So, is investment in Jordan trickling down to the poor or not?

I’ve been planning to write a post about the supposed ‘death’ of Jordan’s middle class for ages, but sadly did not have the time (please have a look at the lively discussion I started about this in March). But I’ve been asking everyone, from millionaires to taxi drivers about this and have started to form my own opinions on the economic situation of people in this country.

My tentative conclusion is that while a NEW middle class is coming into being and growing, an OLD middle class (teachers, government employees) is suffering from the rise of the cost of living. And then you have journalists who are connected to the old middle class who end up writing in the papers about the death and burial of the middle class.

A discussion with a middle class friend of mine last week (he’s alive, not dead by the way :) , taught me something important. When trying to understand people’s economic situation, don’t listen to what people say but look at what people do (and consume).

  • More and newer cars on the streets of Amman
  • Mobile phones in every pocket
  • Fast food chains that are growing
  • Al Waseet newspaper which doesn’t go below 88 pages in the winter
  • Shopping malls expanding and new one being built
  • Satellite dishes on every roof
  • Pages and pages of holiday trips ads before public holidays
But ask people how they’re doing and they’ll tell you the situation is bad!

Yes, as I said, some people are having a worse time. But don’t tell me all this rise in consumption is just driven by the 2% rich elite in Jordan (the ‘Winners’ according to Nahed Hattar).

It has to be said that one real problem facing the middle class is the rise in property prices. On the flip side, banks are becoming more active in promoting housing loans.

The other problem when talking about personal finances is that of defining what ‘middle class’ means. I was talking to a quite rich person the other day. Definitely upper middle class or higher. The man considers himself ‘just’ middle class.

OK. I AM middle class. But if I compare myself to the 19 year old kid driving that Hummer or 100,000 JD Range Rover, I am ‘poor’. The rich in Jordan are showing their wealth, which gives many people the feeling that they are poor.

A variation on this issue is the question weather the investments in Jordan are trickling down to the poor or not. My Ajnabeeyeh friend says no:

Ajnabeeyeh: Jordan’s Reaganomics:
So listen up, all you elites here in Amman: I’m getting more and more evidence that all this cash flowing into the country hasn’t yet even started thinking about trickling down to the have nots. Honestly, I’m getting really tired of people saying that this is the only way for things to move ahead, blah, blah, blah.
She’s been talking to taxi drivers and lot of other people and came to the conclusion that life is getting more expensive and ‘things are out of control’.

This ‘trickling down’ question needs some serious study, again, beyond what people say. Maybe the money is trickling down to the new middle class. Try to find an architect or engineer in Amman these days, for example. The construction boom is undoubtedly creating jobs for them. Newspapers have a lot of employment ads. There is more work. But there might be structural, social and educational problem that that prevent a better trickle down effect.

The other problem with Jordan’s current investment boom is how focused it is on construction. Construction does create jobs, but not the kind of jobs that have longer term effects and that increase the amount of intellectual capital in the country.

When the situation was bad a few years ago, Jordanians started to get creative and talk about the importance of the IT sector. We were to become a knowledge economy. Exporters of software. Owners of intellectual property.

The current boom, driven by petro-dollars has spoiled us once more. And we might be missing a chance for longer term development.

“Intellectual property” sounds so hard, doesn’t it. There’s this difficult word in it. Err.. What? intell.. intellectu.. what? Just delete it man and invest in what you know. You know? “Property”!

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10 Responses to “So, is investment in Jordan trickling down to the poor or not?”

  1. Nidal Says:

    Good post,
    You have put your finger on the key.
    “don’t listen to what people say but look at what people do”
    But it dose not follow that the conclusion is “things are better.” nor “things are worse”.. my gut feeling is that the reality is more complex, and has a lot to do with a society attempting to adjust from a state kept one to an entrepreneuring and some what capitalist one, and unfortunately that dose not come naturally to most Jordanians. I better get some sleep I have a plane to catch in a few hours but might comeback and elaborate later.

    Another point is the question should be about the quality of life, rather than society segments which are hard to define, yes that is vague (I believe you can have some useful criteria thou) in its self but at least it removes one layer from the puzzle as after all the question about the size of the middleclass is merely an attempt to measure if life is improving or not.

