A Jordan Valley free trade and industrial zone
Despite Jordanian criticism of Prime Minister Benjamin Netanyahu’s promised extension of Israeli law over parts of Judea, Samaria and the Jordan Valley, expansion of the parameters of the Trump plan for peace and prosperity between Israel and the Palestinians to include the Hashemite Kingdom of Jordan, in a direct and significant way, could help to ensure the plan’s success.
Specifically, the creation of a Jordan Valley free trade and industrial zone (JV-FTIZ), straddling both sides of the Jordan River while servicing Israel, the Palestinians and Jordan, would make for a win-win situation for all involved, including the United States.
The Trump plan has been presented precisely at a time when the US finds itself in need of reducing its dependence on imports from China, and Jordan is well suited for industrial expansion precisely in areas of industry that can offset Chinese imports. Commercial coordination between Israel and Jordan within the context of the Trump plan would go a long way to improving Jordan’s economic strength, as the need for growth and development is great.
Unofficial estimates put the country’s unemployment rate at 30% and extreme poverty levels at 15-20%. These figures don’t include the hundreds of thousands of Syrian refugees who have flooded the country over the past years of the Syrian civil war, putting a huge drain on Jordan’s economy.
Jordan is ranked among the top 10 countries as an “outsourcing destination” and among the top 10 for launching a start-up company. It has an educated and entrepreneurial sector that is eager for growth, and the country’s connectivity is excellent. Israel brings to the table experience and, most importantly, know-how. Its innovative base has made it the Start-Up Nation and an economic powerhouse.
The free trade agreement that Jordan already has in place with the US since 2001 positions it well for such a megaproject. Merging Israeli technological advantages with Jordanian and Palestinian manufacturing capabilities is bound to help make the Trump vision, Peace to Prosperity, a reality.
Take, for example, textile manufacturing, which presently employs 25% of Jordan’s workforce and represents 21% of its exports. Jordan exports $1.7 billion in textiles with $1b. going to the US, while textile imports from China to the US stand at $35b. per annum. An additional $27b. is imported from China in games and sports equipment, with another $19b. spent on plastic products. This amounts to $76b. a year in imports of goods that already have effective production lines in Jordan. There are presently about 77,000 workers in 85 large textile producing factories and another 20,000 in small local companies. Doubling this number, together with new and advanced state-of-the art manufacturing equipment would more than double the output, growing the textile industry to $3b.-$4b. Another good example is the pharmaceutical industry. The huge dependency of the US on China for pharmaceutical products has garnered a lot of attention due to the COVID-19 crisis, and Jordan also has a strong pharmaceutical sector that is ripe for significant growth. China accounts for 95% of US imports of ibuprofen, 91% of hydrocortisone, 70% of acetaminophen, 40% to 45% of penicillin, 40% of heparin, and 90% of vitamin C. In all, 80% of the US supply of antibiotics is made in China. Cooperation and expansion of Israel’s and Jordan’s pharmaceutical sectors can draw this critical area of US imports away from China to more dependable ground.
Processed fruits and vegetables is another area bursting with potential. The US spends $1.2b. a year on processed fruit and vegetable imports from China, $400 million on natural fruit drinks (70% of total fruit juice imports), $222m. on fruitbased snacks, $167m. on spices, and $160m. on fresh vegetables. Israel’s precision agriculture would go far in augmenting the low-level agro-industry in Jordan (agriculture used to constitute a full 40% of Jordan’s GDP; today that number stands at a mere 2%). Growth of the processing industry would be a boon to smalland medium-sized farms, as the demand for their products would grow exponentially, creating more employment opportunities outside of the industrial zone itself.
Lastly, raw material for fertilizers and fertilizer production is an industry that can enjoy dramatic expansion as the fourth-largest supplier of fertilizer to the US is China, in the amount of $2.5b. per annum, and Jordan’s second-largest export is potash and phosphates used in the production of fertilizer.
AN AREA opposite the Fetzael junction would be superb location for the project. It encompasses 2,600 hectares of land on Israel’s side of the Jordan River and 16,000 on the Jordanian side (over 4,000 hectares). This would allow for 300-400 factories with a potential employment capacity of 250,000.
The JV-FTIZ would also serve as the regional nerve center and logistical hub for the existing small qualified industrial zones in Jordan, as well as for new industrial areas that could be built in Judea, Samaria and the Sha’ar Hayarden project in the northern Jordan Valley. (The Sha’ar Hayarden project, already under way, also straddles the Jordan River, but is much smaller in scope. It is planned for manufacturing plants on the Jordanian side, employing 10,000 laborers, and another 3,000 on the Israeli side.)
Modern roadways need to be added to the equation. Transportation contiguity would allow for the unimpeded flow of goods between the JV-FTIZ and the seaports of Aqaba, Ashdod and Haifa, and the land ports in Israel, Jordan and the Palestinian Authority. Two bridges over the Jordan, one on the northern end and one on the southern tip of the zone, could connect the Israeli and Jordanian sides.
The only people that wouldn’t benefit from a project of this scale are the many architects of previous plans for the region that brought neither peace nor prosperity. Thankfully, President Donald Trump is not among them.
The writer is a scholar at the Kohelet Policy Forum and heads the international department of the Shiloh Forum. He has served in a number of government positions, and as an adviser to Benjamin Netanyahu and Ariel Sharon. His book John Locke’s Political Theory and the Hebrew Bible was recently published by Cambridge University Press.