rehabilitation.45
Another example of a mediated conflict of interest occurred when USAID turned down a request by the Jordanian government for technical and capital assistance to government-planned industrial estates and free-trade zones. USAID advised the Jordanian government to implement such projects with the assistance of other donors, while USAID provided basic general services, including offering vocational training to the labor force.46
Outright Conflict of Interest
A conflict of vision occurred between USAID officials and the Jordanian government in instances where the Jordanian government perceived that USAID projects, such as decreasing food subsidies and implementing family-planning programs, would jeopardize its own legitimacy and survival. The government feared the social and political ramifications that such programs might unleash among its conservative population. USAID requested, to no avail, that the government decrease its food, energy and water subsidies in order to use USAID budgetary and financial support more effectively.47 Secondly, USAID was unable to persuade the Jordanian government to implement family-planning programs.48 USAID officials noted that there was a divergence of interest between themselves and Jordanian government administrators, some of whom were “skeptics about the effectiveness of family-planning programs,” and others who believed that “development alone will solve the population problem.”49 USAID chose not to provoke “undue opposition and therefore set back future progress.”50
Development planning in Jordan has been affected by structural characteristics specific to Jordan as well as by USAID's own objectives and operating mechanisms.
Characteristics Specific to Jordan
The effort by USAID officials to promote development planning in Jordan has been plagued by the same difficulties faced by the Jordanian government. Internally, development planning was hampered by a low level of investment by the private sector, a lack of natural resources, and erratic price fluctuations in the market for mineral exports. Externally, development planning was affected by the unpredictable amount of foreign financial assistance; the impact of refugees from the Arab-Israeli conflict, increased defense budgets, the loss of tourism revenues and the markets of the occupied territories, and the impact of inter-Arab politics.
Despite the fact that structural problems were out of Jordan’s control, USAID officials felt that there were administrative and bureaucratic problems inherent in the Jordanian structure that impeded the planning and implementation of projects. Some of these inefficiencies were attributed to the nature and composition of Jordanian society itself. USAID officials regarded the Jordanian government's administrative performance shortfalls as stemming from
...cultural, historical, and political reasons. Unwillingness to delegate and coordinate decisions, strong family ties and obligations with limited national identity and loyalty, and long periods of insecurity, etc. impinge upon governmental actions and decisions.51
Secondly, USAID blamed the Jordanian bureaucratic structure for hampering project implementation. For example, there was duplication in governmental implementing agencies. The military establishment and the Ministry of Health were both responsible for providing health services. There was also the problem of fragmentation of authority among governmental agencies working in the same sector, a characteristic that constrained efforts to bring together the various agencies to implement complex projects. Finally, governmental institutions were hierarchical and centralized, which left no room for delegation of power and thus inhibited middle managers from taking unilateral decisions.52
Jordanian officials felt that USAID officials, in many instances, lacked the necessary know-how for successful project implementation within the Jordanian context. Jordanian planners perceived that the success of certain projects hinged on understanding Jordanian culture and how business operates in Jordan. Indeed, they pinned the failure of one major project on what they termed the “cultural gap” between American and Jordanian business practices. This was the case with the Private Enterprise Technical Resources Assistance (PETRA) project. The PETRA project was initiated in 1986 with a $15 million budget to increase the overall productivity and growth of the private sector. The project entailed providing loans to small scale enterprises to enhance the privatization effort, promote exports and decrease the budget deficit. Many of USAID debtors defaulted on their loan payments. Jordanian officials attributed the defaults to the fact that loans were granted without examining the business record of the debtors or establishing proper mechanisms to ensure repayment, such as requiring collateral.53
USAID's Ends and Means
The USAID program also experienced specific problems emanating not from the Jordanian socioeconomic and political setting, but from USAID's own objectives and internal mechanisms. Because U.S. economic assistance to Jordan is premised on political rather than economic considerations, USAID officials lack a comprehensive understanding of Jordanian budget planning.
