The limits of Arab monarchies: how mayo and IKEA for kings

To journalists in Jordan who witnessed how King Abdullah became a vast fortune, the biggest question is: how? First, let’s set out the relevant details. In 2000, Turkey was controversially granted territory in Jordan’s…

The limits of Arab monarchies: how mayo and IKEA for kings

To journalists in Jordan who witnessed how King Abdullah became a vast fortune, the biggest question is: how?

First, let’s set out the relevant details. In 2000, Turkey was controversially granted territory in Jordan’s restive east to create a new province. King Abdullah was keen for the province to stay largely unoccupied, and so at the beginning of this century, he began negotiations for joint Jordanian-Turkish run economic development and security zones. Both countries agreed to let the other set taxes, rents and tariffs on energy supplies. In the end, Turkey got 84.5 sq km of land. Once, thanks to the initiative, Turkey had taken control of 46% of Jordan’s main electricity, and 65% of its water supply.

Fast forward to 2011. King Abdullah became desperate to find a solution to a chronic power supply shortage he attributed to successive government neglect and failure to expand Jordan’s electricity generating capacity. Late last year, two of Jordan’s three power plants were either running at less than half capacity or completely shut down. He had reached out to the international financial institutions for extra loans. Finally, the World Bank agreed in July to grant the Hashemite kingdom an extra $45m.

But in August last year, that money arrived with a catch: to get it, the World Bank agreed to allow tens of millions of dollars to flow directly to The King’s personal bank account. He could then use the money to make investments in the “development of his own personal lifestyle”, the bank announced. This figure was unproven – though the World Bank was prepared to admit the revelation came as a result of “clerical oversight”. The details were unclear. No record was maintained of how the money was spent.

In reality, what The King did with the money was not so unknown. Indeed, in September last year, he publicly denied ever having received a gift of large sums of cash from Saudi Arabia, an allegation made by two senior Jordanian political leaders and others familiar with The King’s activities. He told Reuters in an interview: “I believe that I started my personal wealth from my income, and this is the way it should be.” He then said he could not account for what he had spent, although he “wishes” he could.

But the sums were not a mere frittering away. In 2011, The King spent as much as $10m on small farms in the highlands of the Golan Heights, one of Israel’s best-known territories annexed by Tel Aviv. In December that year, he spent thousands on real estate in a Mogadishu-style city in eastern Jordan. Since then, he’s spent millions renovating residences and villas; making lavish weddings; and helping to cover the cost of weddings for their hosts.

The Financial Times, which broke the story, was even more explicit. In its initial investigation, one senior figure in the jihadi movement commented: “They say that a person whose wealth exceeds his income is wasting it all. He’s actually rotting away.” Later that year, we established that the White House, in its own investigations, had asked the Central Intelligence Agency to look into how The King amassed his vast wealth.

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By Emma Barry for the Financial Times

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