1996 Jordanian protests

Jordan's history of food subsidies began with subsidies on wheat as well as other commodities to various sectors of society in the 1960s as to nurture loyalty to the Hashemite monarchy at a time of rapid growth and regional instability.^[2][3] Jordan's economy, for the entire history of the Hashemite Kingdom, has been dependent upon various sources of foreign aid, earlier from the Great Britain, and by the 1990s mostly from the United States and other Persian Gulf States. Substantial aid from Saudi Arabia dried up when King Hussein continued to support a bilateral alliance with Iraqi leader Saddam Hussein in the 1991 Gulf War also forcing many Jordanians working in the Persian Gulf States to return home where jobs were few.^[4]

In April 1989, seven years before the events of 1996, the Jordanian government implemented an IMF sponsored economic adjustment and austerity plan that cut food subsidies sparking violent protests. The protests sparked in 1989 and in 1996 appear identical in terms of government policy and public response, they differ considerably in terms of the Jordanian state's reaction to the unrest. Response to the unrest of the 1989 protests that saw the Hashemite regime government relent to the demonstrators demands, sacking the government and reforming electoral laws would differ from the response in 1996 where the king stood behind the government, offered no concessions and, to the contrary, threatened to use any means necessary to quell the disturbances.^[2][5]

In 1996, Karim Kabariti was appointed Prime Minister of Jordan and entered into a political situation marked by a period of recovery from the domestic and regional crises that had surrounded the preceding protests in 1989. Jordan was stabilizing its economic situation, distancing itself from the regime of Saddam Hussein, signing peace with Israel, and rapproaching the United States, the Gulf States, and Saudi Arabia. In effect Jordan had become an enthusiastic participant in the "New World Order" predicating itself in economic liberalization.^[5]

By early 1996 the preceding government had introduced a 5% sales sax and ended an economic boycott on Israel, meaning all requirements of the IMF program had been met except for the lifting of the subsidies. Unofficial estimates in 1995 held that the Jordanian government subsidized almost $380 million in food items, including $147 million for wheat products alone. Increases in wheat prices on the international market saw a sharp increase in subsidies, according to Prime Minister Kabariti the government had only budgeted around $53 million for subsidies, thus creating a deficit unacceptable to the IMF.^[5]

On August 13, 1996, the Jordanian government lifted its subsidies on wheat, its second major economic adjustment after the '89 measures, in cooperation with IMF policy causing all bread prices to immediately double. To offset the economic burden of the lifted subsidies, the government had created a subsidy of $1.80 per person per month to be paid directly to the head of each eligible household.^[2]

Though touted as part of the economic reform process in the country, the mechanisms and timing of this policy were also direct considerations of Kabariti's policy in Iraq. It was obvious to others in the government this would provoke unrest in the country, especially pro-Iraqi strongholds in the south, but this was Kabariti's intention so as to have basis for the arrest of the Ba'athist element of the country and sympathizers of Saddam Hussein.^[6]

A day after lifting the subsidies, an IMF donor meeting in Paris promised more than $1 billion to finance economic projects over the next three years. Japan also began negotiating a $90 million soft loan to finance Jordan's budget deficit.^[2]