Although there has been a continuous overall interest by USAID in Jordan's economic development, this concern has been overshadowed by much more important political concerns. Indeed, Jordanian planners criticized this economic assistance because of its political nature. They felt that it was a political "stick" that might be used in response to political events, such as the Gulf War or the peace process.54 In fact, this preoccupation with politics actually lessened USAID's ability to control or influence budget planning in Jordan:
As long as our [U.S.] assistance levels are determined predominantly by political circumstances with little or no regard for development or other needs, we forgo any leverage on defense and development expenditures as well as on the budgetary process itself.55
Indeed, being in the dark made USAID officials feel shunned, if not locked out: "Despite the magnitude of our economic and military assistance, we are kept at considerable distance from the budgetary process."56 This political orientation of economic assistance made it difficult for USAID officials to gain comprehensive understanding of the country's economic dynamics or its needs:
Official figures provide inadequate insight into the budget's real meaning. Even though political rather than economic considerations essentially determine budget support levels, greater knowledge of "real" needs would be most helpful. Unless political circumstances permit simply arbitrary reductions in budget payments, setting minimal future requirements will be next to impossible without greater understanding of the budget and the basis on which budget decisions are made.57
The level of USAID assistance is dependent on internal U.S. policies; therefore, any changes in American foreign policy or domestic economic interests affect the level of assistance to Jordan. This is clearly manifested in the reductions made because of the changes in policy orientation of various U.S. administrations.
These fluctuations and sudden reductions in anticipated program funding had negative ramifications on USAID goals in Jordan and on the Jordanian government's own planning. The fluctuations confused other donors interested in partial funding of USAID designed projects; hampered realistic development planning by Jordanian decision makers, who depended on estimated external funding for projects;58 led to superfluous work by USAID personnel; and constrained their relations with the government of Jordan:
Equally important, both for relations with Jordan and for AID staff and workload planning, we are already midway through FY 1981 and have little idea what will be the assistance levels for this year or next. This delays GOJ implementation of projects at substantial cost to them, misallocates USAID staff time to designing projects which may never materialize, and confuses our relations with the Jordanians.59
Therefore, USAID personnel in Jordan emphasized that Jordan should not face such budgetary fluctuations but be earmarked for consistency's sake. They viewed USAID budgetary programming as having “no flexibility for meeting contingencies, new foreign-policy initiatives, or even previously planned program levels.”60
USAID hiring mechanisms also obstructed realistic planning. Staffing was an arduous and lengthy procedure. The long gaps between replacements led to inefficient management practices and diminished the effectiveness of USAID officers in policy dialogues with their counterparts.61
Solutions to Structural Problems
The solution adopted by USAID officials to what was regarded as the overall administrative ineptitude of the Jordanian government was to increase the number of American consultants and technical experts, especially in “key sectors” in order “to play a more operational role.”62 Indeed, USAID seemed to have focused more than other international donors on technical assistance. In fact, this concern made USAID at times reject Jordanian government proposals that had few technical-assistance components. An example of this was the Rain-fed Areas Capital project. The feasibility study was carried out by the U.N. Food and Agriculture Organization (PAO), yet USAID rejected it:
The Mission believes that such a project is more suitable for financing by other donors, especially those with less interest in technical assistance programs.63
The Jordanian government objected to the hiring of American experts for three reasons. First, the government expressed concern that this aspect limited the participation of Jordanian personnel, contractors or engineering services. Second, Jordanian planners felt that the consultants’ and experts’ fees were astronomical, and these were deducted from the overall assistance package. Indeed, the Ministry of Planning stated that these expatriates were a “big burden in all projects” and that the Jordanian government “had no choice but to accept this deficiency.”64 Third, Jordanian officials felt that, due to the mechanisms of USAID operations, there was too little contact between the American consultants and their Jordanian counterparts. This prevented the Jordanians from getting the training necessary to replace those consultants.65
USAID insisted on hiring American technical experts, claiming a lack of skills among the Jordanians.66 This perception of the ineptitude of Jordanians was highlighted by the USAID mission’s belief that without American technical assistance and a high level of direct supervision, projects would not be implemented in a satisfactory manner:
To ensure both project feasibility, socioeconomic viability, and compliance with, for example, benefit-spread objectives, or the degree to which a given project will effectively expand the range of choice available to or permit participation of, say, a group of health services recipients, we have been able to make use of both our Technical Services and Feasibility Studies Grant Project and TOY support out of Washington to assure our selves that projects proposed will in fact-at the implementation level accomplish the objectives desired.67
It seems that the goal was to benefit American businesses and institutions. In fact there was a stated concern that with the decline of USAID's funding levels to Jordan there would be a concomitant decline in USAID's ability to influence or renegotiate “the content of regulations and guidelines under which contractors work in Jordan.”68 The AID mission was heavily involved in the supervision of American firms in Jordan, including regulation, taxation, contracting and procurement procedures.
