Three decades on, Israel-Jordan border project revives hope for peace dividend

Building up Jordan Gateway industrial park and opening new bridge should benefit both economies, but frostiness lingers

Nearly three decades after signing a peace treaty, Israel and Jordan took a tiny step forward toward warming relations this week with the announcement by Israeli Prime Minister Yair Lapid that his government would accelerate a neglected project to build a joint Israeli-Jordanian industrial zone straddling the banks of the Jordan River.

Touted as a “breakthrough” and a step toward “civil peace,” the Jordan Gateway plan fits snugly within the broader process of normalization taking place between Israel and other Middle Eastern countries. However, although both Israel and Jordan stand to gain economically from this shared venture, tense relations between two countries, coupled with anti-Israel sentiment in Jordan and bureaucracy tied up with ongoing electoral chaos in Israel, analysts and those working on the project say not to expect any fast or immediate results.

“I’m hesitant to say this signifies a normalizing of relations between Israelis and Jordanians,” Oded Eran, Israel’s former ambassador to Jordan, told The Circuit. “However, if this project does finally come to a conclusion, it will be an important step, psychologically, because it has become a lingering symbol of the failure of the relations between Israel and Jordan,” said Eran, now a senior fellow at the Institute for National Security Studies in Tel Aviv.

The creation of a cross-border industrial park was initially outlined in the peace treaty Israel and Jordan signed on Oct. 26, 1994. Within three years, a Qualified Industrial Zones (QIZ) was established in the Jordanian city of Irbid with the aim of taking advantage of Israel’s Free Trade Agreement with the U.S. That concept soon transformed into the Jordan Gateway plan, an economic zone where citizens of each country could move freely within a designated “bubble.”

Jordan set aside an area of roughly 12,000 square meters (3 acres) for the project and today, on the Jordanian side, sit a handful of manufacturing plants employing around 500 workers. On the Israeli side, which is slated for a medical center and a high-tech park, the area remains empty, held up by internal bickering among various governmental bodies and security concerns. In 2012, Israel renewed efforts to fulfill its side of the project, appointing the Ministry of Regional Cooperation to take charge of the plan and coordinate between all the official parties. A bridge connecting the two banks of the river was completed in 2019, but still stands unused, waiting for an official authority to facilitate crossings.

Bridge built in 2019 connects Israeli side of Jordan Gateway Industrial Park (seen in foreground) with Jordanian side

Lapid, who met with Jordan’s King Abdullah II in Amman on July 27, noted the 28-year lag since the peace agreement at last Sunday’s weekly cabinet meeting and called the decision to move forward “a breakthrough that will contribute greatly to developing and strengthening the region.”

Israel’s regional cooperation minister, Issawi Frej, said the Jordan Gateway was “part of the major progress that we have carried out in strengthening relations with Jordan in the past year. We started with the agreement to export water in exchange for solar energy and now have this decision, which takes the vision of civil peace, not just between the countries but also between the peoples, an additional step further.”

Frej continued, “Advancing the project will facilitate the strengthening of economic cooperation with the kingdom and contribute greatly to the economies of both countries and of the region as a whole.”

A senior Israeli source, who was present in the meeting between Lapid and Abdullah, told The Circuit that the industrial park was discussed at length and there was a real eagerness to see the project come to life.

An official outline of Jordan Gateway, obtained by The Circuit, notes the benefits and political importance of this joint economic-civic venture to both Israel and Jordan, including providing Israel access to the wider Arab world and giving Jordan access to the West.

“Beyond the political importance of a joint economic-civic venture, the benefits to Jordan from the venture are access to advanced technology, methods, and knowledge and approximately 10,000 jobs, as well as the possibility of marketing products that will be manufactured in the Park to Israel and/or through the port of Haifa to Europe and the United States,” the document reads. “The benefits for the private sector in Israel include access for Israeli products to markets in the Arab world, production close to Israel at the costs of the Jordanian market and business cooperation with entrepreneurs and investors from Jordan and other Arab countries.”