  2. Firas Says:

    Ahmad it’s all relative.

    You see, a 30 years old university graduate would have a new car, fancy cell phone and stuff, but they can’t get married or think of starting his/her own business. You spend what you earn. The difference that employees in other countries get health insurance.

    On the other hand, some blue-collar workers make decent money (my barber makes JD1.75K/month)

    Some want to get hired without working hard or investing in developing their skills! They think that by getting a degree you own the world.

    All in all it’s not bad in Jordan and I think middle class still exists. I think it takes some major events to demolish middle class, like a war or political instability, just like what happened in the USSR, in other words when the economy collapses.

  3. London Mink Says:

    I’ve seen a survey lately that half the middle-class people in the UK consider themselves working class. That is, because their parents were working class, and their accent is not ‘posh’, ergo they are working class. They wear it like a badge of honour. Class in the UK is really very confusing.

    There are various ways of measuring class. Lifestyle and patterns of consumption is one of them; profession is another; what kind of education for the childern; values; but also saving – which i think is the big problem, achilles heel for middle class all over the world. Because (at least in the west) we’re talking debt, not savings. A middle class which does not save is far more vulnerble, even if they talk on mobile phone all the time.

  4. Muhammad Arrabi Says:

    Very nice post. Your theory (new middle class rising, old fading) makes sense.

    But, who are the people of the new middle class?

  5. Omar Barsawad Says:

    It is the same here too! On the whole, people’s lives seem to be improving with time, but almost everyone is complaining on how hard it has become.

  6. Wael Says:

    Complaining is just a habit, and some people do it just to “yerfa3o el 7asad 3an 7alhom”. Anyway if we want to make a study we should also look outside the borders of Jordan and see what things are happing around us to know exactly were we standing…

  7. Phree Says:

    Man, people here are hypocrites and tend to blow things out of proportion a lot and like I said in my previous post in march a lot of people just spend money to show off; on stuff they don’t really need. I’ve seen taxi drivers with more expensive cell phones than my docs at university. People here don’t really know how to manage their financial affairs very well. All this said, wages ARE low compared to the lifestyle most people try to live. Oh and I just remembered this! Usually people consider themselves poor or not wealthy because they don’t have any property or real estate owned or whatever, i.e they don’t have anything to fall back on just “in case something happens in the future”, that’s why just like a friend of mine, who’s living the life of middle class America (yeah not jordan) considers himself and his family poor. I guess Wealth does play a major part in this country, owning real estate is THE guarrantee here financial security…

  8. manal Says:

    i guess the new middle class are the families that lives here and the father is working in another country,there is alot of ppl who is like that…and the newly weds couples that are just starting, some starts as a middle class either comming from a rich or poor family and they either become richer or poorer or they stay in the middle class.

  9. Banna Says:

    ...picked this up from another blog…

    I am proud of being Jordanian but I am disappointed at the failure of our “liberal” institutions and those who are in a position to make a difference. The Jordanian liberal intelligential has the biggest lips when it comes paying lip service to any humanitarian cause. But when it comes to doing anything, they and the rest of us, stand on the sidelines and throw our hands in the air.

    Sometimes I think the liberal intelligentsia in the Arab world exists only to whitewash the failures of their government sugar-daddies or to protect themselves from the scrutiny and criticism of the West, leaving the Islamists to champion the poor and care for the needy. Until one day we wake up and there is another Islamist victory in every Arab country.

    Let’s face it; the liberalism of the Arab elite seems to surface only when we are humiliated in public, not because we have a guilty conscience. We know about all the problems that pop up every now and then in the Western press. We are quick to distance ourselves with our empty condemnations from social, economic, and political inequities when the same elite are the ultimate beneficiaries of these inequities. The fact is, most members of the Arab neo-liberal intelligentsia got their education and perks as a result of the unfair distribution of wealth.

    I doubt there will ever be a true liberal movement in the Arab world in the coming decades. All we have is a grotesque neo-liberal movement that blames the victims for the failure and corruption of the official institutions, where the former (the citizen) is always the problem and the latter (the regime and its institutions) is the enlightened victim whose brilliant vision for progress is dragged down by the backwardness of their citizens.

    Shame on us for being so hypocritical.

  10. fathi Says:

    شقق للبيع

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