Jordan bid to the Gulf Cooperation Council and Implications for the Expended GCC

In 2011, the Gulf Cooperation council (GCC) invited Jordan and Morocco to join the council. This research is geared to evaluate the potential benefits of joining the GCC for the case of Jordan. It is argued that Jordan’s inclusion to the block would strengthen the economy of the member states, increase trade and investment opportunities and improve peace in the region. GCC Membership to Jordan might possibly support its economy and larger investment flows from the Gulf countries. On the flipside, Jordan accession carries several potential benefits to the GCC. Jordan’s strength is linked with its close proximity to the GCC, cordial relationships with the US and the EU and free trade agreements with major economies. Moreover, Jordan inherits professional military. If Jordan is part of the GCC, it might consolidate the military power and augment security of the GCC. Since the Arab Spring, the peace of the Middle East remained volatile. Recent rift between Saudi Arabia and Qatar, war in Syria and Yemen further destabilized the security of the region. This has also undermined the future of the GCC. In these circumstances, the expansion of the GCC is realistic and Jordan case caries some merit.

as determine Jordan's candidature for the council. Rest of the study is further organized as follows: The next section presents the macro-economy of Jordan. The second section elucidates Jordan's total trade with world and the GCC. Section three covers mutual gains from the expansion of the council. Section four discusses the mutual gains to the GCC. Section five pinpoints the implication for expanded GCC. The section six concludes the study.

Jordan total trade with world and the GCC
Despite of its humble natural resources, Jordan has increased its foreign trade beyond the many competing countries. Jordan has the most open economy in the Arab world, joining more FTAs than any of its neighboring. It has bilateral free trade agreements with major economies, with substantial duty-free, import quotas and other benefits. Because of its trade links with leading economies and its access to the world's major markets such as America, Japan, China, Australia, Scandinavia and other EU countries, Jordan enjoys leverage over its neighboring countries. Jordan has become the member of the World Trade Organization (WTO) on December 17, 1999. Succession to the WTO has helped Jordan to enter into the world market and promote its trade and investment flows.
Jordan's international trade figures are shown in figure 1. As evident in the figure, Jordan's foreign trade continued to grow throughout the reporting period. In 2005, Jordan's international trade was limited to $14.72 billion. Its exports amounted to $ 4.27 billion, while imports were stood at $10.45 billion during the same period. The total trade of the country has increased by 13% reaching $ 16.6 billion in 2006. Jordan's foreign trade further increased in 2007, amounting to $19.23 billion. Jordan's international trade touched its heights in 2008 when its foreign trade reached to $ 24.5 billion mark .Its exports grew by 37% from $ 5.7 billion in 2007 to $ 7.78 billion in 2008.The imports have also increased by 24.5% from $13.53 billion to $16.87 billion during the same period. Jordan's foreign trade adversely impacted in 2009 and its exports and imports sharply contracted. Compared to 2008, Jordan's exports decreased by 14.7%, while imports have also shrinked by 16.6% in 2009. Jordan's foreign trade has picked up again in 2010, the volume of total trade has increased from $ 20.7 billion in 2009 to 22.28 billion in 2010. Its exports and imports rose by 5.8% and 8.5% respectively during the same period. (Figure 1). The statistical data issued by the Department of Statistics have indicated that the Jordan's foreign trade increased by 18.3% in January 2011, compared with January 2010. Total exports and re-exports have also increased by 18.3% and 18.6% respectively. The imports of the country have surged by 40.8 % during the same period. According to the World Bank, in 2017, Jordan's total value of exports was $ 7,469 million, while its imports stood at $ 20,407 million.

2.1: Jordan's bilateral trade with the GCC
GCC is one of the major trading partners of Jordan. During last couple of years, bilateral trade between the GCC and Jordan has increased noticeably. In 2017, the bilateral trade between Jordan and Gulf countries was estimated European Journal of Business and Management www.iiste.org ISSN 2222-1905(Paper) ISSN 2222-2839(Online) Vol.12, No.6, 2020 115 over $ 5 billion. According to the Jordan Department of Statistics, in 2017, the GCC accounted for 24.2% of Jordan's imports, while 18.4% of its exports were destined for the Gulf States. Jordan imports from the GCC are mainly comprised of mineral fuels, oil, plastic articles, iron and steel and aluminum articles and thereof. On the other side, Jordan exports to the GCC are chiefly consists of edible vegetables, fruits and certain roots, pharmaceuticals, inorganic chemicals, precious metals, stones machinery, electrical and electronic equipments, and articles of iron and steel.
The flowing figure 2 shows the bilateral trade of Jordan with the GCC. As evident from the figure, among the GCC, Jordan has stronger trade links with the Kingdom of Saudi Arabia. Saudi Arabia which supplies crude oil to Jordan topped the list of exporters to Jordan.

