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Defense Spending

The Israeli war on the Gaza Strip played a pivotal role in the performance of Jordan's general budget for the year 2024, by directing it in a way that enables the local economy to confront the effects of the war and its consequences. On 31 January 2024, by a majority of 89 votes out of 114 representatives who attended the session, the House of Representatives approved the general budget law, which was considered the largest in the country’s history in terms of military spending. Despite the economic conditions the Kingdom is experiencing, the volume of its defense spending in the new budget increased significantly to about two billion dollars out of a total of 17 billion dollars.

According to observers, developments in the military and security situation in the region forced Jordan to increase the volume of military spending and modernize its weapons and military equipment. Jordanian military expert, retired Major General Mamoun Abu Nawar, believes that the current geopolitical circumstances were a major reason for increasing the military budget. He told Al Jazeera Net that expectations of the possibility of a regional conflict erupting in the region or the occurrence of military or security developments "force us to increase the military budget." He pointed out that the Jordanian Armed Forces always need to modernize their weapons and military equipment, explaining that "its financial cost is very high."

The military expert spoke about the threats related to Jordan's northern border with Syria , in terms of drug or weapons smuggling through the borders. He explained that drones have changed the concepts of war, which makes Amman urgently need to obtain missile launchers such as Patriots that are capable of threatening and deterring any neighboring country in the event of a conflict.

In his speech before the House of Representatives, Jordanian Finance Minister Muhammad Al-Issis stressed that "the preparation of the draft law came under unprecedented circumstances as a result of the Israeli aggression against Gaza and the occupied West Bank ." He added that Jordan's firm position, by virtue of its emotional, historical and organic connection to the Palestinian issue, confirms that Amman will remain at the forefront of defenders of Arab and Islamic issues.

The government official pointed out that the 2024 budget “included the highest historical level of capital spending allocations, and the highest financial allocations for our security services and armed forces.” He explained that it came "in support of Jordan's honorable political position, defending the right to Gaza, its children, and Al-Aqsa Mosque and its sanctities."

This new budget comes weeks after agreeing with the International Monetary Fund on a 4-year reform program worth $1.2 billion. On the other hand, economic expert Amer Al-Shoubaki confirmed that the threats on the northern borders with Syria and the western borders with the Israeli occupation and the attempt to destabilize the country, and the movement of various military units along the borders with Syria and occupied Palestine , contributed to raising the financial costs of the Jordanian Armed Forces.

Regarding the impact of approving the largest military budget in Jordan in light of the difficult economic conditions the country is experiencing, Al-Shobaki told Al Jazeera Net that this will reflect negatively on spending on important sectors such as health and education, especially since the financial deficit in the budget reached 114% of the gross domestic product. This reduced the government's scope for spending on vital sectors that people need.

According to previous government statements, the 2024 draft budget succeeded in reducing the primary deficit for the fourth year in a row, and the government will be able to reduce it to reach 812 million dinars, at a rate of 2.1% of the gross domestic product, compared to 2.6% in 2023. Jordan and Israel are linked by a common border of 400 kilometers long, but the Israeli threat does not alone constitute a reason to increase the size of the military budget, as the country has been suffering for years from a turbulent and turbulent neighborhood in the north and east, whether in terms of drug or weapons smuggling from Syrian territory, or the presence of “militias.” Close to Iran in Iraq .

According to official figures reported on the General Budget Department website, Jordanian military spending exceeds $1.8 billion annually, constituting 5% of the gross domestic product, and Jordan is ranked fifth in terms of its military spending in the region compared to this output.

Military Expenditure in Jordan increased to US$1.877 billion in 2017 from US$1.769 billion in 2016. Military Expenditure in Jordan averaged US$1.066 billion from 1967 until 2017, reaching an all time high of US$1.902 billion in 2009 and a record low of US$592 million in 1995. In the long-term, the Jordan Military Expenditure was projected to trend around US$1.776 billion by 2020, according to econometric models.

The Jordanian armed forces have witnessed since the beginning of the 21st century, and with His Majesty King Abdullah II's constitutional powers, a qualitative transfer in their plans and programs in various fields. During 2004, a comprehensive strategy was reviewed for the armed forces taking into consideration the various circumstances and expansion of the armed forces and the multiple roles and responsibilities. General to develop the Jordanian armed forces in all fields to become a modern flexible force more effective and more economical expenditure and achieve the objectives of the defense policy of the state.

In 1989 Jordan's defense budget stood at $465.7 million, as compared to a budget of $6.37 billion for Israel or $2.49 billion for Syria. Jordan's defense expenditure rose from US$1.5 Billion in 2013 to US$2.1 Billion in 2017, at a CAGR of 8.28%, primarily due to the country's precarious security environment aggravated by the responsibility of hosting a large refugee population. Attempts to modernize its military equipment will therefore drive its defense expenditure over the forecast period, which is projected to grow at a CAGR of 5.30% through to 2022. Jordan will maintain its budget allocation for capital expenditure at an average of 4% over the forecast period, with the US providing military aid.

Jordan has a fairly limited capital expenditure on defense with its capital budget outlay for 2017 standing at US$62.2 million. However, the country is a recipient of US military aid, which augments the country's defense capital spending to US$534.3 million for 2017. Despite receiving US military aid, its limited defense capital expenditure does not equip the government with the bargaining power to impose offsets on procurement deals and acts as a barrier to the entry for foreign multinationals.

