What If Amman Developed Different Economic Strategies?

The Actual History

Amman, the capital and largest city of Jordan, has followed a distinctive economic development path shaped by regional geopolitics, resource limitations, and political decisions. The modern city's economic evolution can be traced through several key phases, beginning with its establishment as the capital of the Emirate of Transjordan under British mandate in 1921.

Unlike many of its oil-rich neighbors, Jordan has consistently faced resource scarcity, particularly water shortages and minimal petroleum reserves. This fundamental constraint has shaped Amman's economic trajectory from the outset. Following Jordan's independence in 1946, Amman's development accelerated, but political instability in the region repeatedly disrupted economic planning. The 1948 Arab-Israeli War resulted in a significant influx of Palestinian refugees, suddenly expanding Amman's population and creating urgent infrastructure and employment challenges.

King Hussein's reign (1952-1999) saw attempts to modernize the economy, but regional conflicts continued to impact development. The 1967 Six-Day War brought another wave of refugees, while the 1970 Black September conflict between Palestinian militants and Jordanian forces created additional economic disruption. Despite these challenges, the 1970s witnessed relative prosperity as Jordan benefited from the regional oil boom through remittances from Jordanians working in Gulf states and increased aid from oil-rich neighbors.

The 1980s brought economic hardship as oil prices fell, reducing remittances and aid. By 1989, Jordan faced a severe debt crisis, forcing it to implement an International Monetary Fund (IMF) structural adjustment program. This period marked a pivotal shift toward economic liberalization, privatization, and integration with global markets. The 1990s further complicated economic planning when Jordan's diplomatic position during the Gulf War resulted in the return of approximately 300,000 Jordanians from Kuwait and other Gulf states, creating massive unemployment.

Under King Abdullah II (1999-present), Amman's economic strategy has focused on several key pillars:

Service Sector Development: Positioning Amman as a regional center for healthcare, education, and financial services.
Tourism Promotion: Leveraging Jordan's historical sites, including nearby Petra and Jerash, to build a tourism industry.
Information Technology Investment: Developing Amman as an IT hub through initiatives like the King Hussein Business Park.
Free Trade Agreements: Securing agreements with the United States (2001), Europe, and Arab countries to enhance trade opportunities.
Qualifying Industrial Zones (QIZs): Creating special economic zones with preferential access to U.S. markets.

Despite these efforts, Amman's economy has continued to face significant challenges. The regional instability following the Arab Spring, the Syrian civil war (which brought over 650,000 refugees to Jordan), and periodic tensions with neighboring countries have all hampered economic growth. The COVID-19 pandemic further stressed the economy, with tourism—an increasingly important sector—virtually halting for extended periods.

By 2025, Amman remains characterized by high unemployment (especially among youth), significant economic inequality between elite neighborhoods and poorer districts, heavy dependence on foreign aid (particularly from the United States, Gulf states, and international organizations), and persistent water scarcity affecting both residential and industrial development. While the city has developed some successful niche industries, including pharmaceuticals, phosphate mining, and specialized tourism, its economy continues to struggle with limited natural resources, regional instability, and the challenge of accommodating a population significantly expanded by refugee influxes over decades.

The Point of Divergence

What if Amman had pursued fundamentally different economic strategies during the crucial period of the late 1970s and early 1980s? In this alternate timeline, we explore a scenario where Jordan's leadership, recognizing the vulnerability of dependence on remittances and foreign aid, implemented a comprehensive alternative economic development plan for its capital city.

The point of divergence occurs in 1979, when King Hussein and his economic advisors, observing the volatility of oil prices and anticipating potential regional instability, make a strategic decision to pursue economic self-sufficiency through specialized industrial development rather than following the path of service-sector focus and trade liberalization that characterized Jordan's actual economic strategy.

This divergence might have occurred through several plausible mechanisms:

First, Jordan's economic planners might have secured different international partnerships. Rather than aligning primarily with Western economic institutions like the IMF and World Bank, perhaps they formed deeper economic relationships with East Asian economies like South Korea, Taiwan, or Japan, adopting aspects of the export-oriented industrialization models that propelled these countries' development.

Alternatively, the divergence could have stemmed from different domestic political calculations. In our timeline, King Hussein balanced between tribal interests, Palestinian residents, and international partners. In this alternate scenario, he might have consolidated more centralized economic planning authority, enabling the implementation of a more cohesive long-term industrial strategy despite potential short-term political costs.

A third possibility involves an earlier recognition of water scarcity as Jordan's defining constraint. Rather than treating water limitations as a problem to be managed, Amman's planners might have repositioned water scarcity as an opportunity to develop specialized water conservation technologies and expertise that could be exported to other arid regions globally.

