Wednesday night's attacks on three hotels in the heart of Amman are expected to slowdown the economic boom Jordan had experienced in the past two years. A flood of Iraqi refugees and their money have boosted the economic prosperity in the kingdom.
Some bankers claim the wave of wealthy Iraqis has brought an extra $2 billion into Jordan. The influx has boosted the real estate sector as well as sales of consumer goods. If Wednesday event is to remain as an isolated event, the economic damages could be limited, experts believe.
Jordan's economy was always linked to regional developments and foreign aid. Lacking oil and valuable natural resources, trade and aid involving foreign and Gulf states were vital for the kingdom's economy.
Since the U.S. launched its attack on Iraq in March 2003, Amman's population has grown by as much as a third. Jordan's economy grew at a nearly 8% annual rate in the first half of this year, double the pace before the war, the WSJ reported. The market capitalization of the Amman Stock Exchange has more than tripled to $37 billion in just two years.
Hours before the blasts, Jordan released another positive indicator; Exports rose by 12.1 per cent to reach JD1907.3 million during the first nine months of 2005 compared to 1701.9 million during the correspondent period of the year before. The U.S. ranked first among world countries importing goods from Jordan importing 31.2% of the country's total exports.
Generally speaking, since 2000, exports of light manufactured products, principally textiles and garments manufactured in Jordan's Qualifying Industrial Zones (QIZ) that enter the United States tariff and quota free, have been driving the country's economic growth. Jordan exported $6.9 million in goods to the U.S. in 1997, when two-way trade was $395 million; it exported $1.02 billion in 2004, with two-way trade at $1.57 billion and $636 million respectively.
One sector, which certainly will suffer is Jordan's tourism and hotel sector. Tourism is an important source of income and jobs. The bombings came as a severe blow to the authorities after the Kingdom has been exerting huge efforts in the past few years to sustain its tourism economy amidst regional turmoil (Iraq, Palestine).
Tourism is the second largest revenue earner in the Kingdom, accounting for nearly 12% of the Jordanian GDP in 2004. According to figures, published by the Jordanian press, tourism revenues went up by almost 11% in the first half of this year. Before the explosions, tourism receipts were expected to post a record $1.4 billion by the end of the current year.
Due to the fact that Jordan established itself as a gateway and supply route for Iraq, even during Saddam Hussein's years, Jordanian hotels had been enjoying a golden era following his ouster. Hotels in Amman constituted a "stop over" for Westerners, journalists, businessmen, politicians, aid workers and diplomats ahead of their trip to Iraq. Jordanian hotels also became the preferred venue for Iraqi businessmen making deals with their Western and Arab partners.
