Magazine:	Trade & Culture Magazine
Issue:		March/April 1995
Title:		Israel/Jordan: THE PURPOSE OF PEACE IS COMMERCE
Author:	Jonathan Ferziger

After decades of enmity, the financial centers of Israel and Jordan are doing business 
together, and the two governments are eagerly courting investors to develop a joint 
“Valley of Peace” in the desert between the Dead Sea and Red Sea. Despite long-term 
potential, newcomers to the region should tread carefully--taking account of gaping 
differences between the two countries in language, style, religion, and standard of 
living. 

Some 3,500 years ago, a desert-weary Moses climbed to the top of craggy Mount 
Nebo, caught his only glimpse of the Promised Land, and dropped dead on the spot.
	The view from Nebo, which sits on the western edge of modern-day Jordan,
 hasn’t changed very much since it was first described in the Book of Deuteronomy. 
The valley below remains a barren wilderness bordering the Dead Sea, the lowest point 
on earth. Bedouin tribesmen still herd goats in the Judean Hills and the palm trees of 
Jericho contribute a traditional oasis of green in the distance. Every once in a while, 
however, an Israeli F-16 fighter-jet shoots through the sky on a training flight.
	In recent decades, this was the dividing line between the modern nations of 
Israel and Jordan, between the Jewish state and the Arab world. Foreign businesspeople 
interested in the region had to make a clear choice between Israel--tiny, but lively and 
entrepreneurial--and the Arab megamarket, spanning 22 countries, and crowned by the 
oil-rich states of the Persian Gulf. A pan-Arab economic boycott, enforced since 1948, 
sought to ensure Israel’s isolation.
	Now, with the peace treaty signed by King Hussein and Prime Minister Yitzhak 
Rabin last October, the parched Syrian-African Rift is being transformed from an 
intimidating barrier between hostile societies into a fertile cultural and commercial 
bridge. Not only are the financial centers of Tel Aviv and Amman doing business 
together, but the two governments are eagerly courting investors to develop a joint 
“Valley of Peace” in the stretch of desert that connects the Dead Sea and Red Sea. The 
project, which envisions five-star hotels, posh mud-bath spas, and an “underwater 
park,” is planned as a spearhead to the regional economic integration preached by the 
Israeli foreign minister, Shimon Peres; a grand plan to build a new Middle East.
	In the short term, foreigners looking for new business opportunities would do 
well to tread carefully here. For the last half century, the entire 250-mile border 
between Israel and Jordan has been one long minefield. Even with the historic peace 
agreement, there remain gaping differences in language, style, religion, and standard of 
living--all of which constitute potentially explosive barriers between the two societies. 
Complicating the stew are the Palestinians, a people caught in the divide. Although 
they dominate Jordan’s business sector, they are uneasy that King Hussein has 
reconciled with Israel even as the Jewish state continues to occupy much of the West 
Bank, as well as the Gaza Strip and East Jerusalem.
	Nevertheless, as both Israel and Jordan emerge from long periods of economic 
isolation, they are making determined efforts to cater to international investors. 
Prodded by the US and other trading partners, the two countries are hacking away at 
Customs barriers and bureaucratic red tape, with varying degrees of success. Early this 
year, Israel eliminated protective tariffs on virtually all American goods, unleashing 
everything from Chevy vans and GE refrigerators to cellular telephones and kosher 
pastrami on the consumer-goods-crazed Israeli market. Somewhat more modestly, 
Jordan is trying to woo new business by directing foreigners to a one-stop investment 
center run by its Ministry of Industry and Trade--an effort to shortcut the maze of 
government agencies that has tended to drive away all but the most determined 
outsiders. “People want stability,” explains Barry Friedman, the US Embassy’s 
economic counselor in Tel Aviv. “Nobody from outside was going to invest real money 
in this region when things were so damned unstable. Now, we’re starting to make some 
progress. As Thomas Jefferson said, ‘The purpose of peace is commerce.’”
	Even during the long years of their formal state of war, from 1948 to 1994, 
Israel and Jordan always had much in common. Both are tiny. Israel, with 5.4 million 
people, is about the size of New Jersey. Jordan has a population of only 4.2 million 
and it is not much bigger than Indiana. In both countries, much of the land is desert 
unsuitable for agriculture. Both countries were ruled by the Ottoman Turks for 
centuries before coming under British control in 1917. They won independence within 
two years of each other, after World War II. Their capital cities, Amman and 
Jerusalem, share virtually the climate and nearly universal building material, a native 
stone known as Jerusalem or Hebron stone. Both countries mine the Dead Sea for 
phosphates, and draw tourists to beaches in the far south, on the Red Sea. On both 
sides of the border, falafel is the national snack food, although fast-food burgers are 
catching up.
	So much for the similarities. The differences are much more apparent. In mood, 
style, religion, and business style, Israel and Jordan are worlds apart. Integration will 
not come easily, partly because of the historical animosities, and partly because the 
playing field is hardly even. Israel’s US$76 billion economy Gross Domestic Product 
in 1994 was some 15 times the size of that of its neighbor across the river. Its US$25 
billion in exports last year dwarfed the US$1.4 billion exported by the Hashemite 
Kingdom. While some Jordanians see great prospects in teaming up with Israel to 
develop trade--and have actually started to cement alliances--others view their former 
enemy as a voracious economic engine with whom they have little chance to compete. 
Says Gahith Shocair, corporate-finance manager for the Arab Banking Corp. in 
Amman, “It might help for the really serious businessman to do a little homework 
before coming out here.”

