Economy
From The Report: Jordan 2012
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As the economy faces short-term challenges of low growth and a tight fiscal position, preparation is under way to support long-term recovery and lay foundations for the encouragement of investment as new sectors open up, notably in infrastructure and energy. Jordan faces several short-term challenges it must overcome to lay the foundations for when growth is expected to pick up from 2013. It must secure cheaper energy through an agreement with Egypt for regular supplies of gas and must reform subsidies to reduce non-productive expenditure and instead boost spending on education and infrastructure. If 2012 looks to be a year for scoping out investment opportunities and laying foundations for the future, 2013 should see the start of several new large-scale development projects and a return to stronger economic growth.

This chapter includes interviews with Awni Al Rushoud, Acting CEO of the Jordan Investment Board; Maen Nsour, Director-General of the Social Security Corporation; and Umayya Toukan, Minister of Finance.

Articles from this Chapter

Overview

Balancing priorities: Working to maintain growth in fiscally challenging times
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Facing low growth and a mounting fiscal burden, policymakers in Jordan are making preparations to support long-term economic recovery and to encourage greater investment in emerging business segments such as infrastructure and energy. Just as recovery from the effects of the global financial crisis seemed on the horizon, the Arab Spring reinforced many of the economic strains felt during 2010, and problems with energy supplies from Egypt forced the government into a tight fiscal position,…

Analysis

Extended reach: Strengthening international trade ties
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International relations are pivotal to Jordan’s economic wellbeing. Equally, the international community is aware of the importance of supporting the country within a potentially volatile regional climate. While annual grants help Jordan balance the books, technical assistance programmes and trade agreements are helping to increase economic development. The kingdom has long had to deal with regional conflicts in the Palestinian territories and Iraq, and now faces challenges as a result…

Interview

OBG talks to Maen Nsour, Director-General, Social Security Corporation
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Interview: Maen Nsour How can you balance social welfare provision with long-term efforts to reduce budget deficits and the size of the public sector? MAEN NSOUR: One of the foremost challenges facing the Jordanian economy is its budget deficit, which is expected to reach 6.2% of GDP in 2012. Budget shortfalls are mainly driven by increases in the trade deficit, which has grown due to the surge in global oil and commodity prices. During the first half of 2011, Jordan’s oil imports reached JD1.6bn…

Analysis

Time to review: Revised tax legislation should help reduce fiscal pressure
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Amid rising debt and reduced growth, the government is working to balance measures to boost revenue and stimulate the economy with efforts to reduce public spending. In a delicate political climate, the government is undertaking a review of fiscal legislation in an attempt to carefully rebalance, rather than completely overhaul, key taxation and subsidy legislation. According to official figures from the Income and Sales Tax Department (ISTD), total tax revenue reached JD2.76bn ($3.9bn)…

Analysis

A more competitive workforce: Building workers’ skills and attempting to increase employment
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While Jordan is known throughout the region for the high quality of its education, the emigration of thousands of Jordanians to opportunities in the Gulf and further afield each year results in a drain of highly skilled workers. At the same time, the domestic supply of jobs has only just kept pace with demand, indicating unemployment would be higher without emigration. Government-led programmes are attempting to increase employment and raise the low rates of economic participation by both…

Viewpoint

Umayya Toukan, Minister of Finance, on the continued effort to implement economic reform programmes
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As most countries seek to stimulate economic growth in response to widespread stagnation, the topic of economic reform once again has taken centre stage. Jordan has been introducing various economic reform programmes since the early 1960s; however, most of these efforts were interrupted due in large part to region political instability and military conflicts. Jordan’s most successful economic reform programme was implemented between 1989 and 2002, with the support of the International…

Analysis

Neighbourly ties: Trade and investment between Jordan and Iraq are growing
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While Iraqi residents of Jordan drive demand across the kingdom’s economy, Jordanian businesses also have an important role to play in the stabilisation and reconstruction of Iraq, especially following the withdrawal of US troops from the country in 2011. Jordanian investors remain hesitant about their neighbour’s security situation and complex business environment, but some have now begun to invest in northern Iraq and the two governments are working to remove barriers to trade. TRADE…