Economy of Jordan State
When it comes to grappling with the perilous state of Jordan’s economy, there are many factors which are out of the government’s control. But there are modest steps it can immediately take to set the country on the right path.
The Middle East’s recent history is teemed with political and social unrest, all of which has weighed heavily on Jordan and its economy. However, that has also made it easy for the country to not only absorb external chocks over time but also to create opportunities out of these challenges.
Some of these opportunities included accessing the WTO, being part of the EU partnership, and signing free trade agreements with the United States and Canada as well as many other countries.
Yet, despite its resilience, the global crisis of 2008 has hit the Jordanian economy in multiple ways. This has been further exacerbated by the eruption of the so-called Arab Spring. Facing the ongoing challenges in the region, the latest of which is the embargo of Qatar, and being somehow affected by the long lasting Eurozone and global economic setbacks put Jordan in a position that no one would like to be in.
Today’s official economic indicators show that Jordan’s economy is in a precarious position, with an 18 percent unemployment rate, a low growth rate of less than 2 percent, the highest youth unemployment rate worldwide at more than 30 percent, and the lowest global levels of female participation in the economy.
Nevertheless, the current government is taking steps to reverse the situation through better engaging the private sector and through some needed supply side enhancement policies. Hence, the economy is showing some real but slow improvements on several fronts, including economic growth, budget deficit, and public debt ratios. However, still the indicators related to employment and investment are not showing any substantial or even reasonable reversals.
Being in such a situation warrants suggesting the following steps that are deemed necessary to not only get the economy going but also to help create sustainable economic growth.
First, the government should immediately launch a sovereign investment fund of at least JD100 million to finance micro and small enterprises. The fund should encourage young Jordanians from both genders, with special attention to women, to engage in any project and provide them with funding between JD1,000 to JD10,000. It should also disburse the funding immediately. Secondly, there is a genuine need to activate the national sovereign fund that was launched between Jordan and Saudi Arabia to fund mega infrastructure projects and some local municipality projects that could help create new jobs and encourage new joint ventures.
Finally, we should also push for a real revitalization of the special economic zone in Aqaba and the three other economic development zones in Maan, Mafraq and Irbid. This has to take place immediately with proper funding and genuine projects under PPP agreements.
Funding these projects should not be an issue—all that’s needed is the political will. The implementation plan or road map can easily be achieved once the government shows it means business.