Jordan Economy

Phosphates

The phosphorite deposits in the south of the country have made Jordan one of the largest producers and exporters of this mineral in the world. ^[1] Phosphorites were first discovered in 1935 in the phosphorite-bearing basin of Er-Ruseif. ^[2] Phosphate deposits are Jordan's main natural resource and one of the main sources of foreign exchange earnings from exports. According to various estimates, probable reserves vary from 1.5 billion to 2.5 billion tons. Since 1986, phosphate sales have reached $ 185 million, accounting for 25 percent of export earnings and 10 percent of the global market. ^[3]

Jordan is the world's third-largest exporter after Morocco and the USA, producing 8 million tons per year and controlling 5% of the world market. Phosphorite is also the main raw material for the local fertilizer industry. The main phosphorite deposits are located in Al-Hasi , in the middle of the road between Amman and the port of Aqaba . Phosphorite is also mined northwest of Amman . ^[four]

Potassium salt

Potash is an important component of the Jordanian mining sector. Potash is extracted from the Dead Sea and is the lowest cost in the world, in part because solar evaporation is used. ^{[5] The} country is one of the ten world leaders in the production of potash salt. In 2011, 1380 tons were produced, in 2012-1400. Reserves are estimated at 40,000 tons. ^[6]

Water

Studies prove that Jordan runs the risk of rapid desertification. It receives little rainfall - 90 percent of the country receives less than 200 mm per year. Deforestation, soil erosion, improper land use and cultivation, climate change and drought, rapid urbanization - all this leads to increased desertification. The project, funded by the NATO Science for Peace and Security (SPS) program funds, addresses these issues. Scientists are conducting research in the Yarmouk River Basin, over 1,400 square kilometers in the Badia region. Most of the territory is at risk because high rates of soil loss due to wind and water can lead to desertification. ^[7] The most serious environmental problem that Jordan faces today is water scarcity. The high level of natural population growth, combined with periodic mass influxes of refugees, has turned the average balance between the population and the volume of water in the first half of this century into a chronic imbalance in the second half. Most experts believe that countries with water consumption below 1000 cubic meters per year (per capita) are water-deficient. By 2025, if current trends continue, per capita water supply will drop from the current 200 cubic meters per person to 91 cubic meters, which will classify Jordan as a country with an absolute lack of water. ^[eight]

According to the World Bank classification , Jordan belongs to the countries “with incomes above the average. ^{[9] The} Jordanian market is considered one of the most developed Arab markets outside the Gulf countries. ^[10] Jordan ranks 18th in the world in the Retail Development Index (2012) and ranks among the 30 most attractive retail markets in the world. ^[11] . The country is among the 20 most expensive countries for living in the world (2010) and is the most expensive among the Arab countries. ^[12] Jordan has been a member of the World Trade Organization since 2000. ^[13] According to the Global Enabling Trade report (2009), Jordan ranks 4th in the Arab world (after the UAE, Bahrain and Qatar) in terms of favorable conditions for the development of trade. ^[14] In December 2001, Jordan and the United States signed the Free Trade Agreement . ^[15] The industrial sector, which includes mining, energy production, and construction, accounts for about 30.1% of the gross domestic product (2012). Over 20 percent of the country's workforce is reportedly employed in industry (2012). The main industrial products are potassium salts, phosphates, pharmaceuticals, cement, clothing, fertilizers. The most promising industry segment is construction. Over the past few years, demand for housing and offices of foreign companies based in Jordan has risen sharply. The manufacturing sector grew (almost 20 percent of GDP by 2005), largely as a result of the free trade agreement between the US and Jordan (2001); The deal led to the creation of approximately 13 industrial zones across the country. Industrial areas that provide duty-free access to the US market mainly produce light industry products, especially ready-made clothing. Until 2010, industrial zones accounted for nearly $ 1.1 billion in exports. ^[sixteen]

Jordan's Free Trade Agreement (FTA) with the United States — the first in the Arab world — has already made the United States one of Jordan’s most significant markets.

