MAPPING THE LANDSCAPE OF THE "NEW MIDDLE EAST":

When Jordan and Israel signed a peace treaty in 1994, it not only marked an end to a state of war but it also set in motion the formation of links of economic cooperation and interdependence. These links, it was hoped, would begin to transform the map of the war-torn Middle East. One day, borders would no longer be militarized frontiers but stop-over points along trans-regional highways transporting people and goods to new markets and destinations. Proponents of this so-called "New Middle East" vision argued that such a model would help promote Arab-Israeli peace by demonstrating that it could generate mutual economic benefits and would then solidify closer relations by forging shared material and strategic interests between the governments and their respective private sectors.

Promoting regional tourism development was widely viewed as the critical first arena across which regional linkages would be formed and economic cooperation would begin. This viewpoint is summarised by Patrick Clawson in a 1994 report assessing the prospect for tourism development and economic cooperation in the New Middle East:

Tourism offers a wide variety of opportunities for the economic development of the Levant. More importantly from the perspective of the international community it holds the prospect of demonstrating the material rewards of Arab-Israeli peace. Many of those rewards will come automatically, as a more peaceful environment encourages more visitors and stimulates private sector investment in tourism facilities. In addition, there are a variety of ways in which government action and donor assistance could further encourage tourism.1

A few years after the triumphant signature of the Wadi Araba Treaty, though, it became apparent to most Jordanians that the expected economic benefits of peace would prove meager. Regional trade and economic cooperation across the Jordan River have since remained limited and steps towards the normalization of relations with Israel continue to face vocal opposition from elements in Jordanian society. As one former peace negotiator declared, "The model of peace to which we aspired would achieve improved living conditions, mainly through increased trade with our neighbours. This hasn't happened, and this is why the anti-peace camp is now having a heyday."2

The failure of the peace process to "achieve improved living conditions" in Jordan is most evident in the tourism sector. A few years after the boom and bust cycle, which was experienced immediately after the treaty was signed, few in the tourism industry still looked at economic cooperation with Israel as the answer to the sector's woes while most expressed disappointment about the meager economic benefits generated by peace. The experience of tourism between Israel and Jordan in the wake of peace represents a challenge to the theory that peaceful relations between states can be promoted through projects of economic cooperation which generate mutual material gains, foster personal contact between peoples, and increase links of interdependence. While external factors, such as political events in Israel or the frugal spending habits and improper behaviour of Israeli tourists in Jordan, are often blamed as the cause of the failure of economic cooperation in the tourism sector, such arguments overlook the domestic political factors which shaped tourism development patterns in Jordan.

This chapter argues that while tourism development in the wake of the peace offered opportunities for some entrepreneurs in Jordan, the economic benefits of tourism did not "come automatically" as Clawson and other advocates of the New Middle East vision had suggested they would. Tourism development has been difficult to sustain in the context of an increasingly complex global tourism economy without adequate public and private institutions for its promotion. This analysis contends that, nevertheless, the state's ability to represent the peace process as leading to a tourism development boom which could readily provide material benefits for broad segments of the Jordanian population helped King Hussein move rapidly towards making peace with Israel in 1994 in the face of much potential domestic opposition. Without the ability to represent tourism as a vehicle for generating material rewards from the peace, political opposition to the treaty and the government would likely have developed sooner and spread more widely throughout the population. Through a close reading of the official discourse surrounding the peace process and Jordan's specific tourism development plans, the analysis will show that this misrepresentation of the dynamics that govern tourism economies contributed to inadequate state policies for tourism promotion and led to misguided entrepreneurial strategies by much of the private sector. In particular, it led many Jordanians to seek to exploit short term opportunities by rapidly commodifying Jordanian geography and cultural heritage while being unable to build institutional mechanisms for monitoring and promoting the demand for their products within the global tourism economy.