This focus on furthering U.S.-based firms and institutions was included in the USAID strategy for fiscal 1982-85 and aimed also at establishing linkages between American and Jordanian agencies and institutions. This was sought precisely to "facilitate continuing technology transfer, provision of special expertise, and information sharing” as well as American-Jordanian trade relations. For example, relationships were established between American universities and institutions, such as Ohio State University and the Washington Suburban Sanitary Commission and their Jordanian counterparts involved in AID projects.69
For its part, the Jordanian government felt that what sapped many projects of their optimum efficiency, such as those for enhancing export promotion, was the "tied" nature of American aid. This meant in effect that for the implementation of any USAID project, only American inputs could be used (computers, civil-aviation landing systems, automobiles, agricultural machinery, etc.). This procedure meant that the Jordanians could not purchase these inputs on the market at more competitive prices and that American firms were the ones benefiting, thus transferring USAID money back to its source.70
Funding for projects was dictated, and the Jordanians felt that there was a "take it or leave it" attitude by the Americans. Since the Jordanian government has been strapped for financial assistance and unable to fund its projects, it was believed that "any sort of funding is better than nothing." Although Jordanians felt that their funding priorities and USAID diverged in many areas, such as health or privatization, they were compelled to accept the assistance granted rather than lose it altogether. The recent population-oriented projects are an example.71
USAID AND OTHER DONORS
The Jordanian government's overall performance in the design and implementation of development projects was regarded by USAID and other donors as very efficient, which warranted further extension of assistance.72 For example, Jordan received 143 million dinars in undispersed funds from 13 countries in 1977 alone.73
USAID never acted alone in providing economic assistance to Jordan. NonU.S. loan disbursements were estimated to have totaled about $57 million in 1976 for the country as a whole, with the Kuwaiti Fund providing $13.5 million, the German Bank for Reconstruction providing $13.2 million, the Arab Fund for Economic and Social Development providing $6 million, and the United Kingdom and the International Development Association (IDA) providing $5.2 million each.74 This high external financing level made it impossible for USAID officials not to coordinate their efforts with other co-financiers of the Jordanian projects.
In the early 1980s, Arab states were the largest source of aid to Jordan. Kuwait and Saudi Arabia were the principal bilateral Arab donors, followed by the U.A.E., the Arab Fund for Economic and Social Development, and Iraq. Combined assistance from Arab sources reached about $1 billion annually in budget support grants, additional project assistance and extra-budgetary military financing. Despite these high funding levels, however, the United States renamed the preeminent donor because of the longevity of its military and economic support to Jordan. Moreover, throughout its years of support, the USAID mission in Jordan has come to play a "catalytic" role for Jordanian government development planners especially in the areas of feasibility studies and design work. USAID technical and economic analysis for specific projects was in many cases used to seek funding from other donors. For example, the Zarqa-Ruseifa Water and Sewerage project was designed by USAID, but the construction costs came from USAID, the World Bank, the West German Development Fund, the Islamic Development Bank and the Jordanian government.75 Moreover, USAID staff were used as a "source of technical advice on costing of procurement issues and approaches."76
Although there was no exchange of specific information among donors especially in the field of technical assistance,77 there were monthly meetings held in Amman among all major Western donors. These meetings were held to coordinate efforts, establish close working relationships, share technical expertise, establish coordination in both technical and capital assistance,78 and avoid duplication in projects. The meetings were at tended by the president of the National Planning Council, who reviewed Jordanian development policies, problems and prospects.79 All USAID discussions with the GOJ, however, were carried out on a bilateral basis. The exception to this was in areas where other donors were involved. For example, USAID coordinated with the World Bank in reaching mutual project objectives involving agriculture and water.
The cooperation between USAID in Jordan and other donors has ranged from high to nil.
There were three areas where donor coordination reached the highest levels and was most effective in both technical and capital assistance: developing the Jordan Valley, expanding potash production, and generating electricity and providing electric services. Donor coordination reached its zenith in the development of the Jordan Valley because there was a working plan for the region and because each donor understood the relationship between its own projects and the others'. The projects pulled together the efforts of USAID, the Japanese, German, British and Arab governments as well as the World Bank.80 There were eleven infrastructure projects underway in the valley in 1979 alone, financed by the Jordanian government with the assistance of various donors.
Donors cooperated in financing irrigation technology and technical assistance projects, and assisting the Farmers' Association in soil conservation, marketing and research. For example, the development of irrigation canals m the Jordan Valley was carried out through the cooperation of USAID, which laid the infrastructure for the North East Ghor Irrigation schemes; the International Development Association (IDA), which provided funding for the North East Ghor Irrigation; and the Kuwaiti and Abu Dhabi Funds, which built the King Talal Dam.
