July 2 (Bloomberg) -- Every day, thousands of Syrians flee their war-torn country for refugee camps and cities in Jordan. It may be Jordanians mixed among them who most concern leaders in the Hashemite Kingdom.
Some Jordanian militants who’ve joined the fight to oust Syrian President Bashar al-Assad are coming home in body bags. Those who return alive, possibly burning with Islamic fervor, concern officials there, in Israel and in the U.S., who worry that the Western ally on Israel’s longest and quietest border could be the next Arab nation to implode.
The specter of militant Islam isn’t the Hashemite Kingdom’s only challenge. King Abdullah faces a faltering economy, tribal tensions, anger over the pace of political reform, the spillover of Syrian violence, as well as the estimated half-million Syrian refugees who are straining the country’s scant resources and its political balance.
“The Jordanian government is terrified,” said Robert Blecher, the Arab-Israeli Project Director for the International Crisis Group, a New York policy group. “What’s happening to the north is fundamentally changing the nature of the country. This is an existential challenge.”
“All the elements are in place for a crisis,” said Hussein Ibish, a senior fellow at the American Task Force on Palestine, a Washington policy group.
Conditions in Jordan, a secular U.S. ally vital to Israel’s security and to halting the spread of Islamic extremism, will only get worse as the Syrian conflict continues, according to interviews with current and former government officials, analysts and development specialists.
“The consequences are already unbelievably bad,” said Fred Hof, the Obama administration’s former special envoy to the Syrian opposition and now a senior fellow at the Atlantic Council, a Washington policy group. “But if you think they’re bad now, wait six months.”
In one sign of the U.S. administration’s concern, the Pentagon left F-16 fighter jets, Patriot missile defense batteries and military personnel in the kingdom after a two-week, 15,000-person military exercise -- the largest in two decades -- ended in southern Jordan last month.
A more telling symbol of Jordan’s vulnerability may lie to the north -- the border with Syria, where sand-swept tent cities for refugees are rising and militants cross with regularity.
U.S. and other intelligence officials have reported that Islamic extremists, including some with ties to al-Qaeda offshoots in Iraq and elsewhere, are infiltrating Jordan by posing as Syrian refugees, said a U.S. official who spoke on the condition of anonymity to discuss intelligence reports.
While some militants may be seeking only rest and recuperation, the official said, others may be bent on jump-starting an Islamic rebellion against a pro-Western monarchy that has a peace treaty with Israel, cooperates with the U.S. and is known for aggressively pursuing extremists.
“Those qualities are greatly hated by Salafist types,” Ibish said. “Those driven by strategic ideas could make a case that Jordan is a juicy target, given what it provides the West and the status quo, and ripe for the picking.”
Jordan has its own salafis, or militant Islamists, crossing into Syria to join rebel forces, said Chas Freeman, a former U.S. ambassador to Saudi Arabia and lifetime director of the Atlantic Council.
“It’s become a staging area for fighting in Syria and covert training,” Freeman said. “King Abdullah sounds terribly worried about all this, and with good reason.”
At the same time, chaos plaguing other Arab countries may help bolster the king’s standing as head of a stable regime, said Aaron David Miller, a vice president at the Wilson Center, a Washington policy group.
Monarchies like Abdullah’s have been “redeemed by the viciousness and the chaotic nature of the opposition and the violence” in Syria and elsewhere, Miller said. “The worse it gets, the more stable, the more continuity the king enjoys.”
The influx of people fleeing upheaval elsewhere is a challenge for Jordan. Mounting sectarian violence in Iraq could send a renewed flow of Iraqi refugees into Jordan, perhaps mixed with Islamic extremists whose objectives are political rather than personal, the U.S. official said.
The 494,000 people that the United Nations High Commissioner for Refugees estimates have fled Syria for Jordan already pose a heavy burden. The UN projects that refugees could double by the end of the year. Jordan’s Zaatari camp, with 125,000 residents, is now the second-largest in the world, according to CARE, the international humanitarian organization.
Uma Kandalayeva, a veteran of man-made misery and natural disasters that prompt massive refugee flows, is posted to Zaatari, where her job also entails helping local Jordanians.
“The international community is helping refugees, who are a significant, significant burden on Jordanians,” said Kandalayeva, who works for International Relief & Development, a humanitarian group based in Arlington, Virginia.
Only three countries in the world face more severe water shortages than Jordan, according to the Crisis Group’s Blecher. Refugee camps are stretching those water resources even thinner, and straining systems to provide health care, education and food.
Despite the burdens, Jordanians aren’t getting much support, Kandalayeva said. “Who is helping them with increased food prices, less water?” she asked in a telephone call from the camp.
Thousands of refugees have bypassed the camps to settle in Jordanian cities, where they’re driving up rents and food costs and driving down wages by competing for jobs.
Economic strains were already hitting Jordanians. To meet conditions for loans from the International Monetary Fund, Jordan has cut fuel and food subsidies, moves that brought people into the streets in protest. Cuts to electricity subsidies are pending. The inflation rate was 7.1 percent in May, up from 4.1 percent a year earlier.
Moody’s Investors Service downgraded Jordan’s government bond rating on June 26 to B1 from Ba2, citing “dramatic deterioration in Jordan’s public finances,” including a deficit that peaked at 8.2 percent of gross domestic product last year.
The unemployment rate is approaching 13 percent, and youth unemployment, a major driver in the protests in Tunisia, Libya and Egypt, is higher. “We’ve witnessed frustrations boil over as young people grow disillusioned,” the country’s Queen Rania told the World Economic Forum in Jordan last month.
Economic woes are eroding the social contract between the king and indigenous groups known in Jordan as East Bankers, which have traditionally received military, government and public sector jobs in return for their loyalty.
The influx of Syrian refugees may exacerbate long-standing tensions between East Bankers and Palestinians, who make up as much as 70 percent of the population and complain of second-class status, Blecher said. Because many of these refugees could be of Palestinian origin, they could upset the country’s delicate political balance.
“Jordan is almost desperate, not only because of refugee inflows, but because of the unbalancing of Jordanian politics because of the refugee flows,” said Freeman.
If popular opinion turns against the king, said Ibish of the American Task Force on Palestine, he’ll get support from Jordan’s friends and neighbors.
“The great strength of the Jordanian kingdom is not its internal strength,” Ibish said. “It’s that everyone around them -- the Israelis, the Saudis, the Turks, the U.S. -- need them to do what they do.”
“The status quo can go on without Bashar al-Assad,” Ibish said. “The status quo can’t really go on without the Hashemite Kingdom.”
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