In the Middle East Contradictions Abound
Sept 7, 2007. Ramadi, Iraq: Iraqi and American flags decorate the body armour of US ambassador Ryan Crocker
Photograph: John Moore/Getty Images
It should come as no surprise that the Middle East remains embroiled in conflict. The Israeli-Palestinian conflict has been a constant source of turbulence (at least from 1948) and since 2003 the American occupation of Iraq has led to greater regional instability. And then of course there’s the occasional violence or bombing (Algeria in the past week), or wars that breakouts periodically (Israel v. Lebanon 2006). Which is to say nothing of the region’s historic instability (see here).
It’s no wonder then that Western investors are hesitant to invest in the region. To a large extent it is a matter of perception: the Middle East in its entirety is viewed as unstable. Yet, much, if not most, of that perception is not anchored in facts on the ground, but rather in sound bites and images. It is foolhardy to dismiss the entire region as not being suitable for investment. Clearly, the beta is higher in the region, but then so are the potential returns. Investing in the region necessitates a balanced perspective. While there are certainly areas where the risk profile would render investment foolish if not downright stupid (e.g. a tourist resort in the Golan Heights or Falluja), there remain sectors and geographies where significant returns can be realized (as evidenced by the boom in private equity investments in the region by firms based in the Middle East and elsewhere).
Jordan’s stability, relative to the region, and its neighbors – a testament to the Hashemite clan’s excellent politicking (with the notable exception of the whole incident with the British) – makes it very easy to forget that the country is squeezed in-between Israel/Palestine on one side and Iraq on the other. It would be naïve, however, to forget that Jordan is intimately tied to both, a good fortune borne of geography. And both conflicts have significantly impacted its own historical trajectory and its present state. There has been much ink spilled as to the economic effects of the large Iraqi refugee population – I won’t add further here. And the same can be said of Jordan’s relationship with Israel.
In spite of misperceptions, Jordan is arguably the most stable country in the region, in terms of its governance and economy. Walking through the many glitzy malls, shiny hotels, American restaurants and trendy cafes in Amman it’s very easy to forget that one is in the Middle East. That is until you see the ever-present photo of King Abdullah and/or the royal family adorning a public or private space smiling at you.
While Jordan is not Western Europe, it is certainly not Darfur either. When considering the Middle East its behooves the investor to have a balanced perspective of the particular nation of the investment and the region. While the two are intimately linked, none so clearly as Jordan, there are oases of stability where returns remain to be found. And Jordan is one of those locations.
