Economy of Jordan

Economy Of Jordan

The economy of Jordan is robust and growing. Its GDP per capita soared by 351% in the 1970s, and after only a slight decline of 30% in the 1980s, grew once again by 36% in the 1990s. Jordan is classified as an emerging market. After King Abdullah II's accession to the throne in 1999, liberal economic policies were introduced that resulted in a boom lasting for a decade, continuing through 2009. It is now one of the freest and most competitive economies in the Middle East scoring higher than the United Arab Emirates and Lebanon. 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. It is emerging as the "business capital of the Levant" and "the next Beirut". Jordan's economy has been growing at an annual rate of 7% for a decade.

Jordan has more free trade agreements than any other Arab country. Jordan has FTA's with the United States, Canada, Singapore, Malaysia, the European Union, Tunisia, Algeria, Libya, Algeria, Turkey and Syria. More FTA's are planned with Iraq, the Palestinian Authority, the GCC, Lebanon, and Pakistan. Jordan is a member of the Greater Arab Free Trade Agreement, the Euro-Mediterranean free trade agreement, the Agadir Agreement, and also enjoys advanced status with the EU.

Jordan can point to its strong leadership from the royal family and the government as well as its highly skilled workforce as the major catalysts for this great economic growth. Increased investment and exports are the main sources of Jordan's growth. Continued close integration into the GCC markets will reap vast economic rewards for the Kingdom in the coming years.

Jordan is an emerging knowledge economy. Education reform, continued privatization and economic liberalization, and economic restructuring are ensuring the path to a knowledge-based economy.

The main obstacles to Jordan's economy is scarce water supplies, complete reliance on oil imports for energy, and regional instability. Just over 10% of its land is arable, and even that is subject to the vagaries of a limited water supply. 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 Iraq invasion in 2003 by the United States.

Rapid privatization of previously state-controlled industries and liberalization of the economy is spurring unprecedented growth in Jordan's urban centers like Amman and especially Aqaba. Jordan has six special economic zones that attract significant amount of investment amounting in the billions: Aqaba, Mafraq, Ma'an, Ajloun, the Dead Sea, and Irbid. Jordan also has a plethora of industrial zones producing goods in the textile, aerospace, defense, ICT, pharmaceutical, and cosmetic sectors.

Jordan is pinning its hopes on tourism, future uranium and oil shale exports, trade, and ICT for future economic growth.