Exports of potassium salts and phosphates reached $ 1 billion in 2008. Other important industries include pharmaceuticals, (exports - $ 435 million in 2007), textiles ($ 1.19 billion in 2007). Although Jordan’s industrial output is high, the kingdom faces a number of challenges. Since the country depends on imports of raw materials, the economy is sensitive to price fluctuations. Lack of water and electricity also hinder the consistent development of the economy. Despite these challenges, Jordan's economic openness and fertilizer production with pharmaceutical products are a source of hard foreign exchange. ^[17]

Jordan has many industrial zones and special economic zones aimed at increasing exports and transforming Jordan into an industrial giant. The Mafraq special economic zone, focused on the logistics industry, can become a regional logistics hub with air, road and rail links with neighboring countries and ultimately with Europe and the Gulf countries. The Maan Special Economic Zone helps to meet domestic demand and reduce dependence on imports.

Energy remains the biggest challenge for further growth of the Jordanian economy. The lack of domestic resources in the country is resolved through an investment program in the industry. The program aims to reduce dependence on imported products from the current level (96%) using renewable sources (10% of energy demand by 2020 and nuclear energy (60% of energy needs by 2035). ^[18] Unlike most of its neighbors Jordan does not have significant oil resources and is heavily dependent on oil imports to meet its domestic energy needs. In 2012, explored oil reserves were only 445 thousand barrels (70,700 m3). Jordan produces only 40 thousand barrels per day in 2004, but approximately 103,000 barrels per day (16,400 m3 / day) are consumed.

Saudi Arabia is currently the main source of imported oil; Kuwait and the United Arab Emirates (UAE) are secondary sources. In the face of continued high oil costs, interest has increased in the possibility of using the huge shale resources of Jordan, which are estimated at about 40 billion tons. 28 billion barrels (4.5 km3) of oil can be produced from Jordan’s shale resources, which makes it possible to produce about 100,000 barrels per day (16,000 m3 / day). Shale reserves in Jordan are the fourth largest in the world. Currently, there are several companies that are negotiating with the Government of Jordan on the start of shale exploitation ( Royal Dutch Shell , Petrobras and Eesti Energia ).

Natural gas is increasingly being used to meet the country's domestic energy needs. Jordan is estimated to have natural gas reserves of about 6 billion cubic meters. In 2012, approximately 390 million cubic meters of natural gas was produced and consumed in the country. The main gas fields are located in the eastern part of the country. The country imports most of its natural gas through the Arab Pipeline, which extends from the El Arish terminal in Egypt to Aqaba , and then to the north of Jordan, where it links two large power plants. This Egypt-Jordan pipeline supplies Jordan with approximately 1 billion cubic meters of natural gas per year. ^{[19] The} national energy company produces most of Jordan's electricity (94%), and the country consumes nearly 8 billion kilowatt hours of electricity in 2003, producing only 7.5 billion kWh of electricity. Electricity production in 2004 grew to 8.7 billion kWh, but production must continue to grow in order to meet demand, which the government estimates will continue to grow by about 5% per year. About 99 percent of the population is reported to have access to electricity.

Despite the growth of production, the share of the agricultural sector in the economy is steadily declining (to 3.1% of gross domestic product in 2012). About 2.7% of Jordan's labor force worked in the agricultural sector in 2012. Jordan's most profitable agricultural sector is the production of fruits and vegetables (including tomatoes, cucumbers, citrus fruits and bananas) in the Jordan Valley. The remaining crop products, especially cereal production, remain unstable due to lack of precipitation. Fish farming and forestry have little development in terms of the overall domestic economy. The fishing industry is evenly divided between marine and river fisheries; live weight of the catch was just over 1,000 tons in 2012. The forest industry is even less economically. Approximately 240,000 cubic meters of forest were cut down in 2012, the vast majority for firewood.

Main crops: wheat, legumes, tobacco, corn, tomatoes, melons, olives, grapes, citrus fruits, bananas. A special part of agriculture is the cultivation of olives. Less than 10% of Jordan's land is plowed up; the country depends on food imports.

Wheat and barley are the main crops grown in the highlands where it rains, and citrus fruits, melons and vegetables (tomatoes and cucumbers) are grown in the artificially irrigated Jordan Valley . The area of ​​pastures in Jordan is limited, their fertility is enough only for raising livestock, in addition, the area of ​​pastures was reduced under oilseeds and fruit trees. To expand grazing, artesian wells were dug. Mostly sheep and goats are bred, in smaller volumes - cattle, camels, horses, donkeys, mules, poultry.