In the wake of the 1992 Oslo Accords between Israel and the Palestinian Liberation Organization a new expression began to enter the diplomatic lexicon. Politicians, political analysts, and think-tank policy papers began to re-imagine the political economy of the Middle East through the lens of the "New Middle East." This vision was most emphatically articulated by Israel's foreign minister and peace negotiator Shimon Peres. In a 1993 book, The New Middle East, Peres laid out a far reaching plan for the future of regional integration and economic cooperation across the Middle East.3 He called for "a New Middle East following a European plan: economic cooperation first, followed by increasing, ongoing political understanding until stability was achieved."4 This form of economic cooperation was expected to lead to a remapping of Middle Eastern political identities. Replacing the antagonistic nationalist identities of Arab and Zionist, Peres argued that the Middle East now has "a common enemy: poverty" which is "the father of fundamentalism."5 Peres sought to forge a new regional post-nationalist logic for Middle East politics defined by supporters of "peace" and the New Middle East on one side and, in his view, by fundamentalists and terrorists on the other side.

In Peres's vision, tourism played a key role as a means to begin stitching the economies of the Middle East together. "Tourism," he writes, is "one of the most important resources of the sun-soaked Middle East."6 He called for the building of an expansive tourism and recreation infrastructure along a "Red Sea to Dead Sea canal", joint regional tourism projects, and a major airport along the "Gulf of Eilat" serving Israel, Jordan, Egypt and Saudi Arabia. Claiming that "violence" had been the main barrier to tourism development in the region, he stretched his enthusiasm for tourism to suggest that, "A flourishing and stable tourist industry is also good for stability - equal in importance to an international police force."7 He even went as far as to suggest that, "Today, more than ever, the measure of a country's strength is not how many troops it has but how many tourists."8 Most critical to the argument presented below, Shimon Peres confidently noted that tourism "...is an important industry, which can, in a relatively short time, generate profits and create employment opportunities."9 Even Arabs who were skeptical of the other elements of Peres's vision often agreed with this one last point.

The logic of the New Middle East looked different from the other side of the Jordan River. Having alienated itself from its former Gulf allies and with Iraq remaining under siege, Jordan in the early 1990s was seeking to reposition itself in the emerging regional order dominated by the United States and its eastern Mediterranean allies, Israel and Turkey.10 The King's choice to rapidly conclude a peace treaty with Israel was mostly likely driven by the desire to maximise Jordan's future strategic interests in this emerging environment. Peres's New Middle East vision from this perspective might be read as a liberal gloss over a realist alliance framework through which Jordan sought increased military support and economic payoffs from the United States.

Following Laurie Brand's argument that, for Jordan, "budget security" is often the defining motivation behind foreign policy choices, most commentators on the peace treaty have emphasised how the potential economic rewards of peace shaped Jordan's interest in the treaty.11 These views suggest that Jordan's expectation of economic rewards in the wake of peace made the option of peace more attractive and made the selling of the peace easier domestically. However, the critical question in assessing the influence of economic incentives on the peace process is to ask where the economic gains were going to come from and how they were going to be disbursed. Jordan's quickest material rewards from a peace deal were expected to consist of aid and debt relief from the United States, but while a peace with Israel was generally understood as the American condition for these, "...both sides publicly deny there was a quid pro quo."12 The Jordanian government could not publicly defend the treaty by pointing to concrete material rewards from a definite source. Furthermore, under International Monetary Fund (IMF) imposed austerity measures and pressures for economic privatization and liberalization, debt relief and aid would not have enabled the state to expand public sector employment, increase consumer subsidies, and rebuild and sustain the old political patronage systems.

Thus, while aid and debt relief were critically needed by Jordan's fragile economy, the political implication of the expected economic rewards of peace played out in a more complex way. In his effort to craft a constructivist reading of Jordan's foreign policy, Marc Lynch faults what he terms "rationalist" readings of Jordan's foreign policy which assume Jordan's national interests are objective and fixed. He argues that such analyses ignore "...the importance of identity and public deliberation in producing state interests."13 In this vein Lynch suggests that the choice of the peace option was not determined by an economic calculation but that "...the economic rewards were more of a public sphere justification strategy than a major cause" of the peace treaty.14 By this he means the public discourse over the economic rewards can be viewed as part of an effort to publicly redefine Jordan's national interests and identity. In particular this meant a disengagement from Arab nationalist and Palestinian concerns and an embrace of closer integration into the global economy. Additionally, the official public discourse supporting the New Middle East vision can be understood as an effort to evoke a "...substantive change in norms and institutions" in Jordan. "As Prince Hassan often explained," Lynch notes, "a Middle East Market could allow Jordan to break its dependence upon foreign aid and turn its particular combination of human capital, close ties to Israel, and poor natural endowments to its long term economic advantage."15