ISRAEL: A UNIQUE EMOTIONAL PULL

Israel exerts a unique emotional pull on virtually every visitor, whether Christian, Jew, 
or Moslem. It is impossible to escape the biblical and Koranic echoes that resound 
wherever one steps. Go shopping in the desert city of Beersheba and a salesclerk tells 
you that this mall was built beside the well that Abraham fought over to water his 
flock. Visit a factory in the Galilee and discover that this plant overlooks the Basilica of 
the Annunciation in Nazareth, revered as the site where the angel Gabriel heralded the 
birth of Jesus to the Virgin Mary. Wander past the shopkeepers in Jerusalem’s Old City 
souk, and you’ll find yourself standing in front of the Dome of the Rock, where the 
Koran tells of Mohammed’s horse-drawn journey to heaven.
	If the country comes alive with legends from the past, it is also a modern-day 
fairy tale. Israel is built on legends of military heroism that enabled the Jewish state to 
beat its collected Arab neighbors in five separate wars. These same Zionist pioneers 
also developed revolutionary new agricultural techniques, such as “drip irrigation,” that 
have allowed them to “make the desert bloom”--at least in parts.
	Though largely secular-minded, Israelis like to believe that their very existence 
as a nation is a divine miracle, an epic story stretching from the parting of the Red Sea 
to the Six-Day War. But they have also taken to heart the lessons of the Holocaust, in 
which six million Eastern European Jews were exterminated by the Nazis. Their 
experience with genocide has bred a culture that rests both on determined self-reliance 
and constant fear of extermination. Israelis are proud of the oasis they have built in the 
midst of the Third World, but they remember Arab vows to “push them into the sea,” 
and maintain a hair-trigger level of military preparedness. Periodic suicide bombings 
by Islamic fundamentalists tend to reinforce such fears.
	The constant threat to national survival has spawned an aggressive attitude that 
says to the rest of the world: We’re here, whether you like it or not. This brash style, 
cultivated from the cradle, takes some getting used to. When my wife and I were 
looking into day-care for our infant son, we learned that one of Jerusalem’s most 
popular pre-kindergartens was just down the block. There, we questioned the director 
on her approach to handling one-year-olds. “They learn to play. They learn to fight,” 
she told us. “They learn to get what they want.” She sounded more like my high-
school wrestling coach. We looked elsewhere.