Source: Jordan Department of Statistics
In 2010, Jordan's trade (exports and imports) with Kingdom of Saudi Arabia surpassed $ 3 billion, while total trade between the UAE and Jordan was reported over $ 700 million. Jordan bilateral trade with Bahrain, Kuwait, Oman and Qatar was estimated at $ 306 million, $ 212 million, $ 60 million and $ 110 million respectively during the same period. The breakdown of Jordan's exports by country of destination is shown in the figure 3. It is revel from the figure that Iraq holds the top share in Jordan's domestic exports, followed by the U.S (13.4%), India (10.4%), Syria (7.4%), Saudi Arabia (7%), Lebanon (3.4%) and the UAE (2.6%).  The following figure 5 shows Jordan's major exporting commodities during the first quarter of 2011. As it is indicated in the figure, clothes and its related accessories stands top (14.7%) in the exporting items followed by vegetables(14.3%), crude potash(11.3%),crudephosphate(8.2%),fertilizers(7.9%),pharmaceuticalsproducts(6.3%) and others(37.3%).  The following figure 6 show Jordan's major importing commodities during the first quarter of 2011.As it is indicated in the figure, crude oil is the single most biggest importing item(12.3%)followed by machinery and its parts(8.6%),machinery electrical appliances(4.8%),vehicles, motorcycles and their parts( 7.5%), iron and its parts(6.7%),plastic and its products(3.2%)and others(56.9)

Mutual gains from the expansion of the council: Gains to Jordan
In comparison with the GCC, Jordan is a small economy with limited natural resources. Most of the experts believe that the GCC membership to Jordan will enhance the socioeconomic profile of the country. The accession to the GCC would enable Jordan to strengthen its economy, improve its trade deficit and boost foreign direct investment (FDI) from the rich six Gulf countries. On the economic fronts, Jordan is struggling with multiple challenges. Over the years, Jordan is the home of refugees; therefore, it heavily relies on foreign grants and aid to support the economy. In 2018, Jordan's budget deficit stood at $1.5 billion or 5.4% of the GDP, including foreign aid. The deficit is likely to remain high in the coming year. If Jordan is granted with the GCC membership, it would be eligible to apply for the monetary assistance from the GCC countries. Gulf Council provides monetary assistance to its members on the preferential basis. In 2011, when civil unrest broke out in Bahrain and Oman, the council has granted $ 10 billion each of the two countries. The grant was meant to improve the economic condition of the member countries. GCC membership would give Jordan the similar access to the cash and other financial assistance. 118 As Jordan's economy is growing, its energy needs especially demand for crude oil is surging with every passing year. For the energy needs, traditionally, Egypt and Iraq are the main oil suppliers to Jordan. But in recent years, Jordan's oil imports from the Gulf countries have also increased significantly. Figures from the UN Comtrade have indicated that in 2017, Jordan imported more than $ 2 billion of oil and related products from the GCC. GCC membership to Jordan might help to get oil supplies from the GCC on subsidized rates.
Compared to the GCC, the agriculture sector of Jordan is large. According to the World Bank report 2018, approximately 20-25 percent of Jordanian active population is engaged in agriculture and food sector. Agriculture contributes 25-30 percent of the GDP when indirect contribution (the food sector) is considered. The report has further pointed that Jordan has recently witnessed an upward trend both in the value added of agriculture and its share to the GDP. Due to its large agriculture sector, Jordan is one of the main suppliers of food items to the Gulf countries. In 2017, Jordan has exported more than $180 million worth of vegetables, fruits and meat to the GCC. Free access to the GCC markets will increase the demand for Jordanian goods which will untimely improve the trade deficit. Currently trade balance largely favors the Gulf countries. Jordan had over $ 2.6 billion of trade deficit with the GCC in 2017.
Close ties with the GCC would enable Jordan to receive larger investment flows from block. In the past, Jordan received sizable amount of investment from Saudi Arabia, UAE and Kuwait, but the flows of investment have been arrested for the variety of reasons. In an endeavor to attract more investors, recently, the Jordan Investment Board (JIB) has announced more than 150 new investment projects which may re-generate the old links between the GCC and Jordan. According to the board, eleven cities of Jordan are looking for foreign partners to invest in their multiples projects. Investors will be granted special license in free zones and will be exempted from income tax and custom duties. There is a need to revitalize the flows of FDI between the GCC and Jordan. Jordan is one of the least developed countries among the Middle East. According to some estimates, large population of Jordanian lives below the poverty line. Poverty is very high among the refugees. If Jordan is granted the GCC membership, its GDP per capita will increase which will ultimately raise the living condition of the local people. Tourism plays an important role in Jordanian economy and it contributes approximately 12% to the GDP. If Jordan is become the member of the GCC, there will be a significant boost to its tourism industry. According to the data from the Jordan Ministry of Tourism, during 2017-2018, over one million visitors from the six GCC states entered Jordan. Tourists from Saudi Arabia alone accounted for 16.2 % of total Jordanian visitors last year. Official figures indicated that the number of Gulf Arab tourists who visited Jordan last year made up 28.2 % of the total number of visitors. The number of tourists will increase many folds if the GCC and Jordan follow visa free policy. Jordan has remained a major supplier of high caliber professionals to the Gulf countries. They not only contribute to the development of the GCC but also are the major source of remittance to their home country. Annually, Jordan receives sizeable amount of remittance from their expatriates and its share to the GDP is over 9%. Free movement of labor force from Jordan to the GCC would not only help the GCC to acquire cheap labor force but it will also add considerable remittance to Jordan. budget surplus. To this end, Jordan's union could hamper the economic progress of the GCC members. Unemployment and poverty are high in Jordan. Figures from World Bank have indicated that in 2018, unemployment rate in Jordan was 13%. Since 2010, Jordan has not released poverty figures but according to some estimates, over 14% of the Jordanian lives below the poverty line. On the contrary, poverty and unemployment rate in the GCC is relatively low.
To some experts, Jordan inclusion will create lot of troubles to the GCC. Citing the example of the European Union, it is argued that after the establishment of the EU, the economic conditions of some of its members have further aggravated. Poor economic conditions of Spain, Romania, Portugal and Greece are partly blamed to the policies of the European Union.
Owing to the influx of foreign labor force, unemployment rate is gradually swelling in the GCC. In 2016, nonpayment of salaries crisis to foreign workers in Saudi Arabia sent a clear message to the foreign workers that the GCC is no more capable of accepting hordes of foreign worker. To address the issue and put a limit on the flows of foreign workers, recently Saudi Arabia, Qatar, Kuwait, UAE have outlined a new labor policy for the overseas employees. If Jordan is given the GCC membership, multitude of unemployed workers will enter into the GCC labor market, thus creating lot of pressure to the GCC labor market which is already reached to the saturation point.

