MONGABAY.COM
Mongabay.com seeks to raise interest in and appreciation of wild lands and wildlife, while examining the impact of emerging trends in climate, technology, economics, and finance on conservation and development (more)
WEEKLY NEWSLETTER
|
|
Jordan
Index
Mosaic of a man carrying a basket of grapes from the
Byzantine Church of Saint Lots and Saint Prokopius, Khirbat al
Muhayyat, ca. 550
JORDAN, A SMALL NATION with a small population and sparse natural
resources, has long been known by its Arab neighbors as their "poor
cousin." In the late 1980s, Jordan was compelled to import not only
many capital and consumer goods but also such vital commodities as
fuel and food. Officials even discussed the possibility of
importing water. Nevertheless, the Jordanian economy flourished in
the 1970s as the gross domestic product
(GDP--see Glossary) enjoyed
double-digit growth. The economy continued to fare well in the
early 1980s, despite a recessionary regional environment. Indeed,
by the late 1980s, Jordanians had become measurably more affluent
than many of their Arab neighbors. The 1988 per capita GDP of
approximately US$2,000 placed Jordan's citizens well within the
world's upper-middle income bracket.
Economic prosperity rested on three primary bases. Jordan's
status as the world's third largest producer of phosphates ensured
a steady--if relatively modest--flow of export income that offset
some of its high import bills. More important, Jordan received
billions of dollars of invisible or unearned income in the form of
inflows of foreign aid and remittances from expatriates. These
financial inflows permitted domestic consumption to outpace
production and caused the gross national product
(GNP--see Glossary)
to exceed the GDP. In the late 1970s and early 1980s, GNP
exceeded GDP by 10 percent to 25 percent. High financial inflows
from the mid-1970s to the mid-1980s allowed Jordan to maintain a
low current account deficit; in some years it registered a current
account surplus, without much external borrowing and despite trade
and budget deficits. Jordan's economy, therefore, demonstrated many
of the characteristics of wealthier and more technologically
advanced rentier economies. Jordan also capitalized on its
strategic geographic location, its educated work force, and its
free enterprise economy to become a regional entrepĂ´t and transit
point for exports and imports between Western Europe and the Middle
East. Because of these factors, it also became a magnet for foreign
direct investment, and a purveyor of banking, insurance, and
consulting services to foreign clients. Jordan's heritage as a
merchant middleman was centuries-old, dating back to the Nabatean
kingdom of Petra. Because the economy depended so heavily on the
professional service sector and remittance income from expatriates,
the government sometimes called Jordan's manpower the nation's most
valuable resource.
Jordan's economic strategy succeeded during the Middle East oil
boom of the 1970s. In the late 1980s, however, as the worldwide
plunge in oil prices persisted, economic problems emerged. Foreign
aid was cut, remittances declined, and regional trade and transit
activity was suppressed by lack of demand, leading to a
deterioration in the current account. The government was deeply
concerned about the economy's vulnerability to external forces.
Jordan's economy depended heavily on imported commodities and
foreign aid, trade, investment, and income. But because plans to
increase self-sufficiency were only in the early stages of
implementation, a short-term decline in the national standard of
living and increased indebtedness loomed as the 1990s approached;
observers forecast that austerity would replace prosperity.
Data as of December 1989
|
|