Jordan has to diversify its export markets and not lock itself to one trade partner, said a senior World Bank economist earlier this week.
Speaking in a seminar on Jordan's Balance of Payments and Budget, Julia Devlin said that the Kingdom should end reliance on Iraq as a major trade partner, and called for expansion to other markets.
“Iraq does not have much choice at the moment, but once the sanctions are lifted it can import its needs from anywhere,” stressed Devlin.
“It's more advantageous to move to new outlets in the medium and long run,” she told the seminar, part of a one-week training workshop for economic reporters, sponsored by the World Bank.
Iraq was Jordan's biggest trading partner before the UN imposed economic sanctions on the country in retribution for Iraq's 1990 invasion of neighboring Kuwait. Under the oil-for-food program, exports to the Kingdom's eastern neighbor are only a fraction of what they were before Iraq's invasion of Kuwait.
During this year's first five months, Iraq was Jordan's largest trading partner.
Trade protocol for the year 2000 covers Jordanian exports worth $300 million in exchange for 4.8 million tones of Iraq crude, half of it free-of-cost and half at discounted prices.
Devlin also highlighted the consequences of heavy reliance on oil-exporting neighbors in trade exchanges, where these would be linked to fluctuations in oil prices.
“If you rely on an oil-dependant partner, your trade will either suffer or boom depending on fluctuation in oil prices,” Devlin said on the sidelines of the seminar.
“The more there is a hike in prices, the more cash flow would be in the hands of an oil-rich country to buy Jordanian goods, and the less money the less its purchase would be,” explained the economist.
Other benefits of diversity, according to Devlin, are better access to world knowledge and technology.
“Trade is a vehicle for exchanging ideas, advancement and research. There is a lot of learning and potential adoption of these technologies among trade partners,” said Devlin.
She commended Jordan's membership in the World Trade Organization, the Euro-Med Agreement and the current attempts to strike a free trade agreement with the US.
“It is not only about export revenues, and selling more goods, but it is all that comes along,” said Devlin.
“Establishing trade contacts with such markets will be an incentive to produce Jordanian goods of the same quality standards as those in foreign countries — that is where the big gain is.” — ( Jordan Times )
By Rana Awwad
© 2000 Mena Report (www.menareport.com)
