Historical Encyclopedia
Jordan, despite its small territory and limited natural resources, is an important economic power in the Middle East. The country has developed sectors such as industry, finance, tourism, and information technology. In recent decades, Jordan has faced several economic challenges; however, it has managed to maintain stability and continue on the path to economic development. In this section, we will examine key economic data and trends that shape Jordan's economy, as well as the factors influencing the economic situation in the country.
Despite experiencing difficulties, Jordan's economy continues to develop steadily. The country has limited natural resources, such as water and minerals, which forces its economy to rely on service exports, tourism, finance, and industry. Jordan is not a major producer of oil or gas, which limits opportunities for creating stable sources of income from energy resources. This makes the country dependent on energy imports, affecting its foreign trade and balance of payments.
Nevertheless, Jordan has been able to develop several key sectors, such as agriculture, textile and chemical industries, as well as information technology. The country also actively utilizes its strategic geographic positions to develop transportation and logistics infrastructure, allowing it to play an important role in the regional economy.
Jordan's Gross Domestic Product (GDP) has demonstrated moderate growth rates in recent years. In 2023, the country's GDP was approximately 46 billion US dollars, with a growth rate of around 2.1%. The structure of Jordan's GDP largely depends on the service sector, which accounts for over 60% of the total economic activity. This includes both the domestic service market and export services such as medical services, education, and tourism.
The industrial sector constitutes about 30% of GDP, including key industries such as phosphate production, cement, pharmaceuticals, and textiles. Agriculture plays a smaller role in the economy but remains an important source of food security and employment for the rural population.
Jordan is also actively developing its information technology and startup sector, which contributes to economic growth in high-tech and innovation domains. Although Jordan has limited natural resources, it bets on human capital and education development, which stimulates the creation of new jobs and attracts foreign investment.
Unemployment in Jordan remains one of the main economic challenges, especially among youth and women. In 2023, the unemployment rate was about 23%, one of the highest figures in the region. High unemployment is largely linked to a lack of job opportunities in high-skilled industries and limited employment prospects in traditional sectors of the economy. Unemployment among youth and women is even more pronounced, creating additional social tension in the country.
Low wage levels in Jordan also affect the overall quality of life. Despite moderate economic growth, many residents face challenges related to housing and education affordability. However, it is worth noting that government social support programs, along with low prices for essential goods and services, help to alleviate these difficulties.
In recent years, Jordan has actively worked to improve the quality of life for its population. One important direction is enhancing education quality, developing healthcare, and improving infrastructure, which should help reduce poverty and unemployment levels in the long run.
Jordan has an open and trade-oriented economic structure. The country’s main trading partners are Arab countries, the USA, EU countries, and China. Jordan actively exports phosphates, chemical products, agricultural products, and textiles, while its main imports include oil, electronics, machinery, and consumer goods.
Jordan has signed several trade agreements with neighboring countries and international organizations, significantly expanding its export capabilities. One such agreement is the free trade agreement with the USA, which has opened access for Jordanian companies to the American market. This has also contributed to the development of sectors like pharmaceuticals and textiles.
Jordan is actively attracting foreign investment, particularly in the fields of information technology, healthcare, and tourism. The country offers various tax incentives and other forms of support for foreign investors, which facilitates job creation and stimulates economic growth. Startups in the technology sector are particularly flourishing, helping to strengthen the economy and enhance its competitiveness on the international stage.
Jordan's public finances are under pressure due to a high level of public debt and budget deficit. In recent years, public spending has increased, especially related to the need to fund social programs and assist Syrian refugees, who make up a significant portion of the country's population. Jordan, hosting over 1.3 million Syrian refugees, faces additional economic challenges in providing for their basic needs such as housing, healthcare, and education.
In response to these challenges, Jordan is actively working on reforming its public governance system, aiming to reduce the budget deficit and improve the quality of public services. One such step is to increase taxes and improve tax administration, which should help reduce reliance on external borrowing and ease financial burdens.
Despite the economic difficulties, Jordan continues to develop its financial institutions, attracting international assistance and loans from the World Bank, IMF, and other international organizations. These resources are directed towards developing infrastructure, education, and other key sectors of the economy.
Jordan looks to the future with cautious optimism, despite the economic challenges. The country continues to develop sectors such as technology, tourism, pharmaceuticals, and education, which allows it to gradually reduce dependence on natural resources. One of the main priorities for the Jordanian government is to develop human capital through improving the quality of education and healthcare, as well as creating new job opportunities for youth.
Government efforts to attract foreign investment, develop infrastructure, and integrate Jordan into the global economy should contribute to the country's growth in the future. It is also important that Jordan continues to work on strengthening its position as an important transportation and logistics hub in the region, which can attract additional economic opportunities.
Jordan has every chance for further economic development if it can effectively address internal problems such as high unemployment and budget deficits. The development of innovative technologies, improvement of social infrastructure, and attracting investments in promising sectors will be key factors for the country’s prosperity in the future.