Donors also divided funding tasks between themselves. For example, with the co-financing of the Jordanian government, the Kuwaiti Fund built the Zarqa Dam to provide water for the USAID Zarqa Triangle project. Similarly, the Kuwaiti Fund built the HisbanKafrein Irrigation projects and financed the village water program, while USAID focused on extensions of irrigation canals; the World Bank financed the development of side wadis and land improvements in the northern sector of the valley; and West Germany financed projects in its southern section.
There was coordination not only in irrigation infrastructure, but also in developing agriculture in the Jordan Valley in general, especially in technical assistance and training. FAQ financed training programs for rural youth in irrigated farming. USAID, in cooperation with the World Bank and the Federal Republic of Germany, provided sprinkler irrigation equipment.81 The Netherlands and the United Kingdom provided technical assistance in marketing in cooperation with the Jordan Valley Authority.82 UNDP/FAQ cooperated in agricultural marketing and the technical assistance project, 'Integrated Agricultural Development of the Rain-fed Areas," which aimed at promoting improved production methods for dry-land farming in the Irbid Governorate by working directly with cooperatives in the region as vehicles for input supplies, credit and marketing.83 The Near East Foundation provided assistance for soil conservation and forestation as well as farm-flock development. West Germany, in cooperation with FAQ, provided assistance for tobacco farming and veterinary services, while the United Nations assisted in animal husbandry. The Netherlands, FAQ and USAID provided assistance to the Farmers Association, particularly in extending credit and technical advice.84 Finally, the Ford Foundation financed out reach programs concentrating on research, demonstration, and production improvement of cereals.85
The second area of coo ration among donors was in electrification projects in rural villages and urban centers. For example, the IDA and the Kuwaiti Fund, in cooperation with the Jordanian government, constructed the Hussein Generating Plant near the city of Zarqa to improve electrical services to the area.86 Coordination between USAID, the World Bank and the United Kingdom took place on the Amman and Aqaba water and sewage projects.”
The third area of cooperation was in the development of potash production and marketing. The Jordanian government was able to augment its $3 million contribution with a $6 million USAID loan and $1 million in credit financing from the IDA to conduct feasibility studies.88
USAID also provided direct funding for other donors development efforts. It gave assistance to the CARE Foundation, which carried out nutritional surveys and provided feeding centers for villagers.89
The second level of cooperation between USAID and other donors was based on the specific comparative advantages of donors where interest and expertise in particular areas justified that donor's bigger role. Accordingly, areas of interest were delineated among donors. For example, to enhance export earnings in 1979 through the promotion of the tourist sector and small-scale industrial enterprises, USAID focused only on offering training opportunities and financing feasibility studies while the World Bank took over the project.90
Mutual understanding between USAID and some other donors was hindered due to conflicts of interest, disagreements over project rationale, and even differences in management style. For example, despite the fact that both USAID and Catholic Relief Services carried out development projects in Jordan, USAID avoided cooperation with CRS because of “some CRS management practices that AID found unacceptable.”91
U.S. economic assistance extended to the Jordanian government has played a vital role in Jordan's development. Without it, the government would have been unable to finance its astronomical defense expenditures and strategies for comprehensive development; to build its infrastructure; to expand agricultural production; and to enhance the efficiency and capacity of public and private institutions. For the most part, these development objectives have been achieved without much conflict of interest between USAID and the Jordanian government.
However, this study also highlights some of the negative aspects of the U.S. foreign-assistance program: the problematic nature of technology transfer, the lack of understanding on the part of USAID officials of the country's real needs, and the fostering of dependence on foreign consultants to the detriment of Jordanians. Indeed, technology transfer and USAID procurement policies buying American equipment and supplies may not have been the most efficient means of solving development problems or enhancing the administrative capacities of Jordan.
More significant, although neither new nor peculiar to Jordan, USAID's development objectives have been over shadowed by U.S. political goals. USAID would be more effective if the economic objectives of assistance were separated from the political ones, and if the levels of economic aid did not suffer from fluctuations in policy.
1 USAID, Development Assistance Program (DAP), FY 1975 Jordan (Department of State, February 1975), p l.
2 Ibid., p. l.
3 USAID, Country Development Strategy Statement (CDSS), FY 1981 Jordan (Department of State, Jan 1979), p. 2.
4 USAID, CDSS FY 1983 Jordan (United States International Development Cooperation Agency, February 1981), p. 14; and USAID, Annual Budget Submission (ABS), FY 1979 USAID Jordan (Department of State, June 1977), p. l.
