Investigating Jordan

Investing in Jordan

In an idealistic economy, society would have an educated population, scarce poverty, low unemployment rates, and many would utilize resources in an efficient manner. In this utopia, corruption would not subside, resulting in an outcome that would be in the best interest to the entire population. In contrast, this utopia is non-existent and we do not live in a perfect world. For our society, it is close to impossible to achieve these characteristics. Presently, we live in a world where some countries have yet to develop and grow to their potential, which is mainly caused by aspects of: scarce resources, unemployment, and degradation. One example remains the Middle East. The Middle East is said to be the second least developed region of the world. With that said, some Middle Eastern countries such as Jordan are diligently working to change. These efforts are mainly fueled by the thought of one day having high economic growth, social welfare and human development. Jordan is working hard to change their economic conditions with the anticipation of having investors such as myself to invest in their country.

When planning to invest in Jordan, one must gain knowledge in many key factors. Such as the current economic circumstances, trends in key indicators, human development indicators and any other factors that significantly impact the economy. After gathering knowledge and data, recommendations regarding the improvement of the country to improve economic performance would be given.

Economic development in Jordan started in 1948 when Israel took over Palestine. The occupancy of Palestinian territories led to Palestinian refugees to migrate to Jordan, causing a high demand for services, goods, and housing. Jordan needed to come up with a plan to accommodate its new residence. According to Taher H. Kanaan in Social Change of Economic Adjustment he discusses that Jordan needed to come up with a plan to build infrastructure of basic public utilities such as; water and energy supplies, irrigation canals and dams, urban zoning and tourist attractions. Taher H. Kanaan states they also need public services education and health, to meet the basic needs of the rapidly growing population. To further develop their rapidly growing economy they also needed to develop natural resources, and find investment. This led to economic development.

In current economic circumstances Jordan currently face issues that hinder the growth they desire. According to United Nations Development Jordan faces; poverty which is at 14.2 %, still with a risk the segment will fall and increase to 14.8 %, young and growing population, the inability of the economy to generate jobs with a 13.8 % unemployment rate, a large budget debt of 67.2% of GDP and education. Another very important factor the Jordan faces, which also affects human development is the water. Not only is the water supply scarce it is polluted, causing health problems. A study done in Jordan according to an article Cultural responses to water shortage in Jordan shows the use of untreated, or inadequately disinfected water is responsible for waterborne outbreaks, seasonal fluctuations of intestinal parasitic infections. Which cause diarrhea, are passed through the fecal/oral route, and sources of contamination include cooking and eating utensils, food, and water. The water problem also affects agriculture development, allowing 5% occupation of Jordan’s labor force. The lack of water puts agriculture at 2.2% for GDP.

Though this is true Jordan has not given up and still did a remarkable job with recent economic reform consequently to this, Jordan is considered as “a regional economic role model” according to wikipedia. . The CIA fact book shows Jordan’s economy significantly changed in 2002 when they followed the guidelines of IMF. The GDP growth rate went from 8.4% in 2004 to 5.7% in 2007, they are practicing careful monetary policy, making substantial headway with privatization, and opening the trade regime causing exports to increase. Jordan is not a country that sits and expects things to just happen; Jordan’s government plays an immense role. According to CIA world fact book Jordan’s government is a constitutional monarchy, which entails the king to exercises his executive authority through the prime minister and the Council of Ministers, or cabinet. The king of Jordan has embarked on the road to democracy. According to King Hussein’s’ website he guided the idea of democracy. King Hussein wanted the empowerment and involvement of everyday citizens in civic life, which will contribute to increase stability and institutionalizations benefiting the country. The government wants citizens to be involved and they should take full advantage of it. Playing another big part is the role of the state in the economy, according to World Resource Institute Jordan has undertaken programs based on positive social development. The programs emphasize both public and private sector involvement, and the growth of international and inter-regional trade. However, this is still not enough to achieve the idealistic economy.

Even with Jordan’s economy improving and the government playing a big role in the growth of the state, the facts still remains, Jordan has to deal with what is holding them back. They need to focus on is, young growing population, poverty, education, creating jobs, attracting investments, and reducing the budget deficit. There are tactics that Jordan should take into consideration if they plan on improving welfare, human development and economic performance.

One of the main concerns for Jordan is rapidly population growth as well as the young population, these affect development. The age structure is very young, 40% of the population is below the age of 15 years. This causes challenges with education, training, employment, and health. A proposal Jordan should think about is closing their borders, by doing so they will eliminate the number of refugees that will enter the country. This will be helpful because closing borders lets Jordan focus within its own country. It may weaken ties with some countries, but put Jordan in a better economic situation, by making more natural resources available to people who live in rural parts and stop growing poverty. This will not decrease population but it will stabilize it, allowing Jordan to focus on the young population. Jordan has given great attention to education, the standards are high, but it gets complicated when the connection between politics and religion meet. Is it ok to let women teach? Jordan will have to learn to promote women and give them more value in society. Jordan must consider how education increases awareness, if you educate girls they will have more economic