Along with this reconstruction of Jordan's political economy which would redefine its identity and interests, Jordan's support of the New Middle East vision developed as part of a process of reformulating the regime's political survival strategy. In the late 1980s, Jordan began a controlled political opening which was widely viewed as driven by declines in rentier incomes such as remittances and aid from the Gulf. 16 Political liberalization was used, in part, as a means to temper the critical political reaction to the imposition of economic austerity measures. In the 1990s, though, operating in a context of more open political discourse the King's policy of pursuing a rapid peace treaty with Israel risked fostering domestic political opposition which now had a more open press and parliament as vehicles for dissent. Jordan's entry into the peace process signaled another shift in the state's survival strategy, this time de-emphasizing political openness17 and focusing on broad-based national economic development as a basis of political stability and regime legitimacy. What was most critical for the government about the expected economic rewards from peace was that the New Middle East model would establish the foundation for a new economic development strategy for the Kingdom which would provide material benefits to wide segments of the population.

While not highly publicised at the time, it was understood in many quarters that the material rewards from the treaty would not come quickly and even debt relief and aid from the United States might be drawn out over a few years. These would be inadequate to publicly justify the peace, especially in the short term. For example, delivering a speech written by Prince Hassan to the Middle East Policy Council in Washington, Dr Jawad Anani, a key figure in both the peace process and economic development issues in Jordan, acknowledged that indeed, according to a World Bank report,18 Jordan's national income and state revenues would probably drop in the first years after a peace deal. Liberalizing trade, for example, would mean lowering tariffs, and this would mean a decrease in government revenues and in most sectors Jordan's economy was far outmatched by Israel's. The World Bank report even notes that Jordan's underdeveloped tourism facilities would make it very difficult to compete with Israel and Egypt. Dr. Anani thus suggested that Jordan would first have to invest heavily "in roads and infrastructure and hotels and restaurants" before the gains could be realised.19 His remarks, though, also demonstrate how many officials thought that Jordan would be able to depend on the tourism sector to get through the difficult transitional phase: "[S]o, what we're doing, we're doing like sometimes shopkeepers [do], looking for things which can generate cash, like encouraging tourism, you know. There is ready money there."20

With few other options, the prospect of a boost in national income initiated by expansive tourism development in Jordan became the linchpin for the state's "public sphere justification strategy." This strategy was bolstered, as noted above, by the widely held view in the international community that "Tourism...holds the prospect of demonstrating the material rewards of Arab-Israeli peace."21 This view became manifest in the large contributions of American, European, and Japanese aid to support tourism development planning and antiquities preservation. Most critically, the tourism sector was envisioned as being able, in the short term, to provide the national economy with tangible economic benefits from the peace. Thus not only would peace bring the state additional debt relief, aid, hard currency, and tourist fee revenues, but by linking the expansion of tourism so closely with the advance of the peace process in the official public discourse, the peace could be represented as offering benefits broadly to anyone willing to take advantage of the opportunity. Tourism, furthermore, was thought to be one of the few economic activities that, under the new regime of economic liberalization, the Jordanian state could centrally manage as a sector of the national economy. Additionally, state-owned national resources such as coastal land and national heritage sites could provide new sources of state revenue. Allowing the state to control and direct the economic benefits of tourism would increase the state's bureaucratic powers and secure its supply of hard currency.

