Jordan looks near and far for economic growth

The DoS report, cited by the Jordan Times, reveals Jordan's overall export trade is in pretty good shape. The kingdom shipped $4.1 billion worth of goods last year, a 12.9 per cent lift on 2005's figures and, if re-exports are included in the mix, the total rises to $5.1 billion, a jump of more than 20 per cent. But what, ultimately, will cause concern is the fact that, despite these respectable increases, Jordan's trade deficit actually widened by 1.3 per cent to approach $6.4 billion.

Facts and figures

The statistics also show that, in 2006, the US imported close to $1.3 billion worth of Jordanian products, 31.2 per cent of total exports, with clothing making up the overwhelming majority of the goods purchased. Iraq provided Jordan's second biggest export market but at $465 million, and 11.3 per cent of total exports, the US's dominance is clear to see. Indeed, Jordan's exports to its troubled neighbour actually fell almost 14 per cent and it needed a lift of well over $100 million in additional exports to another neighbour, Saudi Arabia, to more than make up for the shortfall.

Saudi, unsurprisingly, is another key player in Jordan's trade dealings and its vast energy resources accounted for 80 per cent of the $3 billion worth of imports Amman received last year; no other country came close to this total, with China, which provided $1.2 billion worth of goods, a distant second. By comparison, imports from the US made up just 4.7 per cent of total imports and cost Jordan $547 million.

US assistance and reticence

Between the 2001 implementation of the Jordan-US free trade agreement and 2005, the American Chamber of Commerce in Amman has calculated that the kingdom's exports to the States rocketed by 453 per cent, while imports, despite their relatively small proportion, grew by 18 per cent year on year.

The US has also, of course, long been a provider of economic aid to Jordan and, just last month, the US Embassy in Jordan revealed over $500 million was supplied to the kingdom last year as either financial or military assistance. Indeed, since 1952, the US has given Jordan a total of $4.7 billion. Last year, $130 million of the donated funds were directed to an assortment of USAID programmes which are designed to build up infrastructure and boost the private sector.

Despite booming trade links and governmental support, it is significant to note that the US's private sector doesn't seem to share the same enthusiasm for Jordan. According to figures from the Jordan Investment Board and quoted by the Jordan Times, only $31.2 million was pumped into the economy from US and Canadian investors in the first nine months of last year, with most investment coming from the Gulf.

Local contributions

It therefore makes sense that the JIB is keen to promote the Second Arab Gulf Forum which takes place in April and which will showcase more than $140 million worth of potential investment projects in the kingdom. Western companies may be holding off investing in Jordan, but the country is more than happy to leverage its position as an attractive, local option for interested parties.

At the end of January, Jordan's Industry and Trade Minister Salem Al Khazaleh played host to his Kuwaiti counterpart in a bid to boost bilateral trade and generate further investment. Amman's exports to the Gulf state amounted to only $84 million in the first ten months of last year but, of rather more note, Kuwait has so far invested more than $6 billion in Jordan.

One key issue that was stressed by the Jordanian officials was the hope that Kuwait would give its backing to the successful conclusion of free trade agreement negotiations between the kingdom and the GCC. If Jordan can cement a deal with its rich neighbours in the Gulf then, alongside its expanding trade ties with the US, Jordan could find itself sitting pretty.