Economy of Jordan

Mother Earth Travel > Country Index > Jordan > Map Economy History

Jordan is a small country with limited natural resources. As only 4% of the land is arable, agricultural production is subject to the vagaries of a limited water supply, currently compounded by a 3-year drought. A water protocol with Israel has eased the situation to a certain extent, and the country is currently exploring other ways to expand its supply. Jordan depends on Iraq for most of its energy needs, although a pipeline that will bring natural gas from Egypt is nearing completion. While Jordan's economy has traditionally been centered on phosphates, potash, fertilizer derivatives, overseas remittances, tourism, and foreign aid, the government hopes to reinvigorate economic growth by focusing on information technology (IT), tariff-free export areas such as the Qualified Industrial Zones (QIZ) and the Aqaba Special Economic Zone (ASEZ), as well as expanding tourism.

In 2001, Jordan became the fourth nation to enter into a Free Trade Agreement (FTA) with the United States. The FTA will phase out duties on nearly all goods and services over a 10-year period. The agreement also provides for more open markets in communications, construction, finance, health, transportation, and services, as well as strict application of international standards for the protection of intellectual property rights. Jordan also has signed trade-liberalizing agreements with the European Union and some of its neighbors in the region. In 2000, it acceded to the World Trade Organization.

As elsewhere in the region, tourism was impacted by the combination of renewed violence on the West Bank/Gaza and the September 11, 2001, terrorist attacks in the U.S. A heavy debt burden and a large public sector continue to be challenges to economic growth in the Kingdom. Despite some progress, red tape and a still developing legal system remain obstacles to foreign investment.

Real GDP, which grew 3.2% in 2000, is expected to increase by 4.1% in 2001. Jordan's high population growth rate has fallen to 2.8%. The official unemployment is at 16% but may well increase as the impact of the tourist slump ripples through the economy. Inflation continues to be low, and monetary stability remains a priority of the Central Bank of Jordan.

While pursuing economic reform and increased trade, Jordan's economy will continue to be vulnerable to external shocks and regional unrest. Without calm in the region, economic growth seems destined to stay below its potential.

GDP: purchasing power parity - $17.3 billion (2000 est.)
GDP - real growth rate: 3.2% (2000 est.)
GDP - per capita: purchasing power parity - $3,500 (2000 est.)
GDP - composition by sector:
agriculture: 3%
industry: 25%
services: 72% (1998 est.)
Household income or consumption by percentage share:
lowest 10%: 2.4%
highest 10%: 34.7% (1991)
Inflation rate (consumer prices): 0.7% (2000 est.)
Labor force: 1.15 million
note: in addition, at least 300,000 workers are employed abroad (1997 est.)
Labor force - by occupation: industry 11.4%, commerce, restaurants, and hotels 10.5%, construction 10%, transport and communications 8.7%, agriculture 7.4%, other services 52% (1992)
Unemployment rate: 16% official rate; actual rate is 25%-30% (2000 est.)
Budget:
revenues:  $2.8 billion
expenditures:  $3.1 billion (2000 est.) 
Industries: phosphate mining, petroleum refining, cement, potash, light manufacturing, tourism
Industrial production growth rate: 3.8% (2000 est.)
Electricity - production: 6.657 billion kWh (1999)
Electricity - production by source:
fossil fuel:  99.79%
hydro:  0.21%
nuclear:  0%
other:  0% (1999)
Agriculture - products: wheat, barley, citrus, tomatoes, melons, olives; sheep, goats, poultry
Exports: $2 billion (f.o.b., 2000 est.)
Exports - commodities: phosphates, fertilizers, potash, agricultural products, manufactures
Exports - partners: India, Iraq, Saudi Arabia, EU, Indonesia, UAE, Lebanon, Kuwait, Syria, Ethiopia
Imports: $4 billion (f.o.b., 2000 est.)
Imports - commodities: crude oil, machinery, transport equipment, food, live animals, manufactured goods
Imports - partners: Iraq, Germany, US, Japan, UK, Italy, Turkey, Malaysia, Syria, China
Debt - external: $8 billion (2000 est.)
Economic aid - recipient: ODA, $850 million (1996 est.)
Currency: Jordanian dinar (JOD)

SOURCES: The World Factbook, U.S. Department of State

Mother Earth Travel > Country Index > Jordan > Map Economy History