The arguments for realizing the economic gains of the peace through tourism development were expressed early in the peace process. On November 23, 1993 in a speech to the parliament concerning the peace process broadcast on Jordanian TV, King Hussein stated that the government would support the development of tourism facilities. He noted that, "This should increase economic returns in a manner that would support the balance of payments, replenish the treasury's hard currency reserves, augment the economic growth rate and expand the gross national product." He made particular reference to the private sector which "...would have a major role to play in tourist development" and would be encouraged "through incentive expanding investment, streamlined procedures and tourist development legislation."22

In addition to the announcement of the opening of border crossings with Israel the Jordanian government pledged a massive tourism infrastructure plan and began drawing up a series of tax incentives for foreign and local investors in the sector.23 To promote investment numerous press conferences were held announcing the expected growth of tourism in the country. For example, in August 1994 at the Dead Sea the minister of tourism with his Israeli counterpart announced a plan for twenty new investment projects as he predicted a prosperous tourism industry in the coming years. "You know," he said, "Tourism is a peace industry, [it] flourishes always within a peaceful environment that is based on stability and security. And we believe that all parties in the region...will benefit greatly once peace is achieved."24 Tourism planning documents spelled out in detail the state's visions for tourism development on a massive scale and explained that, "The 6.3 percent annual growth in hotel rooms over the past 10 years is predicted to increase dramatically, along with the average occupancy rate of 65 percent and the current average daily room rate of $86."25 More dramatically, the Jordan Valley Authority's Dead Sea Master Plan (1994, revised 1996) explained that based on projected tourism flows:

This set of potentialities places the development planning approach in the position of [a] 'supply strategy'; in other words, the essential parameters [for planning tourism development growth] stem rather from the Study Area bearing capacity, within, naturally, 'a sustainable development concept', than from any potential market appraisal! 26

The official effort to publicly promote tourism investment gained its greatest exposure with the plans prepared by the Ministry of Planning and presented under the eyes of the world media at the 1994 and 1995 Middle East and North Africa (MENA) summits in Casablanca and Amman. In addition to an Aqaba "Peace" airport, numerous fantastic, coordinated Jordanian-Israeli projects were officially announced at these meetings and other press conferences. Driven by international investment, the realization of Peres's New Middle East vision would leave the Israeli-Jordanian border across the Wadi Araba and the Jordan River as well as the Gulf of Aqaba dotted with deluxe hotels, amusement parks, and even a multifunctional John the Baptist baptism pool and conference center. These developments were all to be connected by super highways across the desert and concrete promenades along the shores.27

Soon after the border crossings with Israel were opened there was a massive flood of Israeli as well as North American and European tourists. Driven by curiosity and the almost mythic aura that Petra had acquired, Israeli tourism expanded from officially zero before 1994 to over 100,000 in 1995. European and American tourist arrivals grew by 75 per cent from 204,000 over the whole of 1993 to 359,000 over the course of the year 1995. Most notably, package tourism shot up from 440,000 to 1,141,000 over the same period while total visitors to Petra rose from about 40,000 during 1991 Gulf War ebb to 200,000 in 1994 and then jumped to 330,000 in 1995 and to 414,000 in 1996.28

The explosion of tourism visitors in 1994 and 1995 led to previously unheard levels of overbooking at hotels while all other aspects of the industry, such as bus lines and rental car agencies, quickly faced acute shortages. The occupancy rate of hotels classified as 5-star deluxe went from an average of 42 per cent in 1993 to 66 per cent over the course of 1995. Well-established hotels like the Inter-Continental in Amman were often experiencing occupancy rates of over 90 per cent.

In the midst of this tourism boom, local investors were quick to expand, often haphazardly, Jordan's tourism capacity. These new opportunities stirred the Jordanian private sector at all levels. Tourism development was being promoted as a means to stimulate national growth, not simply to benefit the firms already working in the sector. The economic potential of tourism development seemed to hold out potential opportunities for most anyone regardless of skill, profession, or even capital endowment while avoiding the question of the limits or distribution of these gains. Everyone interested, it seemed, could imagine a way to profit from the new influx of tourists. The wealthy merchant and banking families could exploit these new opportunities as could the tribes of Wadi Musa, the former workers in the Gulf now driving cabs in the wealthy sections of Western Amman, and the souvenir hawkers in the poorer areas of Amman's downtown. In particular, the rural Trans-Jordanian regions in the south and along the Jordan River in the north, which were badly hurt by the austerity programmes, were expected to benefit by direct government efforts at fostering regional development schemes centered around tourism. Tourism was also thought to be able to benefit most segments of the Palestinian population which dominated the private sector from the assimilated bourgeoisie elites to the lower middle class shop owners. Unlike other forms of private sector development, it seemed the benefits of tourism could potentially be spread widely down the class ladder and regionally across the whole imagined national community of Jordan.

