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Economy of Jordan

Jordan's GDP per capita rose by 351% in the 1970s, declined 30% in the 1980s, and rose 36% in the 1990s. Jordan is classified as anemerging market. After king Abdullah II's accession to the throne in 1999, liberal economic policies were introduced that resulted in a boom that continued through 2009. Jordan has a developed banking sector that attracts investors due to conservative bank policies that enabled the country to weather the global financial crisis of 2009. Jordan's economy has been growing at an annual rate of 7% after King Abdullah II's accession to throne in 1999 and up to 2008. As of 2015, Jordan boasts a mere GDP worth of $37.6 USD bn, ranking it 89th worldwide.

Jordan is an emerging knowledge economy. The main obstacles to Jordan's economy are scarce water supplies, complete reliance on oil imports for energy, and regional instability. Just over 10% of its land is arable and the water supply is limited. Rainfall is low and highly variable, and much of Jordan's available ground water is not renewable. Jordan's economic resource base centers on phosphates, potash, and their fertilizer derivatives; tourism; overseas remittances; and foreign aid. These are its principal sources of hard currency earnings. Lacking coal reserves, hydroelectric power, large tracts of forest or commercially viable oil deposits, Jordan relies on natural gas for 10% of its domestic energy needs. Jordan used to depend on Iraq for oil until the American-led 2003 invasion of Iraq.

Jordan's economy in the past few years has grew at a very slow rate, averagely around 2%, this is attributed to decrease in tourist activity due to regional turmoil, increased military expenditure for border protection and maintaining civil security, electrical company debts due toattacks on Egyptian pipeline , accumulated interests from loans, the collapse of trade with Iraq and Syria and increased expenses from hosting 1.4 million Syrian refugees. All of this has contributed for the swelling of Jordan's public debt, which reached 90% of its GDP in 2016. The regional situation has made Jordan increasingly reliant on foreign aid.

Sectors

Agriculture, forestry, and fishing

Despite increases in production, the agriculture sector's share of the economy has declined steadily to just 2.4 percent of gross domestic product by 2004. The most profitable segment of Jordan's agriculture is fruit and vegetable production (including tomatoes, cucumbers, citrus fruit, and bananas) in the Jordan Valley. Fishing and forestry are negligible in terms of the overall domestic economy. The forestry industry is even smaller in economic terms; approximately 240,000 total cubic meters of roundwood were removed in 2002, the vast majority for fuelwood.

Mining and minerals

Potash and phosphates are among the country's main economic exports. In 2003 approximately 2 million tons of potash salt production translated into US$192 million in export earnings, making it the second most lucrative exported good. Jordan was the world's third largest producer of raw phosphates.

Industry and manufacturing

The industrial sector, which includes mining, manufacturing, construction, and power, accounted for approximately 26 percent of gross domestic product in 2004 (including manufacturing, 16.2 percent; construction, 4.6 percent; and mining, 3.1 percent). The main industrial products are potash, phosphates, pharmaceuticals, cement, clothes, and fertilizers. The most promising segment of this sector is construction.

Jordan has a plethora of industrial zones and special economic zones aimed at increasing exports and making Jordan an industrial giant. The Mafraq SEZ is focused on industry and logistics hoping to become the regional logistics hub with air, road, and rail links to neighboring countries and eventually Europe and the Persian Gulf. The Ma'an SEZ is primarily industrial focusing on satisfying domestic demand and reducing reliance on imports.

Telecoms and IT

Telecommunications is a billion-dollar industry with estimates showing that core markets of fixed-line, mobile and data service generate annual revenue of around JD836.5m ($1.18bn) per year, which is equivalent to 13.5% of GDP. Jordan's IT sector is the most developed and competitive in the region due to the 2001 telecom liberalization.

Energy

Energy remains perhaps the biggest challenge for continued growth for Jordan's economy. Spurred by the surge in the price of oil to more than $145 a barrel at its peak, the Jordanian government has responded with an ambitious plan for the sector. The country's lack of domestic resources is being addressed via a $14bn investment programme in the sector. The programme aims to reduce reliance on imported products from the current level of 96%, with renewables meeting 10% of energy demand by 2020 and nuclear energy meeting 60% of energy needs by 2035.

Transport

The transportation sector on average contributes some 10% to Jordan's GDP, with transportation and communications accounting for $2.14bn in 2007. Well aware of the sector's importance to the country's service and industry-oriented economy, in 2008 the government formulated a new national transport strategy with the aim to improve, modernise and further privatise the sector.

Services

Services accounted for more than 70 percent of gross domestic product (GDP) in 2004. The sector employed nearly 75 percent of the labor force in 2002.

The banking sector is widely regarded as advanced by both regional and international terms. In 2007, total profits of the 15 listed banks rose 14.89% to JD640m ($909m). Jordan's strong growth of 6% in 2007 was reflected in a 20.57% expansion in net credit to JD17.9bn ($25.4bn) by the end of the year. Contributing an estimated JD477.5m ($678.05m), or 4.25% of Jordan's GDP, according to figures from the Central Bank, the construction sector performed strongly in 2007.

Tourism

The state of the tourism sector is widely regarded as below potential, especially given the country's rich history, ancient ruins, Mediterranean climate, and diverse geography. Despite personal appeals by the king and an increasingly sophisticated marketing campaign, the industry is still adversely affected by the political instability of the region. More than 5 million visitors entered Jordan in 2004, generating US$1.3 billion in earnings. Earnings from tourism rose to US$1.4 billion in 2005. The tourism sector remains an important element of the Jordanian economy, directly employing some 30,000 Jordanians and contributing 10% to the kingdom's GDP.

This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia article "Economy Of Jordan"

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