|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.
purchasing power parity - $17.3 billion (2000 est.)
SOURCES: The World Factbook, U.S. Department of State
Mother Earth Travel > Country Index > Jordan > Map Economy History