Whilst most local smaller investors in the tourism sector, as well as a few larger ones, had little previous experience in the industry, Jordanian investments in tourism were soon spurred by growing confidence in the future of the tourism market. Few relied on previous experience or direct knowledge of the international tourism market in making their investment choices. As more and more Jordanians began to open tourism-related businesses this led others to rush to get their facilities built in order to beat their competitors to the profits. At a time when the economy was weak and there appeared to be few other opportunities, news stories about the Jordanian economy in both the local and international press singled out tourism as, for example, "...the one industry that is expected to see a major boom in the next five to ten years."29

As a result of these investments from 1993 to 1996 the number of hotel beds in Jordan expanded 68 per cent from 13,500 to 22,700. Over the same period the number of rental car offices expanded from only 75 in 1993 to 237 in 1996, while the number of rental cars tripled as nearly did the number of tourist guides in the country. The area around Petra experienced some of the most rapid and extensive changes. In just days after the peace many residents were at work converting their existing apartments into make-shift hotels. Soon big developers from Amman were buying up expensive plots of land with grand visions of tourist palaces. At a cost of $70 million to $80 million in the two years after the peace treaty the hotel capacity in Petra/Wadi Musa had quadrupled to 2,000 rooms while land values skyrocketed.

This boom, though, was not to last. As soon became clear, the general public greatly misjudged the effects of peace on the tourism economy. Even without the turn to the right in Israel and the continued siege of Iraq, the tourism explosion was unlikely to keep up this radical pace for long even though government commissioned plans and the few investors who drew up feasibility studies often assumed that it would. While tourism receipts in 1995 and 1996 grew by over 14 per cent (in nominal terms), in 1997 they grew only 4 per cent. Hotel occupancy rates for all hotels went from 46 per cent in 1995 back down to 38 per cent in 1997. In Petra, combining a drop in tourism with an expansion of capacity the highs and lows are more extreme going from almost 62 per cent in 1994 then dropping to 31 per cent in 1997. Furthermore, open borders with Israel, which allowed for package tours to easily travel from Israel to Jordan and back, had an unexpected result. As borders literally fell off the tourism maps,30 most Western tourists experienced "regional tourism" in the Middle East by visiting Jordan as adjunct day trip from Israel. As a result, while Petra saw more visitors, Jordanian hotels, tour operators, and airlines were often bypassed. Overall the average length of stay for package tours decreased from 5 nights in the 1989-1994 period to 3.7 nights in the 1995-7 period.31 As one Jordanian economist put it "Hotels, tourist buses and travel agencies are real and sad examples of how parts of the economy went on an investment binge in 1995, only to come down to earth with a thud a year later and then start to wallow in a depression which continues."32

We should note here that tourism did not die out in Jordan, and in recent years government figures have shown renewed growth in the number of tourist arrivals. But these numbers do not reflect the changing value of the tourism product and the economic costs of tourism development efforts which took place in the immediate wake of the peace treaty. The over-development of similar products and the high fluctuations in tourism inflows has led to destructive competition, downward price spirals and wasted resources, not to mention dashed hopes. For many in the hotel sector the over-capacity of supply and the desperate quest for revenues has made paying back loans impossible while eroding their efforts to improve the quality of their products and services. This has also prevented the development of robust linkages to the small and informal businesses associated with tourism. After a law eliminated the government monopoly in the tour bus sector, the number of tour buses expanded greatly. But with the downturn in tourism, tour bus operators began facing such ruinous over-supply that they formed a cartel to keep a floor on prices. This cartel system has since become a subject of anti-trust legislation in parliament. As for travel agents and tour operators, many have had to shut their doors a few years after opening while the ones that remain face stiff competition. The impact is even being felt by outgoing Jordanian tourists, the Jordan Times reports, since "strained economic conditions seem to be compelling some tour operators to skip on their promises to their clients."33