THE MILITARY INFLUENCE

	To understand Israel, you have to grasp the influence of the military. Both men 
and women are drafted at 18, but men are called to the reserves for up to 45 days every 
year--until the age of 55. This means that key business deals can often be delayed more 
than a month because the senior vice-president you’ve been negotiating with is out 
patrolling the Lebanese border.
	While renowned for its high motivation and fighting ability, the Israeli army’s 
notion of discipline would give a West Point drill sergeant the hives. Soldiers tend to 
call commanding officers by their first names, and male reservists often sport ponytails 
and stud earrings. Fraternization between the sexes is actually encouraged. In the 
Jewish state, the army has turned into the national matchmaker.
	In many ways, Israel’s business culture draws from the relative casualness and 
intimacy of the army--as well as its rudeness and chutzpah, or daring. Another 
influence has been the kibbutzim, the collective agricultural settlements that were key 
building blocks of the state. The emphasis on socialist comradeship in the kibbutz was a 
deliberate break from the formal, hierarchical ways left behind in Europe. In many 
ways, Israel, with its sandal-wearing, tieless executives, was the precursor to the laid-
back style of California’s Silicon Valley. More recently, however, as Israeli companies 
have started to look outward and grasp for a role in the global economy, Israelis have 
begun to adopt the more buttoned-down ways of Wall Street. “Americans used to come 
to Israel and wear a tie to a banking meeting and the [Israeli] bankers used to come 
with an open-necked shirt,” says Leon Koffler, a transplanted Canadian who has built a 
profitable chain of drugstores under the name Super-Pharm. “Today, because they’ve 
heard about the Israelis, the foreigners come in open-necked shirts--and the Israeli 
bankers show up in ties.”
	Israeli’s business world is firmly rooted in Tel Aviv, together with its sprawling 
suburbs where close to one-third of the population now lives. The city, which sits on 
the Mediterranean seashore alongside the ancient Arab port of Jaffa, is the symbol of 
the new Israel, crafted by European Jews who immigrated in the 1920s. Remains of the 
Utopian, egalitarian society they sought to construct are evident in the Bauhaus office 
buildings and international-style housing blocks, now gray with soot and pockmarked 
with peeling plaster. High-rises like the IBM Building and Shalom Tower can be seen 
from miles away, but Tel Aviv’s skyline is predominantly low-slung and decidedly 
honky-tonk.
	Billed as “the city that never stops,” Tel Aviv does, indeed, have the most 
active nightlife in the Middle East, boasting dozens of movie houses, theaters, 
museums, and a new opera house. New restaurants appear and shut down by the 
month. Japanese, Thai, Mexican (along with various eclectic nouvelle cuisines) are 
current trends. Life is closely anchored to the beach. Office workers, lawyers, and 
even ambassadors on seaside Hayarkon Street often extend their lunch breaks to take a 
dip in the Mediterranean surf. Particularly in the northern suburbs, where the houses of 
the political and business elite are framed by backyard tennis courts and swimming 
pools, the lifestyle comes surprisingly close to that of southern California.

“THE APPROACH IS, ‘LET’S DO BUSINESS.’”

