Jordan

Unlike many of the states in the Middle East, Jordan has no oil of its own. Its resources are mainly limited to phosphates and agricultural produce. So the economy depends largely on services, tourism and foreign aid, for which the US is the main provider.

Stability is a key factor in economic development: power remains firmly in the hands of King Abdullah II, who retains the loyal support of the army and the security services.

But reformers – some concerned with Jordan’s affiliation to the US – continually press for change. And the kingdom’s blueprint for long-term political, economic and social change – known as the National Agenda – has yet to be fully implemented.

Economic policy focuses on an ongoing privatisation programme and attempts to encourage foreign investment. However, the privatisation process has been subject to parliamentary delays owing to concerns about the policy's impact on employment levels and the fiscal revenue base.

But strong local and foreign investment, particularly from the liquidity-rich Gulf states, along with Iraq-related business, has helped to raise average GDP growth levels. Currently, GDP growth is around 6% (5.8% in 2008) and has been around this mark for the past three years. Jordan's conservative banking sector has been largely protected from the worldwide financial crisis, but many businesses, particularly in the tourism and real estate sector, are predicting a slow-down in 2009.

GDP by sector is: agriculture 3.6%, industry 10.1% and services 86.3% (2008 estimates).

Poverty, unemployment (12.9% officially but approximately 30% unofficially) and inflation are fundamental problems, but King Abdullah II has undertaken economic reforms in a long-term effort to improve living standards.

Since Jordan's graduation from its most recent International Monetary Fund (IMF) programme in 2002, the country has continued to follow IMF guidelines, practising careful monetary policy, making headway with privatisation, and opening trade channels.

Jordan's exports have significantly increased under a free trade accord with the US and the Jordanian Qualifying Industrial Zones, which allow Jordan to export goods duty-free to the US.

Export partners are the US 22.4%, Iraq 12.9%, India 8.3%, United Arab Emirates 7.8%, Saudi Arabia 7.5% and Syria 4.9%. Import partners are Saudi Arabia 21%, China 9.7%, Germany 7.5%, the US 4.7% and Egypt 4.4% (2007 figures).

The main challenges facing Jordan are reducing dependence on foreign grants, reducing the budget deficit, attracting investments and creating jobs.