Tourism development in the wake of the peace process resulted in the unsustainable over-commodification of the tourism landscape where creating tourist products (such as hotel rooms, handicrafts, and cultural experiences) proved easier and more accessible to local entrepreneurs than attempting to coordinate and ensure demand for such products. This was made possible by the promotion of a strategy of national tourism development-beginning with the negotiation of the peace deal and represented in tourism development plans-where firms were encouraged to imagine potentially unlimited markets for tourism products and to invest considerably to meet those markets. The state, in the process of the selling of the peace deal, became the central marketer of information for these firms. In granting licenses for hotel developments and announcing infrastructure projects the state was presenting the private sector with a certain type of "market" information. At the same time, the state was producing tourism figures, projections, and plans which touted tourism as the new "oil" on the national economy.34 Driven by unwarranted optimism and the political imperative of over-promoting tourism development as a means to capture the economic rewards of peace, state agencies and state plans lacked an accurate vision of what the tourism economy would look like from vantage point of the individual private firms in the tourism sector.

It is useful to contrast these experiences with an example of a tourism firm which has been able to develop mechanisms to coordinate and ensure the demand for such products. Some of the larger tourism firms in Jordan, such as those owned by Zara Tourism Investments, use hotel management companies (Such as Movenpick, Inter-Continental, and Hyatt) which allow their hotels to draw on the vast marketing networks of these global corporations. Carefully constructed management contracts often require these hotel operators to attain a certain total gross revenue in order to earn their management fees. Additionally, Zara has created its own backward and forward linkages by starting, for example, an engineering consulting firm specializing in building hotels, as well as a Dead Sea products company which stocks the gift shops in Zara-owned hotels. Such linkages are often viewed by tourism planners as vital mechanisms through which the economic benefits of tourism are able to spread to other sectors of the economy. But often, instead of generating opportunities for independent entrepreneurs, these linkages are formed through vertical and horizontal integration within complexes of tourism firms owned by the same set of investors. This limits the scope of the economic benefits gained from tourism and shuts out those who lack the capital and skills to conduct such strategies. This result is the reverse image of what the peace process was suppose to produce. Instead of providing an engine of national economic growth which leads to increased standards of living throughout the population, this process has led to the development of luxury tourism enclaves governed by a narrow tourism elite. The irony is that this "tourism bourgeoisie" is often derided as a parasitic "rentier class" but in fact they benefit not by capturing rents but because they have the skills, capital, and access to market information which most smaller firms lack.

What can the state do to assist smaller firms to better understand and adjust to market conditions? One attempt at an answer is the Jordan Tourism Board (JTB) as envisioned in the early 1990s by the United States Agency for International Development (USAID). Even before the peace process was completed USAID had drawn up plans to establish the JTB as a privately run (but partly government financed) organization to market Jordan as a tourism destination overseas. The tasks of the board were to include, among other things, the development of market intelligence capabilities in order to monitor trends and developments in the international tourism market. It was to serve as a link between international markets and local tourism firms. It was to help these firms with theme promotion, brochure development, and market interruption strategies.35 The formation of the JTB, though, became mired in politics. The USAID, the ministry of tourism and various private sector representatives spent years sorting out the funding and governance mechanism of the JTB. USAID preferred that the JTB have joint private and public funding but be privately managed. In the end, though, the Jordanian authorities fearing that it would become a slush fund for private agents, refused to give it this sort of decentralised autonomy. After a series of unsuccessful meetings USAID abruptly pulled out of this project as well as all their other tourism development efforts. The ministry of tourism eventually established the JTB on its own terms. But without the funding, strong private sector leadership, and skilled staff originally envisioned by the USAID plan the JTB for years was able to do little more than represent Jordan at tourism trade fairs. While the JTB has vastly expanded its capabilities and functions since, this came too late to help the sector through the boom and bust cycle in the wake of the peace.

In order to best translate future tourism inflows into broad-based economic development, agencies such as the Jordan Tourism Board and the Jordan Hotel Association should work towards helping firms acquire the market knowledge and technical skills needed to find and exploit links to appropriate markets. Doing this does not require large-scale master planning which often proves problematic in such a volatile tourism economy, but does require a "firm-centered" approach where the different needs and abilities of a diverse range of firms are catered to.