	In the boardroom, too, Israel is not as much of a cultural stretch for Americans 
as its neighbors are. While Hebrew is the national tongue, virtually anyone involved in 
foreign business speaks English well enough to be understood. Outside of a few well-
marked areas--where traffic is barred on the Sabbath and violators risk being stoned--
Israel is a boldly libertarian society that often shocks visitors with its embrace of 
Western ways.
	Striking up a business relationship is usually a straightforward process, with no 
prescribed courting behavior. “There are very few formalities, sometimes you won’t 
even get coffee,” says David Rosenberg, American-born research director of Pacific-
Mediterranean Investments. “There’s very little posturing. Israelis like answers 
quickly. The approach is, ‘Let’s do business.’”
	Maintaining a relationship--and achieving success--can, however, depend on a 
lot of “proteksia,” or knowing the right people. Many top firms are headed by former 
generals or ranking army officers. In Israel, army connections count for so much that a 
business school is being set up in the north specifically devoted to turning retired career 
officers into business executives.
	Despite continual rumblings from Palestinian extremists, the peace process has 
enabled Israel to recover much of its international footing. Since the 1991 peace 
conference in Madrid, Israel has established diplomatic ties with no fewer than 58 
countries, many of which had broken relations in 1967, when Israel doubled its size 
with territory captured in the Six-Day War.
	Although the peace is still a patchwork--until Syria and others sign on the 
bottom line--doors have already opened for Israel around the world. Israeli 
businessmen are not waiting for Syria to give the thumbs-up before making bold moves 
into new markets. “If they [the Syrians] want to make peace, fine. If not, so be it,” 
says Stef Wertheimer, chairman of Iscar Corp. Wertheimer, who built his Tefen 
Industrial Park just 10 miles south of the Lebanese border, has plans on the shelf for a 
twin facility across that frontier. “I’d be happy to be a partner. I think they’ll gain 
[make money] from it,” he says. 
	Last year, Wertheimer’s precision-metal-cutting tool company did US$237 
million worth of business--12% of the entire world market. In many ways, 
Wertheimer, 67, embodies the classic qualities of the Israeli--ingenuity, informality, 
and no small measure of cockiness. While he is often portrayed as the biblical patriarch 
of Israel’s booming high-tech sector--nursing young start-ups in an incubator 
environment--Wertheimer’s company does 97% of its business outside Israel, a formula 
he recommends: “If somebody wants to start a serious business here and thinks he can 
live off the local market, I tell him, ‘Forget it, it’s too small.’ If he thinks he can make 
money quick, I say, ‘Drop it.’ Take your time, build your reputation. Know the 
people. Know their habits. Always start small, and build.” As he speaks, Wertheimer 
sits in his ultra-modern glass-and-steel office on a Galilee hilltop that overlooks 
traditional Arab villages, olive groves, and grazing sheep.
	When Wertheimer served in the Palmach underground in the 1940s as a 
demolitions expert, his commanding officer was a young man named Yitzhak Rabin. 
Today, Wertheimer maintains a close relationship with Rabin, now prime minister. He 
was even invited to Oslo last year to watch his friend receive the Nobel Peace Prize. 
Wertheimer says it is only a matter of time before the Arabs accept Israel fully 
because, “People get tired of war after 50 years. It’s only a time problem, a matter of 
haggling. Both sides have no other solution.”

AN END TO ISOLATION

	Last October, Wertheimer was among those invited to the Middle East-North 
Africa Economic Summit in Casablanca, a turning point for the region. Not only was 
Israel included for the first time in a predominantly Arab conclave, but its business 
leaders were assiduously courted by former enemies. Company presidents in Tel Aviv 
like to show off the business cards they collected from new acquaintances in Bahrain, 
Oman, and Kuwait--and other trading centers that have yet to make official peace with 
the Jewish state.
	Although the multinational oil companies have yet to set up filling stations or 
regional offices here, global fast-food wars have found a new battlefield. In the past 
year, McDonald’s has anchored itself in Tel Aviv, and Burger King took Jerusalem by 
storm with its first kosher franchise in the world (sorry, no cheeseburgers). Now, 
Kentucky Fried Chicken officials are stalking suburban malls in the country’s heavily 
populated center.
	For years, Pepsi-Cola dominated the Arab Middle East, leaving Coca-Cola to 
ply the small Israeli market. Now Coke has been admitted to Jordan, Egypt, and even 
Saudi Arabia, but Pepsi has stumbled in its initial foray into Israel. Its first billboard 
campaign offended the key ultra-Orthodox consumer market by showing the evolution 
of a chimp into a Pepsi-drinking teenager.

	Overall, Israelis feel they didn’t lose much as a result of the Arabs’ boycott on 
direct trade. It was the secondary sanctions that stung--letting companies around the 
world know that they had to choose between business in the Arab market of 300 
million consumers and Israel’s market of 5 million. Similarly, Israeli concerns don’t 
expect a bonanza from new trade with their immediate neighbors. More important is 
the barrier that has been broken with Japan, China, India, and other major foreign 
markets that no longer fear doing business with Israel. 