During 2013-2017, the country's defense expenditure averaged US$1.8 Billion and included US$418.6 million in foreign military aid annually. Jordan's homeland security expenditure declined from US$1.3 Billion in 2013 to US$957.3 million in 2017, as these funds were diverted to curb internal conflicts and control the overspill of refugees. During the historic period, Jordan focused on importing armored vehicles, aircraft, missiles, and artillery, which will continue to be primary weapon categories.

NATO launched a Defence Capacity Building Project on 'Enhancing Jordan’s capacity for Crisis Management, Continuity of Government and Exercises' on 19 February 2018. The three-year project will help the Jordanian National Center for Security and Crisis Management work at its fullest operational capacity. Acording to the statement, the project was made possible through the contributions of four NATO members, the Netherlands, Germany, Norway, and Turkey. Jordan is not a member of NATO. However, it is a major ally of the alliance.

The United States has provided economic and military aid to Jordan since 1951 and 1957, respectively. On February 14, 2018, US Secretary of State Rex W. Tillerson and Jordanian Minister of Foreign Affairs Ayman Safadi signed a new Memorandum of Understanding (MOU) on U.S. foreign assistance to Jordan. The committed the United States to provide a minimum of $750 million of Economic Support Funds (ESF) and $350 million of Foreign Military Financing (FMF) to Jordan between FY2018 and FY2022. In line with the new MOU, for FY2019 President Trump is requesting $1.271 billion for Jordan, including $910.8 million in ESF, $350 million in FMF, and $3.8 million in International Military Education and Training (IMET).

U.S. military assistance broadly supports the Jordan Armed Forces’ (JAF) ability to: secure its borders; counter terrorist threats; participate in coalition operations; and defend Jordan’s national territory. Jordan received over $670 million in FY 2017 and $633 million in combined State and Department of Defense (DoD) security assistance and security cooperation funds. Jordan is the third largest recipient of FMF funds globally and the single largest recipient of DoD Section 333 funding, assistance that promotes State and DoD collaboration on security assistance goals. DoD assistance bolsters partner nation military capacity to counter terrorism and protect borders.

The United States has delivered critically needed munitions to the Royal Jordanian Air Force (RJAF) for use by its F-16 fighter aircraft in coalition operations against ISIS. Additionally, we continue to support efforts to strengthen the JAF’s ability to rapidly respond to transnational threats along its border with Syria through focused training programs to build the conventional skills and expertise of the JAF and via the provision of equipment such as UH-60 Blackhawk helicopters. The United States also plans to complete key work on the Jordan Border Security Program, an integrated border security surveillance, detection, and interdiction system along Jordan's land borders.

In addition to FMF, Jordan received $4 million in International Military Education and Training (IMET) funding in FY 2018, one of the largest IMET allocations in the world. IMET provides professional military education and training to military students to increase professionalization, build capacity in key areas, enhance joint interoperability, create a better understanding of the United States, and grow lasting military-to-military relationships. This assistance is key to establishing relationships with future leaders in the JAF. IMET graduates in Jordan include King Abdullah II, the Chairman of the Joint Chiefs of Staff, the Vice Chairman, the Air Force commander, the Special Forces commander, and numerous other commanders.

Jordan's defense outlays have been burdensome for a small country without major resources or a highly developed industrial base. Offsetting this burden to some degree has been the positive impact of defense spending on the national economy. Soldiers' pay, the employment created by the military and security forces, and the contracts and support services generated in the name of national security provided important stimulation for what generally has been regarded as a sluggish economy.

The financial and military subsidies that Jordan traditionally has received from other Arab states have represented a net benefit to the economy while reducing the actual burden of the military effort to somewhat less than it appeared to be in statistical terms. Nevertheless, the Jordanian defense effort was facing acute budgetary and financial difficulties in the late 1980s, as a consequence of decreased financial aid from the oil-producing Persian Gulf states and reduced remittance levels from Jordanian workers in other Middle Eastern countries. Together, these sources had brought in as much as US$2.5 billion annually in earlier years. Although other Arab states had pledged at the Baghdad Summit in 1978 to provide Jordan with more than US$1.2 billion annually for ten years, only Saudi Arabia had fulfilled its commitment .

The 1988 defense budget of JD256 million (US$763 million) was about 60 percent higher than the allocation of a decade earlier. When inflation was taken into account, however, officially acknowledged defense costs appeared to have remained fairly steady until 1986, when an upward trend became evident. Possible explanations for this rise included moderate increases in the number of men under arms, pay raises, some domestically absorbed equipment outlays, sharp increases in the international price of armaments, and a higher amortization level of foreign military debt. Published government figures were incomplete since they did not include important elements of defense spending and were therefore understated. The United States Department of State estimated that a little more than half of the subsidies from other Arab states was reflected in the budget, with the remainder applied to off-budget defense expenditures.

The military debt had become a serious problem by early 1989, as the difficulties of meeting the kingdom's overall debt-servicing obligations continued to mount, placing additional strains on the balance of payments. It was reported that Jordan was running about eleven months behind on its military debt payments, with more than US$95 million overdue.

Jordan is a recent entrant to the domestic defense industry with the establishment of King Abdullah II Design and Development Bureau (KADDB) in 1999. The defense industrial initiative is intended to jumpstart industrialization across a range of sectors. With the Jordanian defense expenditures at 8.7% of GDP, the Jordanian authorities created the defense industry to utilize defense budget spending power and to assist in economic growth without placing additional demands on the national budget.