There is, though, another method for public agencies to help firms find such market opportunities which does not require these agencies to possess superior market knowledge. Drawing on Albert Hirschman's theory of "unbalanced growth" Charles Sabel suggests a method for public agencies to help firms find such market opportunities by inducing what he calls disequilibrium learning. In this model, the state, "...instigates the firms to set goals with reference to some prevailing standard so that shortfalls in performance are apparent to those with the incentive and capacity to remedy them - [that is] the firms themselves - and new targets are set accordingly."36 In other words, in exchange for committing to this process of self-improvement leading to producing goods that are competitive in the international market the state provides various forms of inducements, subsidies, or protection such as providing access to public land or providing public goods to these firms.

One ongoing example in Jordan which comes close to this model is the Royal Society for the Conservation of Nature's (RSCN) eco-tourism project at Dana Nature Reserve. The RSCN was given management authority over a protected area of government land. While the objective of the Dana Reserve was primarily the preservation of biodiversity, as part of the project the RSCN developed a tourism unit which built a low impact camp site with tents, a guest house, and a number of walking trails. The objective of this project was to generate income and jobs for the local community including people displaced or who had their livelihoods impinged upon by the establishment of the nature reserve on their grazing land. Such a project would not have been possible without the state granting the land and authority to the RSCN and without the World Bank granting funding. But these resources were granted conditionally. The project has been required to show progress on certain performance standards (economic, social, and environmental) in order to retain World Bank funding and government support. After a few years of operation the tourism unit has steadily increased its self-generated income stream to the point of covering 100 per cent of the reserve's running costs. Critical to the project's success was institutional capacity building efforts which established procedures for task design, implementation, and evaluation. The project developed links to tour operators interested in eco-tourism as well as drew on the local tourism market. By linking the eco-tourism project to the local production and national marketing of items such as jams and handicrafts they even created a "brand" name which is used to promote their products by associating these handicrafts and jams with the cause of environmental awareness and nature appreciation represented by "the Dana logo." This project has genuinely created a new market in Jordan for a previously little known commodity, nature tourism, and turned a biodiversity project into a viable business model with exemplary organizational and operational methods.37

Such a strategy could work in the rest of the tourism sector where access to land, building licenses, skill training, tax breaks, and market information can be exchanged for state monitoring of firm performance on a number of indices. In doing so, the state could seek to limit rent-seeking, over-capacity, and low quality standards in the tourism sector. This would require limiting entry into the market of firms unwilling or unable to seek to match a set of rolling performance standards as well as helping firms which exhibit the ability to improve themselves over time. Along with this, other criteria-such as upholding environmental standards or requiring the local hiring and training of employees-could be enforced by giving firms positive incentives. Politically, though, this would have been difficult in the context of the selling of New Middle East vision as a means to quickly reap material rewards from the peace. Instead of simply opening borders and then attempting to extract rents from day tourists (such as through the high Petra gate charge), Jordan could use similar disequilibrium learning techniques to regulate international and Israeli tour operators. Regional cooperation could be reestablished by implementing such regulatory institutions and techniques on a regional basis. As tourism firms across the Middle East develop equivalent standards and methods of operation, tourism would flow better across borders as would market information and, more critically, firm-to-firm ties would increase leading to mutual economic gains.

1 Clawson, P. (1994) "Tourism Cooperation in the Levant," The Washington Institute Policy Focus Research Memorandum No. 26 (May); 7.

2 See Henderson, A. "Jordanian-Israeli peace treaty: Mixed bag of success, failure," Jordan Times, (November 30, 1999).

4 Peres, The New Middle East; 11. Exclaiming that "the Middle East needs a Jean Monnet approach today" (p. 71) Peres explicitly modeled his vision after post-World War II visions of Europe which led to the formation of the European Economic Community. His vision echoes the thinking of the liberal "integration" theorists of the 1950s and 1960s. See Puchala, D. "The Integration Theorists and the Study of International Relations." In W. Kegley Jr, C.W. and Wittkopf, E.R. (1998)(eds), The Global Agenda: Issues and Perspectives, Random House 2nd Ed (New York); 198-215.

