Gas price rises spark anger and protests in Jordan

Women taking part in anti-government protest in Amman

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"Jordan, we will sacrifice our blood for your sake," chant hundreds of women dressed in black and white, as police look on.

The women are marching down a main road in the capital, Amman, just after Friday prayers on a bright winter's day.

They are part of a demonstration against a government decision to increase the price of energy, particularly gas.

A crowd of men are holding aloft some battered-looking red gas cylinders, as an Islamic preacher rails against the government.

Previous protests have turned into riots. Some people have even questioned the legitimacy of the all-powerful and normally revered King Abdullah.

Anti-government protesters in Amman The rising cost of living has sparked calls for wider political changes
Cash crisis

The cost of a gas cylinder has increased by 50% after the government cut public energy subsidies. Prices for electricity and petrol have also risen.

Start Quote

Cardboard factory owner, George Abu Aita

Our type of business depends mostly on fuel prices, electricity prices. These have gone up dramatically”

End Quote George Abu Aita Cardboard factory owner

That has hit the pockets of families and the cost of doing business in this dry desert country, devoid of oil, sandwiched between volatile neighbours.

"Everything is becoming more expensive - gas, clothing, kerosene," complains Em Hekmat, a widow and mother of five children, living in a poor Amman neighbourhood.

"I've tried to reduce spending a little bit on food items. I only cook a big meal every two days," she says.

Her son has had to give up his university course because the family need him to work.

Big business is hurting too.

In a noisy, dusty cardboard factory outside Amman, the owner, George Abu Aita, explains that most of the boxes he makes will eventually end up abroad, largely in neighbouring Iraq.

"Our type of business - cardboard and paper - depends mostly on fuel prices, electricity prices. These have gone up dramatically."

He has already seen a fall in business because of the fighting in Syria, just 100 km away. Jordan's energy crunch is making things worse, pushing up his costs compared to rivals in Saudi Arabia.

"They have cheaper energy costs, cheaper distribution costs, bigger markets. How can we compete with them?" he asks rhetorically.

Man carries canister of gas Gas sellers say people are struggling to afford higher prices
Recession threat

This has all come about because Jordan's government is facing a cash crisis.

The country's energy subsidies bill has soared over the past two years.

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We will exhaust all - all - efforts to avoid any rise in the prices, but sometimes you cannot do without that”

End Quote Dr Abdullah Ensour Prime Minister, Jordan

That is largely because a pipeline bringing cheap gas from Egypt has been repeatedly attacked in Sinai. The energy shortfall has to be made up with more expensive oil from Saudi Arabia.

When the budget deficit rose to more than 10%, the government said it had to rein in borrowing and so was cutting subsidies and freezing public sector recruitment.

"It was ill-timed because it was the onset of winter," says private sector economist Yusuf Mansur.

"It will cause greater inflation and a deepening of a recession," he warns.

The government's austerity drive has been accompanied by a $2bn (£1.2bn) loan from the International Monetary Fund and an aid package from Saudi Arabia.

However, Mr Mansur says austerity will not work and is urging the government to keep borrowing more money.

When he is reminded of the problems large budget deficits have caused in Europe over the past few years, he says investors "get scared also from riots".

He predicts more price rises will cause increasing unrest, "much worse" than Jordan has already experienced.

More pain to come

Jordan was already struggling to deal with high youth unemployment, and a lack of water.

The prime minister, Dr Abdullah Ensour, an economist, is a caretaker leader until elections at the end of January.

In his plush office, he says the government has no choice but to cut its spending, and has approved cash handouts to try to cushion the poor from the effect of rising prices.

"The revision of the prices did not touch the less-income or middle-income people… Some would make some savings from the handouts we're giving them."

The prime minister acknowledges there are further price rises to come, as the government looks at cutting electricity subsidies further.

"What will be done will be in their interests. Whatever measures are [taken] are unavoidable. There are no other solutions.

"We will exhaust all - all - efforts to avoid any rise in the prices, but sometimes you cannot do without that."

The prospect of further financial and economic pain has led some to predict the protests will grow and could turn increasingly violent.

The demonstration observed by the BBC is relatively good natured, as the police stand back and let demonstrators mock King Abdullah - something not previously tolerated.

Members of the opposition Muslim Brotherhood chant, "We get freedom from God, not from you, Abdullah".

The anger at the rising cost of living here has sparked calls for wider political reform, but not everyone is convinced by it.

One onlooker, a civil servant who only gives his name as Sultan, remarks: "There are not more than 5,000 people here, so they don't represent the whole country. I'm not in favour of rising prices but we need to preserve the peace."

Jordan has avoided the chaos witnessed in other Arab countries recently.

But it faces an uncertain few months as it grapples with its considerable financial and economic challenges.

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