Jordan and Israel at odds over delayed cross-border industrial project

Yair Lapid’s plan to speed up construction work on Jordan Gateway met with indifference from officials in Amman

Members of parliament attend a parliament session ​in Amman, Jordan January 6, 2022. Reuters

Jordan distanced itself on Tuesday from a large cross-border industrial project jointly drawn up with Israel, whose Prime Minister Yair Lapid said the project was being accelerated.

Indifference among officials in Amman towards the Jordan Gateway project comes as the kingdom warns against excluding Palestinians from regional development schemes, boosted by the normalisation of relations between Arab States and Israel in the past three years.

The official Jordanian news agency quoted a source in the Investment Ministry as saying that the Jordan Gateway "was first proposed in 1998 and is run by the private sector", pointing out two factories that already operate in the zone.

“The project has stumbled in its completion from the Israeli side,” the source said, without giving details.

The Israeli government announced on Sunday that it will speed up the building of the 4 square-kilometre zone across the Jordan river, between the Israeli Kibbutz of Kfar Ruppin and the Jordanian town of Al Mashare.

Mr Lapid said: "This is a breakthrough that will greatly contribute to developing and strengthening the area."

He said the project would "bring employment to both countries" and "allow Israeli and Jordanian entrepreneurs and business people to communicate directly".

Demand for involvement of Palestinians

Unemployment in Jordan is officially at a record high of about 23 per cent, compared with 3.3 per cent in Israel.

The Israeli announcement was made days after Mr Lapid met King Abdullah in Amman. The king told Mr Lapid that the Palestinians must be included in any regional economic projects.

The Jordan Gateway is designed to house large factories, granaries, technology companies, a power station and a bridge connecting the two sides which will allow unhindered movement for anyone crossing it, the project's website says.

Israeli media reported that Israel froze the project after Jordanian Prime Minister Bisher Al Khasawneh lauded Palestinian stone throwers, as violence broke out in April at Al Aqsa Mosque in Jerusalem.

Foreign policy in Jordan is established exclusively by King Abdullah.

His father, King Hussein, signed a peace treaty with Israel in 1994, under which the countries committed to negotiate a free-trade area and increase “industrial co-operation”.

Jordan depends on Israel for a significant proportion of its water supply and the two sides have close security ties. But bilateral relations have been mostly lukewarm in public.

Last year Jordan and Israel struck a barter agreement, whereby Israel would provide Jordan with water in return for electricity from a proposed solar power plant.

Data from the Observatory of Economic Complexity show that Israeli-Jordanian trade remains modest, despite increasing since the 1990s.

Israeli exports to Jordan amounted to $49.5 million in 2020 compared with $500,000 in 1995. Jordan exported to Israel $224m worth of goods compared with $1.8m in 1995.

The figures represent only 2 per cent of Jordan’s $9.7 billion in exports in 2020 and less than 1 per cent of Israeli exports, which totalled $50.8bn that year.