	For its part, Israel has moved beyond its traditional citrus exports and focused
on high-tech. “Because of the boycott, Israel was forced to develop in a distorted way 
that now turns out to have been for the best,” says Friedman of the US Embassy. 
“Rather than continue on the orange and dates route, they started selling software.”
	Apart from political factors, international businesses have been put off, in the 
past, by Israel’s largely state-owned economy, riddled with socialist-inspired labor 
regulations. These days, the legacy of the kibbutz has been considerably diluted. While 
many kibbutzim have succeeded in reconciling modern industrial production with their 
traditional socialist-inspired values, the movement as a whole has been forced to 
reassess its principles of collectivity in face of a dire financial crisis. Nearly all 
kibbutzim maintain an agricultural base but the most successful ones have developed 
their own industrial subsidiaries--including a large plastics factory at Kibbutz Neot 
Mordechai, a thoroughly non-kosher shrimp farm at Kibbutz Maagan Michael, and the 
Epilady line of woman’s depilatory services at Kibbutz Hagoshrim.
	For a tiny country, Israel has an amazing appetite for American products. While 
it ranks 23rd among foreign markets for the US, Israelis, per capita, are the third-
largest consumers of US goods in the world, after Canada and the United Kingdom. 
Meanwhile, the US is Israel’s largest single trading partner; two-way trade between the 
two countries totaled US$8.94 billion in 1993. That year, the US was one of the only 
countries in the world with which Israel enjoyed a trade surplus, amounting to US$110 
million.
	Overall, Israel did US$52.39 billion in foreign trade in 1993, racking up a trade 
deficit of US$8.12 billion, about 90% of which is with Europe. One of Jordan’s goals 
is to siphon off some of Israel’s imports from Europe. Amman economists make the 
case their country can supply many agricultural--and some manufactured--products 
Israel now imports from Germany, France, and Italy, at a fraction of the price.
	Israel is also unique in maintaining free-trade agreements with both the US and 
the European Union, a status that carries considerable potential but has been hamstrung 
by government bureaucracy, strict labor laws, and other factors that have made it 
difficult to attract foreign investment (such as wars and terrorist attacks.) 
	The trade agreements have, however, been a major selling point in the 
development of a free-export processing zone outside Beersheba, approved last year by 
the Knesset (Israel’s parliament) over strong opposition from powerful labor unions. In 
the zone, on which construction is slated to begin this year, foreign-held businesses will 
operate free from corporate taxes, value-added taxes, and duties on imports and 
exports. They will, however, have to pay a flat tax of 15% on distributed profits.
	Until recently, Israel’s state-owned military-industrial sector was the country’s 
chief earner of foreign exchange. Military contractors from around the world flocked to 
Israel because of its massive defense spending, assisted by the US$1.8 billion in annual 
aid it receives from the Pentagon. Now, the country is also seen as a fertile 
environment for civilian research and development, with recognized expertise in the 
medical/pharmaceutical, agriculture, and biotechnology sectors.
	Fueled in part by the influx of some 500,000 Russian immigrants over the past 
six years, IBM, Microsoft, Digital, and Intel are among the global giants who have set 
up major software installations. Tales abound of astrophysicists who were swabbing 
toilets as janitors on arrival, and have since been recruited in leading labs such as the 
Weizmann and Technion institutes. 
	Optimism about the long-term prospects for such ventures has grown with every 
sign of progress in the peace process. For most of the last half century, Israel has lived 
in a state of virtual siege, separated by barbed wire and minefields from its closest 
neighbors. Now Israelis can go down to the Red Sea resort of Eilat, cross the Egyptian 
border for a night of gambling, or spend a day in Jordan hiking through the ancient 
ruins of Petra. In the rapidly changing Middle East, Israel stands at a threshold it had 
only dreamed of in the past.

JORDAN: THE FIRST REGIONAL CROSSROADS

In Jordan, time tends to be measured by a series of intervals between disasters. Blessed 
with few natural resources--phosphates for fertilizers, not the crude oil beneath their 
Gulf neighbors--Jordanians have developed a rueful, self-effacing sense of humor. 
Most often, this is evident only among close friends, sitting around the table after 
dinner, rummaging through parliamentary politics and palace gossip. Lately, however,
many inside jokes have been brought into the open by Nabil & Hisham, a pair of 
comedians who perform a biting, often bawdy, satirical revue that takes special 
pleasure in puncturing the Middle East peace process.

	These days, their opening sketch has one of the first Israeli tourists asking a 
Jordanian taxi driver if he can pay for the ride in shekels, Israel’s currency.
	“Shekels?” the driver screams. “We are Jordanians. We take only dollars.”
	Middle East monarchs are not famous for their sense of humor--and certainly 
not for allowing others to laugh at them. But Nabil Sawalha, the taller and zanier of the 
pair, will never forget the dignified chortle King Hussein let loose when he sat in a 
converted cinema on Amman’s Rainbow Street and watched himself lampooned on 
stage.
	“Contrary to what people think, we Arabs do have the capacity to laugh at 
ourselves,” says Sawalha, taking off his Yitzhak Rabin makeup backstage after a new 
English-language version of his show for a packed 500-seat house. Both comedians are 
in their fifties, and they are working on an act they hope to take to Tel Aviv.

