Thu, 10 Mar 2005

From: Reuters

Iraqi influx drives Jordan's postwar economic boom

Suleiman al-Khalidi, Reuters/Amman

Iraqi businessman Talal al-Gaaod looks out from his glass fronted office over the hills of Amman and reflects on the chaos in his homeland that has helped Jordan thrive as a safe haven for thousands of his countrymen.

And their money.

An estimated 50,000 families from Iraq are just the latest human wave to enter Jordan. This is a country whose destiny has been shaped by successive inflows of people from around the Middle East since it was founded in 1921.

"Capital is a coward in search for security. In Iraq mobs are after anybody who can afford a ransom," Gaaod said, sitting in a new five-story office block in the affluent Shemeisani neighborhood, the base of his Tabouk Group, a real estate and financial investment business.

Jordan established itself as a gateway and supply route for Iraq during two war-scarred decades prior to the 2003 U.S. lead invasion.

The latest wave of wealthy Iraqis has brought an extra $2 billion into Jordan, bankers say, driving a boom not seen since the 1991 Gulf War when hundreds of thousands of Palestinians fled Kuwait for sanctuary.

"Jordan has always been Iraq's supply route and safe haven. We realized this was the only place that was close to Iraq," said Gaaod, whose Muslim Sunni Dulaimi tribe from Iraq's Anbar region is ethnically closest to Jordan's mainly Sunni population.

The influx has fueled both a real estate boom and record sales in consumer goods, from refrigerators to perfumes to hundreds of thousands of duty free cars to Iraq.

Iraqi customers driving the latest flashy cars are the favorite big spenders in Jordan's expanding glitzy shopping malls.

The once-sleepy neighborhoods of the sprawling capital have been transformed into construction sites where cement mixers work throughout the night as new high rise apartment blocks add to the country's white quarry stone skyline.

Land registry figures show that individual Iraqis were the largest foreign property buyers last year.

And bankers say Iraqis have swollen foreign deposits in Jordanian banks.

"The reputation of Jordanian banks has encouraged Iraqis to use the system as a safe haven for their savings," said Mifleh Aqel, head of Jordan's banking association.

Safe haven Bankers say the kingdom has shown it can attract both the winners and losers of Iraq's post-war political landscape.

Once-privileged Iraqi Sunnis -- former bureaucrats, businessmen and even Saddam's own family -- sip coffee in the same hotel lobbies as opponents who lent crucial support to Washington's campaign to topple him.

"Everyone from ex-regime loyalists to members of the new administration have all taken up residence in Jordan," said Khaled Shamari, an Iraqi financial consultant.

Iraq's U.S.-backed interim Prime Minister Iyad Allawi and members of his cabinet own mansions in the same area as Saddam's daughters, Rana and Raghad, who fled to Jordan for safety after the war, estate agents say.

"Iraqis of all walks of life are buying second homes as a safety net. This equally applies to Saddam's two daughters and Iyad Allawi and his aides," said property agent Salem Hiyari.

Real estate agents say Iraqi demand has pushed up house prices by up to 50 percent since the war across all spectrums of the market, from three-bedroom flats to multi-million dollar mansions.

And international business, looking for a safe base in the Middle East, has flocked to Iraq, wedged between Israel to the west and Iraq to the east.

Jordan's once depressed hotel business is now enjoying an unprecedented boom as it becomes the preferred venue for Iraqi businessmen making deals with their Western and Arab partners.

Saleh Rifae, general manager of Zara Investment, the country's largest tourism firm, says aid-workers, businessmen and NGO's temporarily located in Jordan since before the war have boosted occupancy levels.

"The Iraqi related business has been a big plus for hotels," he added, citing the buoyant performance by five star hotels that has generated windfall gains and eased debt problems.

Red carpet treatment The spin-off effect on the economy has not been lost on Jordan's monarch who looks to welcome wealthy Iraqis ready to relocate to Jordan.

The monarch has been meeting top Iraqi businessmen at his royal palace where he listens to their list of grievances, from tough residency problems and excessive security screening.

He worries that bureaucracy could scare off Iraqi investors to rival centers in the region such as Dubai and even beyond into Europe.

On royal instructions, an Iraqi property owner can get permanent residency and border officials now give Iraqi families arriving on short visits few hassles.

But some resentment is surfacing among Jordan's five million people over rich Iraqis' display of their ostentatious wealth. "I don't know if (Jordanian) officials who give everything to Iraqis at the expense of Jordanians know that some Iraqis are now saying they own Jordan," said former deputy Ahmad Oweidi al- Abbadi.

"They are saying we bought this country with our money."


GetRTR 3.00 -- MAR 7, 2005 09:03:57