The Jordanian economy's income is from the following sources:

•  Tourism

•  Remittances from Jordanians working abroad

•  Construction

•  Mining

•  Manufacturing

•  Foreign aid

In terms of its income the Jordanian economy is classified by the World Bank as a "lower middle income country". The reasons for this ranking are due to the following factors:

•  Lack of natural resources 

•  Dependency on external sources for energy imports 

•  High external debt 

•  Lack of high value export products 

•  Trade balance deficits (higher imports than exports in terms of value) 

As a result, since the year 2000 the Jordanian government has embarked on a economic reform program as means of improving the country's economic structure. The country's reform programs (including its present Socio - Economic reform plan) plus its agreed reform plan with the IMF include the following action points :

•  Prudent economic management (maintaining low inflation and continued build up of official reserves)

•  Privatisation and reform of the public sector

•  Improving the judiciary system

•  Promotion of the public-private partnership as means of increasing investment and quality of public services offered to Jordan's citizens

•  Improvement of the management of the public health and education services

•  Developing a knowledge based economic society (through developing computer literacy and access to Internet of Jordanian businesses, academia, and population at large).

•  Reducing employment through additional job creation

•  More efficient natural resource management, particularly for water

•  Improvement in social conditions and safety nets

The ultimate goal of the reform plan is placing the Jordanian economy on a stable progression path. Jordan's economy has been making slow progress owing to the reform package. Positive results which have emerged due partly to the reforms include:

•  Year 2003 - 2.8% GDP increase

•  Year 2003 - 5.5% GDP increase (IMF estimate)

•  Year 2004 - 5.5% GDP increase (IMF estimate)  

•  Accession to the World Trade Organisation (WTO)

•  Privatisation of government organisations (estimated to have earned USD $1 Billion for the Jordanian government for the year 2004)

•  Increased competition in privatised sectors such as the Telecoms industry

•  Reduced budget deficit (for year 2004)

•  FTA with the US

•  Association agreement with the EU

•  Qualified Industrial Zones (QIZ) for tax and quota free exports to the US

•  Increase in Manufacturing exports

•  Creation of new employment opportunities, especially at new QIZs

Such results are a testament that the Jordanian government's economic reform program is working. However work still remains to be done in areas such as reduction of the country's debt, reducing unemployment, managing increased expenditure needed to create social safety nets for Jordan's poor, increasing public sector efficiency and transparency and improving Jordan's Per Capita income. These are in addition to the other important goal of reducing Jordan's dependency on foreign financial assistance.  

Jordan's current leader King Abdullah II has so far demonstrated his commitment to the economic reform program for Jordan by appointing reform minded officials and through his backing of the reform plans. It is expected that the reform programs will continue under his leadership. Their success will depend on Jordanian persistence, foreign assistance (through investments in Jordan and increased trade) as well as regional stability .

Back