NEWS ANALYSIS : Loyalty to Iraq Puts Jordan in Political Plight

AMMAN, Jordan —  With Jordan facing bleak times in the current Middle East crisis, officials and observers are having second thoughts about the wisdom of its apparent backing for Iraq and the invasion of Kuwait.

Jordan finds itself treated with hostility by neighboring Saudi Arabia and other oil-producing countries of the Persian Gulf. The United States and Europe are pressuring Jordan’s leader, King Hussein, to apply U.N.-authorized economic sanctions against the Iraqi government of Saddam Hussein.

Uncertainty alone has hurt Jordan’s already shaky economy. Jordanians have made runs on the banks, trying to get their hands on foreign currency, and are stripping grocery store shelves bare of food staples.

No matter which way King Hussein looks there are pitfalls. The distress has forced him to attempt almost impossible political acrobatics to try to please Iraq, its Arab opponents and the West, with which the king has long identified.

“The problem is, we are dependent on almost everybody,” said a former top government official who asked that his name not be published.

How and whether to implement the U.N. trade embargo against Iraq is a dilemma for Jordan. Iraq is a major trading partner and supplies 60% of Jordan’s oil. Some of the Iraqi oil is in lieu of debt payments. About 200 Jordanian manufacturing companies do business with Iraq, and the port of Aqaba handles Iraqi shipments.

King Hussein has waffled on the sanctions issue. He has said the matter is under study. His foreign minister, Marwan Kassem, told reporters that the embargo will be enforced, but reporters last week saw trucks full of food, construction material and even a flatbed truck carrying cars crossing the border into Iraq.

Government officials say Jordan is trying to reach a compromise with Washington over the sanctions. Under the proposal, Jordan would continue its bilateral trade with Iraq but would not allow transit for Iraqi products to the port of Aqaba.

It is not yet clear how the West would react to such half-steps. In any case, Jordan wants to be seen as satisfying the U.N. resolution in order to avoid having Jordan itself become a target of a blockade.

In Cairo on Friday, King Hussein expressed “reservations” about the Arab League resolution recommending that Arab troops be sent to Saudi Arabia and implicitly supporting other international steps to contain Iraq’s Hussein and end the occupation of Kuwait. King Hussein’s stand extended his marathon display of fence-sitting and pleased almost none of his neighbors.

Saudi Arabia’s King Fahd refused to meet privately in Cairo with King Hussein, who was invited to hold talks only with Egypt, Iraq and the Palestine Liberation Organization.

Government officials here say that the Jordanian monarch was especially miffed at King Fahd and struck back with a touch of electronic retaliation: He permitted a report to air on government television accusing Saudi Arabia of letting Israeli soldiers join the American force against Iraq. The story is certain to inflame anti-Saudi passions in Jordan.

The hostility of the oil-producing nations is potentially crippling to Jordan. Hundreds of thousands of Jordanians and Palestinian citizens of Jordan work in those wealthy states and send home checks that help buttress Jordan’s feeble economy. Saudi Arabia and the oil sheikdoms also donate hundreds of millions of dollars in important foreign exchange.

“If Saddam Hussein fails, we stand to lose. These countries definitely believe we are on Iraq’s side. What if they send all our citizens back here?” asked a veteran member of Parliament.

Even if Iraq’s Hussein succeeds in consolidating his takeover of Kuwait, there will be many uncertainties. Already, Jordanians’ checks sent home from Kuwait are worth little because the Kuwaiti currency has been devalued and merged into Iraq’s currency.

There is some question as to whether Iraq will continue to employ Jordanians in Kuwait since Iraq itself suffers massive unemployment.

“About $300 million in remittances a year could disappear,” one economist estimated.

Although some politicians are beginning to whisper that maybe King Hussein made a political mistake, others note that he is riding a wave of public opinion that is decidely pro-Iraq. “I can’t remember when people of all political persuasions spoke so highly of the king,” said a political observer.

He added that King Hussein may need this popularity to survive the hard times around the corner.