10 See Mufti, M. (1997) "Jordanian Foreign Policy: State Interests and Dynastic Ambitions," a paper presented at the Politique et Etat en Jordanie, 1946-1996 conference, Institut du Monde Arabe, Paris (24-5 juin 1997); 19-20, and Ryan, C. (1998) "Jordan in the Middle East Peace Process: From War to Peace with Israel," in Ilan Peleg (1998) (ed)The Middle East Peace Process: interdisciplinary perspectives, State University of New York Press, (Albany, NY); 162-166.

11 Brand, L. (1994), Jordan's Inter-Arab Relations: The Political Economy of Alliance Making, Columbia University Press (New York); 295-297, Ryan, C. "Jordan in the Middle East Peace Process"; 166-7; and Zunes, S. (1995), "The Israeli-Jordanian Agreement: Peace or Pax Americana?" Middle East Policy 3,4 (April).

13 Lynch, M. (1999), State Interests and Public Spheres: The International Politics of Jordan's Identity , Columbia University Press (New York); 167.

16 Brand, L.A. (1992), "Economic and Political Liberalization in a Rentier Economy: The Case of the Hashemite Kingdom of Jordan," in Harik, I. and Sullivan, D.J., (1992)(eds), Privatization and Liberalization in the Middle East, Indiana University Press (Bloomington); 210-232, and Brynen, R. (1992), "Economic Crisis And Post-rentier Democratization in The Arab World: The Case of Jordan," Canadian Journal of Political Science 25, 1 (March); 69-97

17 Laurie Brand argues that the developments in the peace process led directly to retreats in the political liberalization process, see "The Effects of the Peace Process on Political Liberalization in Jordan," Journal of Palestine Studies 28, 2 (Winter 1999): 52-67.

19 El Hassan Bin Talal (1994), "Jordan and the Peace Process," Middle East Policy 3, 3: 39

20 Reported by the Federal News Service, September 26, 1994. The transcript is reprinted in a slightly altered form in Middle East Policy 3, 3 (1994): 39.

23 See The Hashemite Kingdom of Jordan (1995), "Tourism Infrastructure," and Industrial Promotion Corporation, "Investment Promotion Law" No. (16) for the Year 1995, Regulation No. (1) of 1996, and Regulation (2) of 1996.

24 Radio Jordan broadcast in English, August 17, 1994, transcribed in BBC Summary of World Broadcasts August 19, 1994.

26 Jordan Valley Authority (1996), Tourism Development Project of the East Coast of the Dead Sea (SPA), Part Four: Market Evaluation & Assessment, Suweimeh & Zara Development Areas (Amman), 22.

27 The following documents are revised versions of the official government schemes presented at the 1994 MENA summit in Casablanca: Government of Israel (1995), Development Options for Cooperation: The Middle East/East Mediterranean Region: 1996 Version IV, "Chapter 7: Tourism Development Options, " (Ministry of Foreign Affairs, Ministry of Finance); Ministry of Planning (1995), Jordan: A Winning Business Destination, "Tourism Sector," (Amman).

28 Tourism statistics were gathered from the Ministry of Tourism and Antiquities, Statistical Section. Figures have been rounded off.

30 See Stein, R. L. (1998), "National Itineraries, Itinerant Nations: Israeli Tourism and Palestinian Cultural Production," Social Text No. 56 (Fall); 95-97.

31 Cited in Barham, N. (1998), "Tourism in Jordan: Development and perspective" Jordanies No. 5-6 (June-December); 132.

32 Khouri, R. "Bandwagon economics lead nowhere," Jordan Times (July 23-4, 1998).

33 Ma'ayeh, S. "Shady travel agents cloud meant-to-be sunny holidays," Jordan Times (September 1-2, 2000).

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Waleed Hazbun is a graduate student in the Department of Political Science at the Massachusetts Institute of Technology. He is currently writing his doctoral dissertation entitled, Enclave Orientalism: Geographies of Tourism and the Nation-State in the Arab World.