5 DAP, FY 1975, p. l.
6 CDSS, FY 1985, p. 21.
7 CDSS, FY 1983, p. 17.
8 DAP, FY 1975, p. l. See also ABS, FY 1979, p. 15.
9 DAP, FY 1975, p. l.
10 Ibid., p. 8.
11 Ibid., p. I. See also ABS, FY 1979, p. 3.
12 ABS, FY 1979, p. 3. See also CDSS, FY 1978, p. 17.
13 ABS, FY 1979, p. 2.
14 CDSS, FY 1978, p. 43.
15 Ibid, p. 11 See also DAP, FY 1975, p. 7.
16 CDSS, FY 1978, p. 43. See also DAP, FY 1975, p. 7.
17 DAP, FY 1975, p. 7.
18 CDSS, FY 1981, p. 1.
19 ABS, FY 1979, p. 5.
20 Because of its status as a confrontation state, the Baghdad meeting of 1979 agreed to cover Jordan’s budgetary deficit. The Baghdad budget support grants reached $1.25 billion and later fluctuated as a result of the failure of Libya and Iraq to meet their obligations CDSS, FY 1983, p. 17. See also CDSS, FY 1981, p. 7.
21 ABS, FY 1979, p. 6.
22 DAP, FY 1975, p. 10.
23 ABS, FY 1979, pp. 4-5.
24 CDSS, FY 1981, p. 1.
25 CDSS, FY 1978, p. 19.
27 Ibid., p. 34.
28 CDSS, FY 1983, p.10. See also CDSS, FY 1981, p. 2.
29 ABS, FY 1979, p. 50.
30 Ibid., p. 3.
31 Ibid., p. 2.
32 Ibid., p. 12.
33 CDSS, FY 1986, p. 5.
34 CDSS, FY 1985, p. 1.
35 Ibid., p. 11.
36 CDSS, FY 1986, p. 11.
37 CDSS, FY 1985, p. 14.
38 CDSS, FY 1978, p. 48.
39 CDSS, FY 1985, p. 7.
41 CDSS. FY 1986, p. 16.
42 Interview with Dr. Nail Hamdan, USAID Coordinator, Ministry of Planning, Amman, June 1994.
43 ABS, FY 1979, p. 17.
44 Ibid., p. 7.
45 CDSS, FY 1978, p. 40.
46 Ibid., p. 41.
47 CDSS, FY 1983, p. 25.
48 CDSS, FY 1981, p. 15.
49 Ibid., p. 16.
50 CDSS, FY 1978, p. 36.
51 DAP, FY 1975, p. 7.
52 CDSS, FY 1978, p. 33.
53 Anonymous interview, Ministry of Planning, Jordan, June 1994.
54 Interview with Dr. Nail Hamdan.
55 DAP, FY 1975, p. 8.
56 Ibid., p. 9.
57 DAP, FY 1975, p. 9.
58 CDSS, FY 1983, p. 18.
59 Ibid., p. 20.
60 CDSS, FY 1983, p. 20.
61 CDSS, FY 1985, p. 10.
62 DAP, FY 1975, p. 7.
63 ABS. FY 1979, p. 72.
64 Anonymous, Ministry of Planning, June 1994.
65 Interview with Dr. Nail Hamdan.
66 CDSS, FY 1981, p. 20.
67 CDSS, FY 1978, p. 48.
68 CDSS, FY 1983, p. 26.
69 Ibid., p. 27.
70 Anonymous interview, Ministry of Planning, Jordan, June 1994.
72 CDSS, FY 1983, p. 18.
73 CDSS, FY 1978, p. 33.
74 ABS, FY 1979, p. 14.
75 CDSS, FY 1985, p. 19.
76 CDSS, FY 1983, p. 32.
77 CDSS, FY 1978, p. 33.
78 ABS, FY 1979, p. 14.
79 CDSS, FY 1985, p. 19.
80 ABS, FY 1979, p. 14.
81 Ibid., p. 82.
82 Ibid., p. 81.
83 Ibid., p. 70.
84 Ibid., p. 81.
85 Ibid., p. 70.
86 Ibid., p. 102.
87 Ibid., p. 14.
88 Ibid., p. 119.
89 CDSS, FY 1978, p. 35. See also ABS, FY 1979, p. 130.
90 ABS, FY 1979, p. 14.
91 CDSS, FY 1978, p. 36.