Finally, the divergence might have stemmed from a different assessment of regional geopolitics. Perhaps anticipating that reliance on Gulf states would become increasingly problematic, Jordan's leadership decided to pursue a more independent path, developing industries that would provide economic leverage rather than depending on aid and remittances that came with political conditions.

Regardless of the precise mechanism, this alternative path represents a fundamental reorientation of Amman's economic strategy—focusing on specialized industrial development, technological innovation in areas of national necessity (particularly water management), and building economic leverage through exports rather than the service-sector focus and liberalization that characterized Jordan's actual economic development.

Immediate Aftermath

Strategic Resource Allocation (1979-1982)

In the immediate aftermath of the strategic shift, King Hussein's government implemented several critical policy changes. Rather than awaiting IMF recommendations, the Jordanian government proactively established the Amman Economic Development Corporation (AEDC) in late 1979, a semi-autonomous body with significant authority to direct investment and coordinate economic planning.

The AEDC's first major action was reallocating foreign aid and government resources toward targeted industrial development. Unlike previous scattered investment approaches, the new strategy concentrated resources in three strategic sectors: water management technologies, specialized pharmaceuticals, and precision light manufacturing. This meant diverting funds from other potential development paths, particularly tourism infrastructure and public sector expansion that had characterized Jordan's previous approach.

By 1981, this reallocation had generated significant tension with international donors, particularly the United States, which preferred Jordan pursue more market-oriented reforms. The World Bank expressed concern about Jordan's "excessive industrial policy," while American officials questioned the sustainability of Amman's approach. In response, King Hussein made a consequential decision to seek alternative partnership sources, establishing deeper economic ties with South Korea and Taiwan, which provided technical expertise for the emerging industrial sectors.

Educational System Restructuring (1980-1984)

A critical component of the alternative strategy involved fundamentally restructuring Amman's educational system to support specialized industrial development. In 1980, the government launched the National Technical Education Initiative, establishing three specialized technical institutes in Amman focused on water engineering, pharmaceutical sciences, and precision manufacturing.

The University of Jordan underwent significant curriculum reforms, with increased emphasis on applied sciences and engineering programs directly connected to the targeted industrial sectors. This represented a departure from the previous focus on general education and humanities that had characterized Jordan's academic approach. By 1982, the government had implemented a scholarship program sending hundreds of Jordanian students to study in South Korea, Taiwan, and Japan, with the requirement they return to work in Amman's developing industrial sectors.

This educational restructuring generated significant social tension, as traditional educational elites and families accustomed to sending children abroad to study business or liberal arts resisted the new technical focus. However, the government maintained course, establishing public campaigns emphasizing the "Economic Patriotism" of pursuing technical education to support national development.

Infrastructure Development and Water Innovation (1981-1985)

Recognizing water scarcity as Jordan's fundamental constraint, the alternative strategy prioritized massive investment in water management infrastructure and technology development. In 1981, the government established the Amman Water Technology Zone, providing substantial tax incentives and research funding for companies developing water conservation, desalination, and treatment technologies.

By 1983, this focus had begun yielding results, with the development of several innovative water-recycling systems specifically designed for arid urban environments. Rather than treating water scarcity as merely a limitation, Amman's planners positioned the city as a "living laboratory" for water conservation technologies. The Jordan Valley Authority implemented new irrigation techniques that reduced agricultural water usage by nearly 30% by 1984, freeing water resources for industrial development in Amman.

This water-focused approach attracted significant interest from other water-scarce regions. By 1985, Amman had hosted the first International Arid Regions Water Management Conference, establishing the city's reputation in this specialized field and creating export opportunities for Jordanian water management expertise and technologies.

Pharmaceutical Industry Development (1982-1986)

Under the alternative economic strategy, Jordan leveraged its existing small pharmaceutical sector, transforming it into a specialized industry focused on medications particularly relevant to Middle Eastern populations and conditions. The government established the Amman Pharmaceutical Research Institute in 1982, bringing together researchers from the University of Jordan, private sector partners, and international experts.

By 1984, Jordanian pharmaceutical companies had begun developing specialized treatments for regional diseases and conditions exacerbated by arid environments. The government negotiated special intellectual property arrangements with Western pharmaceutical companies, allowing Jordanian firms to produce adapted medications for regional markets while respecting international patents.

This focus on pharmaceutical development created tensions with Israel, which had its own developing pharmaceutical industry, but also opened unexpected diplomatic channels through scientific cooperation. By 1986, Jordan had established itself as a regional leader in certain pharmaceutical niches, particularly medications adapted for extreme heat stability—a critical feature for distribution throughout the Middle East.

