Jordan – Economy Overview

• Capital: Amman
• Area: 89,342 km²
• Population: 6,198,677
• GDP (PPP): US$28.079 billion
• GDP (Nominal): US$15.833 billion
• Currency: Jordanian dinar
• Time Zone: GMT+2

Since its birth as a country Jordan has managed to improve its economic situation immensely, despite being a rather small country with few natural resources. In the 1970s Jordan experienced a major growth spurt with GDP per capita skyrocketing by over 350%. Unfortunately this tremendous growth proved unsustainable and shrank by 30% during the 1980s. Since 1987, Jordan has been struggling with rising unemployment and substantial debt. The government attempted to raise revenues in 1989 by increasing the prices of certain products and utilities, which only served to trigger riots in the southern regions of the country. However, the politically unstable atmosphere that permeated the country in the aftermath of these riots was crucial in preparing the ground for Jordan's shift toward democracy. The 1990-91 Gulf War furthered the damage to the Jordanian economy, with the tourism trade becoming virtually nonexistent, limits placed on economic relations with the Gulf States, and UN sanctions implemented against Jordan's biggest trading partner at the time - Iraq. Despite this, after the end of the war, Jordan managed a remarkable rebound with an overall growth of 36% in the 1990s.

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Only about 10% of Jordanian land is arable for farming, and even these small pieces of land are at the mercy of a limited and unsteady water supply. The rainfall in Jordan is low and highly unpredictable, and most of the available ground water is not renewable. The country's economy is based on the production of phosphates, potash, and their fertilizer derivatives. Other sources of income include tourism and much needed foreign aid. With no forests, hydroelectric power, coal reserves, or any significant oil caches, Jordan has to rely on natural gas for as much as 10% of its energy needs. Iraq used to be a major source of import for oil until the US invasion of Iraq in 2003. Like many of its neighbors, Jordan is still classified today as an emerging economy.

Industry

Jordan's industrial sector accounts for about 26% of the country's GDP. The sector includes mining, construction, manufacturing, and power. The main products of the industrial sector are phosphates, potash, cement, pharmaceuticals, fertilizers and clothes. Construction seems to be the fastest growing of these industries and the most promising one for the future, seeing as in the past few years there has been increasing demand for housing and offices. The manufacturing sector has also experienced significant growth, largely due to the United States–Jordan Free Trade Agreement signed in 2001.

Agriculture

The Jordanian agriculture sector is now in steady decline, accounting for a mere 2.4 percent of the national GDP in 2004. The most thriving segment of the country's agriculture is fruit and vegetable production which are grown in the Jordan Valley. Other crop production remains unstable due to the variability of rainfall in Jordan. Other agricultural industries include fishing and forestry but these are rather negligible in terms of their contribution to the overall national economy.

Energy

Jordan has no oil significant oil resources of its own and has to rely heavily on imports from its neighboring countries that are rich in oil. Due to rising oil prices Jordan's policy is now centered on becoming more autonomic in providing for its domestic energy needs. This is being done by increased reliance on natural gas for fuel, in place of costly foreign oil. The government has also invested increased funds into researching methods of utilizing the country's abundant oil shale resources. Oil shale is a fine-grained sedimentary rock that contains significant amounts of kerogen, from which it is possible to extract liquid hydrocarbons. Finding a way to decrease the costs of manufacturing oil from oil shale can serve as a fine solution for Jordan's dependency on imported oil.

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