Even under the best of circumstances, real economic growth rate in Jordan this year will not exceed three per cent. This is a rather low rate if compared to much higher growth rates achieved by the economy during the past several years, when the average was around seven per cent.
Some observers, however, believe that in view of the prevailing circumstances in the region, the mere fact of achieving positive growth is in itself a success that deserves to be celebrated. All countries that experienced the Arab Spring suffered negative growth in their economies, sometimes to a painful degree.
Jordan is believed to have weathered the political and social risk that rocked Arab Spring countries. It restored the state of political and social stability. It is only normal under the circumstances to expect the rate of economic growth to rise next year, perhaps to 5 per cent.
A growth rate in the gross domestic product of up to 5 per cent next year is rather an ambitious target and cannot be attained just like that. Motivation, stimulation and investment efforts are needed to make it happen. The generous grant of the Gulf states may make such an objective attainable.
Jordan needs a higher economic growth rate, not only to maintain the standard of living of its fast growing population, but also to reduce the high rate of unemployment, especially among young people and women, not to forget or ignore the heavy burdens facing the economy in view of the extensive influx of Syrian refugees.
The above issues we are so far dealing with are of a general nature and can in fact be taken for granted. The hard question that imposes itself on economic and decision makers is: How can a higher economic growth rate be achieved despite the current limitations?
Let us leave generalities for a moment to delve into the status of certain sectors that comprise the national economy as well as to the fiscal, monetary and trade balances, to identify the weak points and distortions in an attempt to do something about them.
Beside an overall plan of economic growth, officials need to study the state of affairs of the individual sectors of the economy, one at a time, to identify the challenges and difficulties and try to come up with answers. An obvious example is the mining sector, potash and phosphate, which suffers internal and external problems that deserve attention.
The trade balance has also a serious structural weakness. National exports do not make up more than one third of the value of foreign imports. This is obviously not only abnormal but also an unsustainable state of affairs. To make things even worse, exports are either decreasing or stagnating, while imports continue to grow at a rate faster than the rate of growth of the economy.
By Fahed Fanek