Regional Political Positioning (1983-1987)

The economic reorientation necessarily affected Jordan's regional political position. As Amman developed more economic self-sufficiency, King Hussein found himself with greater political maneuverability. When the Iran-Iraq War intensified in 1983, Jordan maintained a more neutral stance than in our timeline, where economic dependence on Iraq influenced its policies.

By 1985, Amman's growing industrial exports to other Arab countries had created new diplomatic leverage. The government strategically cultivated economic relationships with countries across political divides, establishing Amman as a "neutral ground" for regional business. This approach generated criticism from both Western and Arab allies who preferred clearer alignment, but enhanced Jordan's regional standing as an independent actor.

The emerging economic independence also allowed King Hussein to navigate the complex Palestinian question with less external pressure. By 1987, when the First Intifada began in Palestinian territories, Jordan maintained greater flexibility in its response than in our timeline, where economic dependence constrained policy options.

Long-term Impact

Emergence as a Water Technology Hub (1988-2000)

The most transformative long-term impact of Amman's alternative economic strategy emerged from its focus on water technologies. What began as a necessity-driven adaptation evolved into a globally significant industry cluster. By the late 1980s, Amman had established itself as what international observers called the "Silicon Valley of Water Management."

The Amman Water Technology Zone expanded substantially during this period, hosting over 200 specialized companies by 1995. Innovations from this cluster included:

Advanced drip irrigation systems optimized for arid climates
Atmospheric water generation technologies capturing humidity in desert environments
Specialized water recycling systems for urban applications
Desert-adapted hydroponic farming techniques
Water-efficient construction methods and materials

As climate change concerns intensified globally in the 1990s, Jordanian water expertise became increasingly valuable. By 2000, water technology exports constituted approximately 18% of Jordan's GDP, fundamentally altering the country's economic position. When severe drought affected the region in 1998-1999, Jordan weathered the crisis more effectively than neighbors, demonstrating the practical advantages of its water-focused development strategy.

This specialization created unexpected geopolitical leverage. Countries throughout the Middle East and North Africa, regardless of their political alignment, sought Jordanian water expertise. This technological advantage provided Jordan with significant diplomatic and economic influence disproportionate to its size and traditional resource base.

Economic Resilience During Regional Crises (1990-2005)

The first major test of Amman's alternative economic strategy came during the 1990-1991 Gulf War. Unlike in our timeline, where Jordan's position resulted in significant economic penalties from Western and Gulf states, the alternate Amman's more diversified economic base and export markets allowed it to weather these tensions with less severe impact.

When approximately 300,000 Jordanians returned from Kuwait and other Gulf states following the war, Amman's expanding industrial sectors, particularly the water technology cluster and specialized manufacturing, absorbed a significant portion of this workforce—many of whom brought valuable skills and international experience. While the absorption created short-term challenges, it ultimately accelerated industrial development.

The 1997 Asian Financial Crisis tested another aspect of Jordan's alternative strategy. Its partnerships with East Asian economies, particularly South Korea and Taiwan, faced strain during this period. However, the diversified nature of these relationships, focused on technical knowledge exchange rather than solely financial ties, allowed these partnerships to endure despite economic turbulence.

Perhaps most significantly, when regional instability intensified following the 2003 Iraq War, Amman demonstrated remarkable economic resilience. While tourism declined sharply (as in our timeline), the industrial sectors continued functioning and even expanding export markets to countries seeking to reduce dependence on unstable regions.

Transformation of Labor Markets and Social Structures (1995-2015)

The alternative economic strategy profoundly reshaped Amman's social landscape. The emphasis on technical education and specialized industrial development created new patterns of social mobility and class formation distinct from our timeline.

By the mid-1990s, a new technical middle class had emerged—engineers, applied scientists, and skilled industrial workers—whose status derived from technical expertise rather than traditional sources of prestige such as government employment, military service, or commercial trading. This technical class increasingly challenged traditional tribal and family-based power structures, creating social tensions but also driving innovation.

Women's participation in the workforce evolved differently in this alternate timeline. The emphasis on technical fields initially reinforced gender disparities, as these sectors traditionally employed fewer women. However, by the early 2000s, targeted programs to increase female participation in water engineering and pharmaceutical research had significantly altered gender balances in these industries. By 2010, women constituted approximately 38% of the workforce in Jordan's pharmaceutical sector and 27% in water technology companies—substantially higher than comparable industries in neighboring countries.

The refugee crises that impacted Jordan—particularly following the Iraq War and later the Syrian Civil War—played out differently in this timeline. The industrial focus created different labor market integration pathways for refugees with technical skills, while still presenting challenges for unskilled workers. By 2015, Amman had developed specialized industrial training programs for refugee populations, leveraging their integration to further expand industrial capacity.

