Jordan is classified as an emerging market
Jordan’s GDP per capita rose by 351% in the 1970s, declined 30% in the 1980s, and rose 36% in the 1990s. After king Abdullah II’s accession to the throne in 1999, liberal economic policies were introduced that resulted in a boom that continued through 2009. Jordan has a developed banking sector that attracts investors due to conservative bank policies that enabled the country to weather the global financial crisis of 2009. Jordan’s economy has been growing at an annual rate of 7% for a decade.
Jordan has FTA’s with the United States, Canada, Singapore, Malaysia, the European Union, Tunisia, Algeria, Libya, Turkey and Syria. More FTA’s are planned with Iraq, the Palestinian Authority, the GCC, Lebanon, and Pakistan. Jordan is a member of the Greater Arab Free Trade Agreement, the Euro-Mediterranean free trade area, the Agadir Agreement, and also enjoys advanced status with the EU.
Jordan is an emerging knowledge economy. The main obstacles to Jordan’s economy are scarce water supplies, complete reliance on oil imports for energy, and regional instability. Just over 10% of its land is arable and the water supply is limited. Rainfall is low and highly variable, and much of Jordan’s available ground water is not renewable. Jordan’s economic resource base centers on phosphates, potash, and their fertilizer derivatives; tourism; overseas remittances; and foreign aid. These are its principal sources of hard currency earnings. Lacking coal reserves, hydroelectric power, large tracts of forest or commercially viable oil deposits, Jordan relies on natural gas for 10% of its domestic energy needs. Jordan used to depend on Iraq for oil until the American-led 2003 invasion of Iraq.
Rapid privatization of previously state-controlled industries and liberalization of the economy is spurring growth in urban centers like Amman and Aqaba. Jordan has six special economic zones that attract large-scale investment: Aqaba, Mafraq, Ma’an, Ajloun, the Dead Sea, and Irbid. Jordan also has a plethora of industrial zones producing goods in the textile, aerospace, defense, ICT, pharmaceutical, and cosmetic sectors.