	Welcome to Amman in the era of peace. Slowly but surely, Jordan is opening 
up to outsiders--and revealing a society that is an island of tolerance in a fairly uptight 
region. While keenly aware of what they lack--money, for instance--Jordanians are 
eager to cultivate the dividends of the peace process, presenting their country as an 
excellent platform for foreign businesses to base themselves for plying the rest of the 
Arab world. Finally at peace with Israel, Jordan has become the first true crossroads of 
the Middle East. “[Jordan] is not the place to be, but it’s the place to go from to reach 
the places you want to get to,” says Riad al Khouri, an economic consultant who lives 
in both the Jordan capital and Beirut. “There’s a lot more business in Syria, Iraq, and 
Lebanon--but for various reasons it’s not such a good idea to be based in those places.”
	By contrast, Amman is a stable environment, a clean and polite city where 
international executives may not run into the hottest nightlife, but will find a safe, calm 
atmosphere to work and raise a family. The cost of living is low, and the labor force is 
both cheap and well-skilled.
	Setting up shop in Amman and making those initial contacts with Jordanians are 
not difficult processes. But since many of the customs of traditional Arab society 
prevail, it’s best to learn your way around them. 
	Respect for authority, particularly for the king and royal family, is expected, 
even if Nabil & Hisham have tested the limits of the palace’s tolerance. Islam, 
practiced by 93% of the local population, is a subject that most people take seriously. 
Careless or crass remarks are not appreciated. While Jordanians enjoy discussing their 
elaborate fasting and feasting rituals during the Ramadan holy month, questioning the 
king’s Muslim piety is likely to generate an embarrassing silence. “Jordan can throw 
you off because it looks like a Western society,” counsels Shocair, a privatization 
specialist at Arab Banking Corp. who studied at the University of Texas. “You have to 
remind yourself that this is the Middle East. Royalty and tribalism run very deep here 
and people revere the king.”
	As a reporter, I got my first taste of Jordanians’ sincere reverence for their 59-
year-old monarch on my first visit to the kingdom, three years ago. King Hussein had 
just returned from cancer surgery at the Mayo Clinic in Rochester, Minnesota. After 
piloting his royal jet by himself on the final leg home, Hussein was greeted by a truly 
astonishing national embrace: One million countrymen poured into the streets of 
Amman to greet his motorcade--nearly a quarter of the entire country’s population. 
Despite the fact Hussein has been subject to more than his share of assassination plots 
during 40 years on the throne, the diminutive king got out of his limousine and sat 
beaming on the hood, as his subjects reached forward to touch him and shake his hand. 
All along the route to the capital, Bedouin sheikhs erected tents where they slaughtered 
camels and sheep in gratitude to God for the leader’s safe return.

“WE NEVER COME TO THE POINT.”
	Disemboweled animals aside, Bedouin desert culture is embedded in the 
Jordanian national psyche. Dark, roasted, sugary Bedouin coffee is a must to start off 
business meetings, and the tradition of lavish hospitality to strangers is strictly 
observed. Whereas Westerners tend to get down to business immediately, relationships 
in Jordan generally need to be nurtured. They don’t really get off the ground until 
you’ve been invited to somebody’s house, eaten a seven-course meal, and accepted the 
third dessert.
	“We never come to the point,” says a half-serious Munib Toukan, formerly the 
king’s press secretary and now director of public relations for Royal Jordanian Airlines. 
“We like to waste time and talk and eat and drink coffee and chat all night.” The 
reluctance of Jordanians (and other Arabs) to mention business, much less negotiate a 
deal, during an initial meeting is often frustrating to newcomers. Explains Israeli Sara 
Cohen, director of sales and marketing at the Hyatt Regency Jerusalem, “What’s very 
strange is that your meeting finishes, and you have not finalized anything--including 
even a discussion of your business objective. But that doesn’t mean that they don’t 
know in their head what you are talking about.” Cohen adds that while a typical 
American business visitor will book a hotel room for only two days--and fill them with 
lots of straight-to-the-point-business appointments--Jordanian business travelers usually 
book themselves in for a week of much longer, far more indirect introductory sessions.
	On the subject of Arab males’ well-known penchant for kissing one another on 
the cheek, Toukan cautions, “Most of us know that Western men are not comfortable 
with kissing, but you should try to tolerate getting hugged every once in a while.” 