Altered Regional Economic Integration (2000-2020)

Perhaps the most significant long-term impact was how Amman's alternative development path altered patterns of regional economic integration. Rather than primarily orienting its economy toward Western markets through free trade agreements (as in our timeline), Jordan developed a model of specialized industrial integration with regional economies.

By the early 2000s, Jordanian water management systems were being implemented throughout the Middle East, creating deep technological integration across political divides. Jordanian pharmaceutical companies had established production facilities in several neighboring countries, while maintaining research operations in Amman. This pattern of "specialized regional integration" provided Jordan with distinctive leverage in regional affairs.

The Gulf Cooperation Council (GCC) countries, which in our timeline maintained economic dominance through oil wealth, found themselves increasingly dependent on Jordanian water expertise as they developed ambitious urbanization projects. This reversed traditional power dynamics, with wealthy Gulf states needing Jordanian technical capabilities rather than Jordan primarily depending on Gulf financial support.

By 2010, this alternative pattern of regional integration had created what economists termed the "Amman Model"—specialized industrial development focused on regional necessities, creating economic interdependence based on technological solutions to shared challenges rather than resource extraction or financial services.

Contemporary Position and Global Significance (2020-2025)

By 2025 in this alternate timeline, Amman presents a strikingly different economic profile than in our reality. While still facing resource constraints, particularly water scarcity, the city has transformed these challenges into sources of economic strength.

Amman hosts the headquarters of the International Arid Regions Development Bank, established in 2018 to finance water management and agricultural adaptation projects worldwide. The city's Water Technology District employs over 45,000 people and generates approximately 22% of Jordan's GDP through technology exports, consulting services, and research partnerships.

Climate change has enhanced the global significance of Amman's specialized expertise. As water scarcity affects more regions globally, Jordanian companies and experts are increasingly deployed worldwide, from California to Australia to North Africa. This global demand has created substantial wealth in Amman, visible in the expanding research campuses and technical districts that characterize the city's western expansion.

Politically, Jordan occupies a unique regional position in this timeline. Its economic ties across regional divides have established Amman as a neutral ground for both business and diplomacy. While still facing security challenges from regional instability, Jordan's specialized economic leverage provides greater independence in foreign policy than in our timeline, where aid dependence continues to constrain political options.

The alternative economic strategy has not eliminated all challenges. Income inequality remains significant, with divisions between the technical professional class and those unable to access specialized education. Water scarcity still limits agricultural development and creates tensions with neighboring countries over shared water resources. However, Amman's position as a center of specialized industrial expertise has created a fundamentally different trajectory than the aid-dependent, service-focused economy that characterizes Jordan in our timeline.

Expert Opinions

Dr. Nadia Al-Alami, Professor of Middle Eastern Political Economy at the London School of Economics, offers this perspective: "The alternative development path we've explored for Amman represents a fascinating counterfactual that challenges conventional wisdom about development options for resource-constrained states. By identifying water scarcity as not merely a limitation but a potential source of comparative advantage, this alternate Jordan effectively created what we might call 'necessity entrepreneurship' at a national scale. The contrast with our timeline is striking—rather than remaining dependent on remittances, aid, and limited service sectors, Jordan could have leveraged its very constraints to develop unique expertise. This raises profound questions about whether other resource-constrained countries might similarly transform apparent limitations into specialized economic advantages."

Professor James Harrington, Director of the Center for Middle Eastern Development Studies at Georgetown University, provides a different analysis: "While the alternative economic strategy for Amman presents intriguing possibilities, we should be cautious about assuming such a path would have been politically sustainable. King Hussein's actual balancing act between tribal interests, Palestinian concerns, and international partners reflected deep sociopolitical constraints that wouldn't simply disappear with a different economic vision. The alternative timeline likely underestimates the resistance such a dramatic reorientation would face from traditional elites and external partners with their own agendas for Jordan. That said, the counterfactual usefully highlights how Jordan's actual development path was not inevitable but resulted from specific policy choices made under constraints that might have been navigated differently."

Dr. Laila Hashemi, Research Director at the Arab Council for Economic Development, suggests: "The most compelling aspect of this alternative path is how it reconfigures traditional power relationships between resource-rich and resource-poor states in the Middle East. In our timeline, Jordan's water scarcity keeps it perpetually dependent on neighbors with greater resources. In the alternative scenario, expertise in managing scarcity becomes itself a resource, creating new forms of interdependence that might actually enhance regional stability. When countries need each other's specialized capabilities rather than competing for the same resources or markets, it creates potential for positive-sum rather than zero-sum regional relationships. Whether such relationships would ultimately overcome deep-seated political conflicts remains questionable, but it suggests pathways to regional integration based on complementary specialization rather than mere proximity or political alignment."