[Source: NUSACC's U.S.-Arab Trade Outlook 2013]
Jordan’s National Agenda for 2006-2016 establishes ambitious goals for reducing the nation’s trade deficit. Currently, Jordan uses inflows of tourism dollars, foreign aid and expatriate remittances to reduce these deficits, which reached a high of $2.4 billion in 2004. By capturing additional value from apparel and other exports, Jordan intends to reduce the deficit to $1.7 billion in 2012 and to $.9 billion by 2017.
The 2001 ratification of the Jordan-U.S. Free Trade Agreement (FTA) – the first FTA between the United States and an Arab nation – has proved to be beneficial to both countries over the last decade. Since 2001, bilateral trade has increased from half a billion dollars to more than $2 billion by 2011. Jordan’s total world trade dropped 22 percent between 2008 and 2009 as a result of the worldwide economic downturn, but the Kingdom’s bilateral trade with the United States grew five percent under the FTA.
The U.S. phased out tariffs and quotas on Jordanian apparel exports under the FTA, and all tariffs ended on January 1, 2011. By shifting apparel production and exports away from the umbrella of Qualified Industrial Zones (QIZs) toward the broader FTA provisions, Jordan intends to supply short run/seasonal quantity goods to U.S. markets. This would generate traffic for Jordan’s own port infrastructure and multiply the domestic jobs creation effect. By 2017, Jordan plans to multiply apparel exports by a factor of five.
Information and communications technology (ICT) is one of Jordan’s strongest and fastest-growing sectors. By the end of 2011, Jordan intends to increase internet penetration by 50 percent, increase the number of ICT professionals to 35,000, and expand ICT revenues to $3 billion. The Hashemite Kingdom aims to become a regional information technology hub through exports of both services and products.
H.E. Marwan Juma, then Minister of Communications and Information Technology, told the MENA ICT Forum in October 2010 that Jordan has already made “a quantum leap in the ICT sector. Jordanian ICT products and services are fueling development locally, regionally and internationally.” According to Juma, if the sector continues to grow at its current pace, it will double in size in ten years. The sector generated $2.2 billion for the economy in 2009.
Jordan’s new incentives exempt income tax on all exported ICT services. The Information Technology Association of Jordan (int@j) noted that ICT exports reached almost a quarter billion dollars in 2008 before dropping 7.5 percent during the worldwide downturn in 2009. In 2009, Yahoo! acquired Jordan-based Maktoub – the world’s largest Arabic content generator. This marked the first multimillion dollar purchase by a U.S. portal company in the MENA region. By May 2010, Yahoo! Middle East opened of its first MENA-based offices in Amman.
In other sectors, Transport Minister H.E. Alaa Batayneh announced a $5.9 billion freight train network project that will connect the port at Aqaba to other parts of Jordan and to neighboring countries. Preliminary design work is also underway for a $1.2 billion rail project linking Zarqa and Amman.
Despite the global economic downturn, major Gulf-financed projects in Jordan are moving ahead. Abu Dhabi-based Al Maabar has begun work on the $10 billion Marsa Zayed project in Aqaba – the largest construction project in Jordan. Emirates Tourism Investment of Abu Dhabi (ETI) awarded the Arabian Construction Company a $93 million contract to build a luxury Rotana Hotel Tower in the Abdali development in the capital, Amman. At 617 feet, it will be the tallest building in Amman when completed in 2013. Jordan has also given French nuclear company Areva exclusive mining rights to uranium in central regions of Jordan.
According to the World Tourism Organization (WTO), the global tourism market will triple in size by 2020. Jordan – home to Petra, Wadi Rum, Aqaba, and the Dead Sea – boasts tourism as its largest business sector. It accounts for 10 percent of Jordan’s GDP, contributing more than $800 million to Jordan’s economy. Jordan has announced that it is planning to double the level of tourism investment by allocating four percent of tourism receipts for international marketing, product development, and human resources capacity-building.