	Jordan’s culture, as a special nation, is marked by a degree of modesty, an 
understanding that the kingdom lacks the material wealth of its neighbors, yet has 
survived serial traumas--the latest of which was the harsh reaction to its soft attitude 
toward Iraq during the Gulf War. Hussein paid for his mistake in spades, seeing all aid 
cut off from his former patrons in Kuwait and Saudi Arabia, while becoming the target 
of US-led sanctions that virtually shut down the country’s lucrative shipping business 
through its only port, Aqaba. 
	In effect, the Gulf War was a purging process for Hussein, propelling Jordan 
into the waiting arms of the West. The price was a breakthrough in the peace process. 
The king, who now admits he secretly met with Rabin at least 21 times since 1967, 
paid it willingly. In exchange, the Clinton administration promised to write off more 
than US$700 million in debt, and to promote the idea of US firms doing business in 
Jordan.
	Initial talk about “peace dividends” ballooned expectations that are only now 
settling down to earth, as limitations become clear. “We are being promised the honey, 
but nothing has been delivered,” complains Mazen Darwazeh, general manager of Arab 
Medical Containers Co., a division of Hikma Pharmaceuticals Co. “If nothing 
materializes very soon in this country, we will have chaos. . . Now I think we need to 
start having things develop.” Darwazeh, whose family--like a majority of Jordanians--is 
of Palestinian origin, is deeply skeptical about peace, and concerned that Jordan may be 
isolating itself from the Arab world. “The West Bank and Israel will not constitute 
more than 5% to 10% of our market, while 90% will be in Syria, Iraq, and Saudi 
Arabia.”

AN ECONOMIC TRANSFORMATION

	Ironically, the latest influx of Palestinian refugees--deported by Kuwait en 
masse--has produced an economic boom in Jordan. In much the same way that highly 
educated Russians are fueling R&D in Israel, Palestinians who returned from Kuwait 
have brought a formidable array of managerial, merchandising, and technical skills. 
Between 1992 and 1993, the kingdom’s GDP soared by an unprecedented 11% to US$5 
billion, propelled by the massive investment in housing starts and other ventures made 
by returnees from the Gulf.
	Amman has been transformed by the Gulf story, undergoing a burst of both 
office and residential construction that has created new neighborhoods such as Abdoun, 
home of the fortress-like US Embassy. Accustomed to the amenities of Kuwait City, 
the new residents have built cozy villas that sport backyard swimming pools, sculpture 
gardens, and satellite dishes on every roof. Locals refer to the new southern section as 
“Amman’s Beverly Hills.”
	Although once rosy projections about Jordan’s ability to attract foreign capital 
have been scaled back, local business leaders and foreign diplomats expect the peace-
process to fuel real growth. With the country’s traditional Dead Sea phosphates and 
potash industry having suffered US$30 million in losses in 1993, because of poor prices 
on world markets, Jordan is trying to promote computers and information technology 
as promising areas for investment. Meanwhile, the US Embassy is fighting a battle
against the widespread violation of intellectual property laws in Jordan, particularly 
computer software. Microsoft is experimenting with special discounts and other 
incentives to get universities--and even government ministries--to buy authorized 
Windows software.
	Obviously, Jordan has a long road to go before it can compete in high 
technology. Angus Blai, a Middle East analyst for Baring Securities in London, notes 
that computers are still a curiosity in the Hashemite Kingdom: “You walk into a 
company in Morocco and you see two or three people to a room, and one personal 
computer. In Oman, you see a roomful of PCs, and no people. In Amman, you find a 
roomful of people--and no PCs.”
	While trying to promote their country as a regional base for foreign companies, 
Jordanians are also hoping they can reinvigorate their tourist trade, particularly in 
cooperation with Israel. While the biblical sites of Jerusalem and the West Bank were 
lost in the 1967 war, Jordan still boasts Mount Nebo to attract Jewish and Christian 
pilgrims, as well as Ein Musa, where Moses is believed to have struck a rock and 
brought forth water. North of Amman, Jerash has some of the best-preserved Roman 
ruins in the Middle East. Queen Noor, Hussein’s Princeton-educated US-born wife, has 
initiated an annual performing arts festival there, drawing top international 
entertainment before packed audiences. Jordan’s most spectacular site, however, is 
Petra--the remains of an ancient Nabatean city built into the rose-colored hills of the 
southern desert.
	Then there’s Jordan’s potential as a beach resort. Jordanians agree that 
rejuvenating the Red Sea resort town of Aqaba is a formidable challenge. While the 
Israeli resort of Eilat, across the bay, is abuzz with construction and teaming with 
tourists, Aqaba struggles along with anemic hotel-occupancy rates. A measure of the 
city’s doldrums is that the best hotel in town is called the Holiday. It used to be the 
Holiday Inn, but standards slipped and the chain pulled out. Nevertheless, Aqaba has 
the same weather, same beach, and same magnificent coral reef as Eilat--and lower 
prices. Developers see potential.