Conclusion
It is assumed that in the long run, Jordan accession to the GCC will give boost to the economies of the member states and potentially supplement security of the region. However, there is need to re-estimate the cost and benefits of the move. There are large economic differences between Jordan and the GCC. Jordan economic conditions and infrastructure is weak. Its macroeconomic indicators-specially, public debt to the GDP, per capita income, savings and consumption are far behind the member states of the GCC. Correspondingly, on the economic development stages, the six oil rich countries enjoy the age of high mass consumption. Whereas, Jordan is still a developing country, hence, such variations in the economic structure of the blocks might pose serious challenges to the integration process.
It took fifty years to form the European Union. Recent economic crisis in the Southern and Eastern Europe, European sovereign debt crisis, have established the fact that the integration is not a panacea to all economic ills. Hence, before granting the GCC cap, it's vital to provide enough time to Jordan so it can develop its infrastructure and harness its economy in align with the GCC. Investment should be diverted to Jordan. It is the responsibility of the GCC to offer enough capital and the required resource to Jordan so it can catch up with development process.
During the formation process of the EU, some EU countries have been given financial assistance along with ten years' time frame work to develop their economies. The same formula may be applied in the case of Jordan. Expansion of the GCC is certainly much easier than the formation of the European Union as currently GCC is a block of only six countries and possibly-extend membership to couple of more countries in the near future. For the possible expansion of the GCC, a fund was established in 2011.The fund will provide financial assistance to the future member states and will assess the needs of the country and issue financial assistance accordingly. The fund will also offer soft loans to the aspiring countries. In 2018, the fund has sanctioned $ 2.5 billion grant to Jordan.
Until Jordan gets full membership, for the time being, a free trade agreement might be signed between the GCC and Jordan. Jordan has free trade agreements with some of the council members. Hewer, for the upliftment of trade and investment cooperation such arrangements are necessary. As some experts believe Jordan extension to the GCC is a natural fit. Jordan accession to the council will not only enhance trade and investment opportunities but it will also reinforce the historical ties between the Arab countries.

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Funding: This study is funded by the Yancheng Institute of Technology (Grant number Y8923J).