1991: Jordan comes under severe economic and diplomatic strain as a result of the Persian Gulf crisis following Iraq's invasion of Kuwait.
Insisting on an Arab solution to the Persian Gulf crisis (which began in August 1990 with the Iraqi invasion of Kuwait), King Hussein of Jordan and Palestinian leader Yasser Arafat spearhead peace initiatives, but are regarded as appeasers of Iraq's Saddam Hussein by the West and the US's Gulf Arab allies. Both King Hussein and Yasser Arafat suffer global diplomatic isolation while, more locally, Gulf states cut off their financial aid. As aid from Gulf Arab states and other income sources contract, refugees flood Jordan, stunting its GDP growth and straining government resources. Because Jordan is a small country with inadequate supplies of water and other natural resources such as oil, the loss of aid from neighboring Arab states aggravates its already serious economic problems, forcing the government to stop most debt payments and suspend rescheduling negotiations.