“I think that in the Jordan-Israel context, this industrial park is very important and should not be underestimated,” said Eran, who served as envoy between 1997 and 2000. “General unemployment in Jordan stands at 25%, while for women and the younger generation it reaches 50%, so every additional place of employment is important, and in general, it is important for Jordan’s economy.”

For Israel, too, the benefits are broad, not only adding some 2,000 new jobs but also increasing the country’s GDP by some 3.6 billion shekels (about $1.2 billion) and its exports by 10 billion shekels (about $3.3 billion), according to Regional Cooperation Ministry predictions.

But, the former ambassador cautioned, the political and demographic situation in Jordan, where a significant percentage of the population is of Palestinian heritage, is tricky when it comes to Israel. Relations between the countries have long been tense, with Jordan watching anxiously whenever there is unrest at Jerusalem’s Muslim holy sites, which it formally oversees under the current status quo. Actions by former Prime Minister Benjamin Netanyahu, who proposed annexing the West Bank, and the launch of former U.S. President Donald Trump’s peace plan, only served to increase the pressure.

Perhaps most telling was Jordan’s silence following Lapid’s announcement this week about fast tracking the project. Palestinian-Jordanian journalist Daoud Kuttab writing in the Media Line noted the absence of comment from the Jordanian government and the press on the Gateway plan noting that “The Jordanian royal court, the Bisher Al Khasawneh government, and both the official and private media totally ignored a major Israeli announcement concerning Jordan that was made at the outset of the weekly Israeli cabinet meeting.”

He also wrote that in order for the project to move forward, “the king needed the acquiescence of the Palestinian leadership. That is why he sent two of his royal military helicopters to pick up Mahmoud Abbas and his aides for a short meeting at the palace on July 24.”

“The trend towards normalization in Jordan is not encouraged or developed,” because of Israel’s ongoing conflict with the Palestinians, said Eran, adding that there are even forces actively working “against Jordan joining the framework of the Abraham Accords,” the 2020 normalization agreements signed between Israel, the United Arab Emirates, and Bahrain. Sudan and Morocco agreed to normalize ties with Israel later that year.

Efraim Inbar, president of the Jerusalem Institute for Strategy and Security, said however, that the economic factors of this project “should not be exaggerated – what really counts is the politics.”

“This is not the first time that we have an industrial zone in Jordan, and it did not change the attitudes of the Jordanian people towards the peace process a bit,” he told The Circuit. “The Jordanian people still call it ‘the king’s peace.’”

Inbar said it was unclear if the project will move forward. “There is a big difference between announcing it and implementing it,” he said. “Even if it is implemented, its influence is marginal.”

He dismissed any connection between the project and the normalization agreements Israel signed in 2020 with four Arab states. “Jordan is a good neighbor,” he said. “They prevent terrorism and that is the important thing.” 

However, Ksenia Svetlova, a senior non-resident fellow at the Atlantic Council, a Washington, D.C.-based think tank, and the Israel Middle East program director for Mitvim, an Israeli think tank, drew a parallel, saying that the project remained important and logical for both countries, even after a delay of 25 years.

“It was delayed because nobody really had an appetite for it and the relationship between Jordan and Israel soured, but during the last few years the relations were relaunched and this is the key to this important idea,” she explained, recalling meetings between Abdullah and Israeli Defense Minister Benny Gantz and former Foreign Minister Gabi Ashkenazi during the final year of Netanyahu’s government. Former Prime Minister Naftali Bennett also met with Abdullah last year.

A former member of Knesset, Svetlova said she believed that the Abraham Accords might be playing a role in renewing ties and reviving the joint economic plan.

“The generally optimistic and positive dynamics of the Abraham Accords have had an impact on Israel’s veteran normalization partners, Egypt and Jordan,” she maintained. “There have been more developments in the past two years than there were in the previous 10 years with both these countries, so I think that generally, there was more inspiration in promoting important economic projects between Israel and Arab countries in the region.

Svetlova added, “This could be another benefit of the Abraham Accords: that they not only motivate the direct members, but they also have a positive influence on the veteran normalization countries.”

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