The Hashemite Kingdom of Jordan is one of the countries that have adopted the philosophy of economic openness. Its signs appeared clearly over last years. This is clear in the economic development in various fields including industrial, economic, tourist, agricultural, investment fields. Actually, Jordan has succeeded to be a "model" for open modern country coping with the international economy as well as development. Such progress has facilitated its way to be an attracting place for investment along with building a real partnership between the public and private sectors. The best evidence for such augmentation is the language of figures that is well known in economics. The Department of Statistics (DOS) in Jordan has issued a report about the foreign trade within which it stated that the value of national exports during year of 2010 has reached 4214.8 million Dinars, with a growth percent of 17.8 % over the year of 2009.
There is no doubt that Jordan has applied the philosophy of open economy to the world. It also practiced a positive attitude in dealing with trade partners based on principles of equivalence and achievement of common interests successfully. Actually, the main indicators for Jordan economic performance in 2010 revealed good results in spite of the drastic challenges that have faced the Jordan economy together with the repercussions of the global financial crisis. The domestic product has achieved growth while the foreign investments continued to flow and Jordan has managed to attract great Arab and international investments.
The industrial sector is one of the most important sectors forming the Jordan economy as it provides directly about a quarter of the gross domestic product. It is also associated with many of the other economic sectors. It encompasses a part of the work force in Jordan providing for them the qualification as well as training. This leads to increasing the rate of technical efficiency and production. The rate of labor working in the industrial sector is about (15%) out of the total manpower. In this way, it participates in covering a part of the trade balance deficit through its exports that constitute a significant part in total exports of which the industrial exports are rated with (90 %) out of the total commodity exports.
Industries in Jordan are divided into three main sectors as follows:
Manufacturing industries: such industries hold about (20 %) of the gross domestic product. This sector is subdivided into: medicine and medical equipments industry, plastic and rubber industry, chemical and cosmetics industry, leather and clothing industry, wood and furniture industry, engineering, electric and information technology industry, constructive industry, ration and food industry, and packaging and wrapping of paper, carton and office supplies industry.
Extractive industry sector: It includes mining industry and contributes with 3.0 % out of GDP.
Electricity and water sector: It holds 2.0 % of the GDP.
Jordan has taken large strides toward the economic and trade liberation together with reinforcing the market mechanisms, encouraging the spirit of individual initiative and achievement. Such paces have contributed to activating the role of private sector in leading the economic activities, strengthening the environment of economic freedom, and forming a modern organizing environment directed to investment as well as production.
The dependence of so many countries on tourism as a source for national income has become an issue of importance as well as "priority". Consequently, most of countries have organized their tourism agenda in a way that enables them to get outcomes in the tourism industry. In fact, Jordan has endeavored in terms of its long-term plan in the tourism industry. As a result, it has achieved good results over the last years in various tourist fields including leisure, cultural, religious, and medical tourism. Actually, tourism with all its various types depends on many factors including the tourist product, human resources, management, financing and marketing.
Jordan has witnessed a real development in locations of urban heritage as being the best source for tourism. It started with understanding the significant relation between tourism and locations of urban heritage. Such importance lurks in manifesting the culture of different civilizations. As per the data of the Jordanian Ministry of Tourism, the number of tourists who have visited Jordan in 2010 reached about 8 million tourists. Most of them are from Arab as well as foreign countries, while the Saudi Arabians and Americans have been the majority. The financial income in this year has been 2.5 billion Jordanian dinars.
Agriculture is the main backbone of development with its economic, social and environmental dimensions. The environmental aspect in Jordan has gained a prominent place in terms of the preservation of biodiversity as well as environmental balance. This is done in a way that guarantees preservation of resources together with preservation of rights of the coming generations and protecting the sustainable development conditions.
Jordan depends on agriculture as an economic base of integrated rural development through investing in the available natural resources, generating job opportunities for rural people, and providing primary resources for agricultural manufacture. In addition, reinforcing the complimentary economic connections with the other sectors of economy can also help in such task.