The transport sector averages up to 10% of Jordan's GDP, ($ 2.14 billion in 2007). The Jordanian state-owned airline, Royal Jordanian Airlines, carried about 1.3 million passengers in 2012, it has 16 aircraft at its disposal and operates more than 100 flights a week. ^[21] The country's largest airport - Queen Alia International Airport - is located 40 km south of Amman, the second international airport is in Aqaba. In 2011, 9.8 million passengers passed through all the country's airports.

The Jordan-Hijaz railway used goes from Dera'a to Amman and further south to Ma'an. Aqaba Railway Corporation operates a section of the road from Al-Aqaba to Batna al-Ghula, where it connects with the Hijaz-Jordan Road.

Jordan's railways are less than 700 km long. Jordan has a network of main, secondary and rural roads, almost all of them are paved. The construction and repair of roads is entrusted to the Ministry of Public Works. Roads connect not only the Jordanian cities, but also the kingdom with neighboring countries. One of the main transport arteries - the Amman-Er Ramt highway connects Jordan and Syria. Highway Amman - Ma'an - Al-Aqaba leads to the sea. From the Aqaba highway there is a branch to El Mudawwara and further to Saudi Arabia. Amman-Jerusalem highway accounts for the main flow of tourists.

Royal Jordanian Airlines, the official state airline, connects Jordan with the world. In 1983, Queen Alia International Airport was opened in Al-Jiz south of Amman. Amman and Al-Aqaba have smaller international airports.

As of 2016 ^{[22], the} volume of foreign trade amounted to:

• Exports: $ 8.65 billion: potash fertilizers ($ 665 million), wool products ($ 505 million), phosphates ($ 494 million), medicines ($ 483 million), clothing and agricultural products. Main buyers: USA 23% ($ 1.96 billion), Saudi Arabia 14% ($ 1.22 billion), India 9.8% ($ 847 million), Iraq 5.8% ($ 497 million) and United Arab Emirates 4.2% ($ 363 million).
• Import: $ 20.1 billion: automobiles ($ 1.27 billion), natural gas ($ 894 million), crude oil ($ 853 million), petroleum products ($ 793 million) and Wheat ($ 590 million), electronics and electrical goods, food, metal products and raw materials. Major suppliers: China 14% ($ 2.89 billion), Saudi Arabia 12% ($ 2.46 billion), USA 5.8% ($ 1.18 billion), United Arab Emirates 4.7% ($ 942 million). ) and Germany 4.4% ($ 888 million).

The services sector in 2012 accounted for 68.8% of GDP. 77.4% of the workforce was employed in this area (2007). The state of the tourism industry is below potential, especially given the recreational conditions. Over 5 million visitors visited Jordan in 2004 ($ 1.3 billion in revenue). The sector is controlled by the National Government Tourism Strategy (NTS), which was established in 2004. The NTS aims to double tourism revenues and increase jobs. The strategy identifies seven priorities or niche markets: cultural heritage (archeology); religion; ecotourism; health, accidents, meetings, incentives, conferences and exhibitions, cruises.

According to a recent Arabian Travel Market press release ^[23] , Jordan's tourism revenue in 2012 reached $ 3.47 billion. This indicates an increase in tourism revenue (compared with 2011) by 15.3% (by 347 billion US dollars in the economy). According to the Central Bank of Jordan, the increase in tourist income was due to visitors from Iraq, Libya and the United States in particular. ^[24]

The EU-Jordan Association Agreement was signed in November 1997 and entered into force on May 1, 2002. Оно постепенно устанавливает зоны свободной торговли между ЕС и Иорданией в течение 12 лет. Кроме того, Соглашение о дальнейшей либерализации сельскохозяйственной продукции вступило в силу в 2007 году. После Саудовской Аравии, ЕС является вторым торговым партнером Иордании — с общим объемом торговли на сумму около 3,8 млрд. € в 2012 году. В 2012 году ЕС был вторым источником импорта Иордании и пятым по экспорту. Иордания является 63-м торговым партнером ЕС. ^[25]