“NO MINISTRY OF CHEESE”

	How to exploit that potential is the challenge. While making cordial contacts in 
Jordan is easy, making money is not. Al Khouri, who runs a consulting business, says 
that foreigners need help dealing with the formidable government bureaucracy. “Jordan 
is not a Yellow Pages economy,” he cautions. “You cannot get off the plane, pick up 
your ‘Jordan on Five Dollars a Day’ guidebook, figure out where the Ministry of 
Cheese is, and go sell them some cheese. This is still a Third World country, and if 
you know the right people, especially at the top, you can make a lot of money here. 
Otherwise, forget it.”
	The experience of Crown Cork & Seal Inc. of Philadelphia is instructive. 
Seeing an opportunity to corner the market not just in Jordan, but in neighboring Syria, 
Lebanon, and the West Bank, the Fortune 500 aluminum-can maker set out recently to 
build a US$34 million plant on the outskirts of Amman. The idea was to sign contracts 
with both Coke and Pepsi, and use the plant as a showcase of US-Jordan cooperation. 
Unfortunately, Crown Cork discovered that its Jordanian partner, Shaheen Business 
Investment Group, was bankrupt, and Shaheen’s banks were closing in on its soaring 
debts. Crown Cork’s plant is still under construction as Shaheen undergoes some 
restructuring, but the financial surprise sent a scare through Crown Cork and other 
foreign investors. 
	The lesson, cautions Alex McCay, Scottish-born general manager of Crown 
Cork’s project, is that Jordan needs to work on being more helpful to foreign investors, 
particularly in guiding them through the maze of poorly explained government 
regulations. “Jordan is a lovely place to live,” says McCay. “Prices are low and the 
quality of labor is excellent. But getting consistent, accurate, reliable information--this 
has been a very big problem for us.”
	While Israel and Jordan are two distinctly different markets, can the gaps be 
bridged? Can the two countries truly put aside a half-century of enmity, do business 
with each other, and team up to attract ambitious foreign investors?
	Months after the signing ceremony in the Arava desert, there are signs that they 
are at least making the effort. Early this year, textile firms from both Jordan and Israel 
held a conference together that climaxed with a joint fashion show at the Hyatt Regency 
Jerusalem. Models sashayed down the runway in garments ranging from Jordan’s 
Bedouin-inspired robes to Israeli see-through evening gowns. The conference was 
called “Weaving Peace.”
	For the international investor, hurdles remain but the growing prospects of 
genuine peace in the region make the Jordan-Israel relationship worth cultivating. “I 
don’t think it will be an easy marriage,” says Rosenberg of Israel’s Pacific-
Mediterranean Investments. “But if it makes economic sense for both sides, they will 
be able to overcome the cultural differences. The advantages are so compelling, it has 
to work.”

Jonathan Ferziger is UPI’s bureau chief in Jerusalem.

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