Moreover, Jordan is greatly relying on agriculture so that it can increase exports to enhance its self independence and decrease the deficit in the agricultural trade balance. The agricultural exports reach about 15.3 % of the total Jordan exports. It depends in its exports on vegetables as one of the most profitable agricultural crops which is most requested and "promoted" in the foreign markets. Actually, the exports of vegetables have achieved the highest value among exports during 2010. The value of agricultural imports has obviously increased; including barley and wheat reached the highest value. However, milk and dairy products ranked the third level after rice and sugar.
Jordan’s Foreign Trade Policy:
The Jordanian foreign trade policy derived its general frame from economic openness approach. In a record time, the country has been able to reinforce its economic and trade relations with the sister Arab states under the agreement of Greater Arab Free Trade Area together with some other free trade agreements on the bilateral level with Arab countries. In addition, it entered into partnership agreement with the European Union and a free trade agreement with the USA after being efficiently joined the World Trade Organization. It has also signed free trade agreements with states of AFTA and Singapore. Jordan has progressed toward signing a number of agreements of protection, encouraging investment, preventing double taxation with a number of Arab as well as foreign countries, aiming at providing an attractive environment for investment. Actually, Jordan has signed more than 32 accords of bilateral investment and 29 agreements of preventing double taxation. In addition, it inked agreements of trade and economic cooperation with trade partners in various geographical locations in the world. Under such agreements, the legal frames for mutual trade exchange have been set together with the establishment of supreme, ministerial and technical common committees that hold meetings periodically. This is under the aim of enhancing as well as developing the trade and economic relations between Jordan and its commercial partners and getting off any difficulties facing Jordanian exports and investments abroad.
The Jordanian Department of Statistics (DOS) has issued a report concerning foreign trade in Jordan. Such report indicates that the value of national exports in 2010 is JD 4214.8 million with increase of 17.8 % in 2009, while the value of the re-exported reached JD771.6 million, a decrease of $ (18.5%) compared with 2009. Therefore, the total of exports has amounted 4986.4 million dinars with increase of 10.2 % and the imports have amounted to 10836.2 million dinars in 2010 with increase of 7.2 %.
As for the deficit in the trade balance, which represents the difference between the value of imports and the total value of exports, has amounted 5849.8 million dinars in current prices. In this way, the deficit rose in 2010 by 4.8 %, compared with the same period of 2009. In addition, the total exports coverage over imports reached 46 %, while it was 44.8 % for the same period of 2009. Therefore, it indicates an improvement in the coverage by 1.2 %.
Challenges facing Jordan
To tell the truth, one of the most drastic challenges facing Jordan is scarcity of water resources, drinking water in particular. However, the country works on great projects to avoid such problem including executing the great strategic project with the Turkish (Gama) company to convey Disi water to provide water for Amman. It also works on other projects to overcome such constrain. The other defy is energy. Jordan followed a wise policy to liberate this sector by endeavoring to carry out great strategic projects in the field of providing renewable and alternative energy using in particular the nuclear energy for peaceful purposes, using Uranium, projects of using the wind power as well as the oil shale.
There is also a vital project in exploiting the Egyptian natural gas for generating electricity, in addition to a project, known as Dead Sea – Red Sea cannel project for generating electricity from the renewable power of water.
Investment in Jordan … A way towards Success:
Accessing new markets is the most important incentive of investment in light of the current economic conditions. As Jordan has a strategic location at the core of the Middle East and Northern Africa and represents the region point of departure; through Jordan, one can reach the MENA fast developed countries. In addition, the country is an entrance to the Iraqi Market which has been developed greatly, particularly at the period of rebuilding. It also provides a fulcrum point to get into the world markets through a number of free trade agreements. Moreover, Jordan has a various collection of investment; as it could be in the bank sector which is one of world’s most successful bank, in the pharmaceuticals sector whose sales exceed $ 1 billion in Jordan, in the industrial sector with its various types, in tourism or agriculture or in any other sectors. The Hashemite Kingdom of Jordan insists on achieving success in these various sectors by providing a package of good incentives and laws to the investor.
The direct foreign investments are still flowing to Jordan that succeeded in attracting great Arab as well as international investments, thanks to the wise investment policies that distinguish Jordan as being the safe area for investment as well as the political and economic stability. Moreover, it is due to the financial and cash stability, proper banking procedures, transparency, and continuous supervision of the Central Bank. Therefore, investment in Jordan is in its way towards success.