Ever since Iraq and Syria went to war and the subsequent turmoil that it has brought to the 2 countries, Jordan has also been affected economically to a large extent. Earlier, those 2 countries were natural markets for Jordan and trade and business flourished a lot. But since the last few years, it has been suppressed, and businesses in Jordan are now feeling the heat. The country has tried creating ‘development zones’ in different sectors in different parts of the country to fuel its growth. It expects to attract both local and foreign direct investment (FDI) so that its economy can stay afloat. It has also lowered its tax rates to a considerable extent, and there is only an income tax of 5% for income generated through any means is ‘development zones.’ However, some factors are still to be looked into as discussed below.
- A lot has to be done – After the turmoil in its vicinity, Jordan tried to revive itself and, in fact, in 2017, the country was able to improve its FDI inflow. The FDI inflow into the country grew by 7.5% whereas the same had dropped by 11.5% in the whole region. However, there are 7,50,000 registered refugees in the country and managing them can be quite a huge task in the future. Moreover, during the first quarter of 2018, things were not quite up to the standard, and it remains to be seen whether the optimism of the government can work wonders in the second quarter and beyond.
- the investment ministry is working overtime – The Ministry of Investment, headed by Mr. Muhannad Shehadeh, accepts things have not quite gone well since the last few quarters but is still confident of bringing in more FDIs. The country has also brought in some needed economic reforms by announcing some subsidy cuts and tax rise packages. The country has also planned to cut its public debt to 77% from 96% which can fetch the needed results.
The economy of Jordan only grew by 2% in 2017, and that’s when alarm bells started ringing within the country. However, the country is now looking to grow by at least 5% from 2018 to 2022 so that all economic challenges can be met.