BMI's Executive Summary

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Jordan continues to perform a regional diplomatic, defence, and security balancing act. Under King Abdullah the country remains an important US ally in the Middle East, quietly lobbying the George Bush administration to coax the main regional players towards an Israeli-Palestinian peace agreement, which still remains a distant prospect. Alignment with Washington carries both benefits (not least over half a billion dollars in annual economic and military assistance) but also costs. Supporting the US military intervention in neighbouring Iraq has been at times a diplomatically lonely affair as the prospects of stabilising the murderous conflict there looked remote. It has also exposed Jordan to attack from al Qaeda and other Islamist extremists, most notably in the Amman hotel bombings of November 2005, which left a toll of scores of Jordanian dead and injured. In domestic politics the government also faces dilemmas. Minded in principle to move towards a more open political system, the King and his officials now fear that relaxation will benefit the opposition Islamic Action Front (IAF), the political wing of the Muslim Brotherhood. As in Egypt, the government cannot quite make its mind up if the Brotherhood is a legitimate political movement or the thin edge of a wedge that leads to fundamentalism and sectarian violence.

The need to crack down on the kingdom's Islamists reflects the wider turmoil across the region. It was only a matter of time before the pro-US Amman fell victim to the Islamic militancy that is rife in its neighbourhood. Now King Abdullah must face the Islamist challenge head on without causing further disaffection amongst the population. This may not be so easy.

Increased US military aid has supplemented Jordan's traditionally low military expenditure. Such aid has accelerated Amman's modernisation programme through the provision of advanced military exports to Jordan and foreign investment in its defence industry. Jordan's indigenous defence industry provides the country's armed forces with many of its defence requirements, and represents a respectable upgrade capability that is attracting attention across the region, and increasingly into the global arena. Production aside, Jordan is a recipient of an extensive range of advanced Western military hardware.

In such a volatile region, King Abdullah is well advised to hold his current course. He must maintain good relations with the West and keep a lid on the country's Islamists without losing the support of the Jordanian people. Whilst in favour with the West, Jordan is likely to continue to develop its military relationship with the US. US military aid has accelerated extensive modernisation programmes, especially for the Jordanian Air Force, which would otherwise be hampered by the need to maintain low operational costs. If all continues as planned, and Jordan welcomes international investment in its defence industry, the kingdom could be set to become a significant player in the region.

Chapter 1 - Executive Summary

SWOT Analysis

Jordan Political SWOT

Jordan Security SWOT

Jordan Defence Industry SWOT

Chapter 2 - Political Overview

Domestic Political Outlook

Lebanon Stance to Increase Tensions

The Hamas Effect

What Hope for Reform?

Amman Bombs Impact

Foreign Political Outlook

Hamas

Israel

Chapter 3 - Security Risk Analysis

BMI’s Security Ratings

Risk Ratings

Table: Regional Risk Rating

Table: State Terrorism Vulnerability Index

Regional Security: The Middle East and North Africa

Inter-State Conflicts

Internal Conflicts

Jordan Security Risk Ratings

Jordan Conflict Risk

Jordan Terrorism Risk

Jordan Physical Safety Risk

Chapter 4 - Security Overview

Internal Security Situation

Southern Dissent

Terrorism

Ongoing Threats

External Security Situation

Regional

International

Chapter 5 - Military Structure & Defence Industry

Armed Forces

Table: Regional Armed Forces (including conscripted) 2006

Current Strength

Defence Equipment

International Deployments

Table: Jordan Foreign Deployments

Chapter 6 - Market Overview

Arms Trade Overview

Imports

Exports

Industry Trends And Developments

Procurement Trends & Developments

Chapter 7 - Industry Forecast Scenario

Table: Jordan Defence Sector - Historical Data & Forecasts

Key Risks to BMI’s Forecast Scenario

Chapter 8 - Macroeconomic Forecast

Table: Economic Activity

Table: Fiscal Policy

Chapter 9 - Company Profiles

Profiles - Indigenous Manufacturers

King Abdullah II Design & Development Bureau (KADDB)

Profiles - Joint Ventures

Jordan Light Vehicle Manufacturing (JLVM)

Seabird Aviation Jordan (SAJ)

Foreign Manufacturers

Raytheon Technical Services Company (RTSC)

RUAG Land Systems

General Dynamics Land Systems (GDLS)

United Defense

Chapter 10 - BMI Forecast Modelling

How we generate our industry forecasts

Defence Industry

Sources

Competitive Landscape for MEA Defence & Security: Sample of  
Companies Ranked

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Rankings and Competitive Landscapes by production and sales; market share and change on previous year; number of employees, ownership structure and year established. Also includes analysis of company expansion, export and investment strategies.

Network of Defence & Security Sources

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BMI's Middle East & Africa Defence & Security Reports are based on an extensive network of multilateral organisations, government departments, automotive industry associations, chambers of commerce and company reports. Information sources include: