The Economy of the Hashemite Kingdom of Jordan
Background:
The Hashemite Kingdom of Jordan, with a population of 5.5 million is a country that is very poor in resources, and has no oil. It also has limited agricultural land and is considered to have scarce water. The main natural resources available are phosphate and potash. About 80% of the human population lives in cities, and 38% of this population is under the age of 14 years, which classifies it amongst the youngest lower middle-income countries. Although there is a slow progress in the demographic growth, which is currently about 2.6%, it is expected that the total population would reach to almost 7 million by year 2015.
Compared to other lower middle-income countries, and despite the lack of resources and the uncertainty emanating from the regional political environment, Jordan has managed to achieve outcomes that are above average in comparison to other countries with lower middle income. The main three factors contributing to such above average outcomes are:
• Influx of Jordanian expatriates transfers into the country, which along with grants exceeded 20 percent of GDP.
• Capital inflows from neighboring countries that have recently been on the increase as a result of the excess liquidity in the neighboring oil producing countries.
• Sound development policies that have been properly managed.
The graph below taken from the World Bank's Country Assistance Strategy Paper prepared for The Hashemite Kingdom of Jordan clearly shows the trend of Per Capita Income from 1976 to 2005.
It is evident that Jordan was unable to catch up with the levels of income per-capita it had reached in the 1980s boom, which was then severely hit in 1989 by a financial crisis. During the 1990s -which was considered a period of adjustments-, and while trying to restore some constructive economic growth, the incomes per capita were swept by the high population growth. Thus unemployment and poverty became the most critical problems to be solved.
The Hashemite Kingdom of Jordan, with a population of 5.5 million is a country that is very poor in resources, and has no oil. It also has limited agricultural land and is considered to have scarce water. The main natural resources available are phosphate and potash. About 80% of the human population lives in cities, and 38% of this population is under the age of 14 years, which classifies it amongst the youngest lower middle-income countries. Although there is a slow progress in the demographic growth, which is currently about 2.6%, it is expected that the total population would reach to almost 7 million by year 2015.
Compared to other lower middle-income countries, and despite the lack of resources and the uncertainty emanating from the regional political environment, Jordan has managed to achieve outcomes that are above average in comparison to other countries with lower middle income. The main three factors contributing to such above average outcomes are:
• Influx of Jordanian expatriates transfers into the country, which along with grants exceeded 20 percent of GDP.
• Capital inflows from neighboring countries that have recently been on the increase as a result of the excess liquidity in the neighboring oil producing countries.
• Sound development policies that have been properly managed.
The graph below taken from the World Bank's Country Assistance Strategy Paper prepared for The Hashemite Kingdom of Jordan clearly shows the trend of Per Capita Income from 1976 to 2005.
It is evident that Jordan was unable to catch up with the levels of income per-capita it had reached in the 1980s boom, which was then severely hit in 1989 by a financial crisis. During the 1990s -which was considered a period of adjustments-, and while trying to restore some constructive economic growth, the incomes per capita were swept by the high population growth. Thus unemployment and poverty became the most critical problems to be solved.