Following World War I and the dissolution of the Ottoman Empire, the League of Nations awarded Britain the mandate to govern much of the Middle East. Britain demarcated a semi-autonomous region of Transjordan from Palestine in the early 1920s. The area gained its independence in 1946 and thereafter became The Hashemite Kingdom of Jordan. The country's long-time ruler, King HUSSEIN (1953-99), successfully navigated competing pressures from the major powers (US, USSR, and UK), various Arab states, Israel, and a large internal Palestinian population. Jordan lost the West Bank to Israel in the 1967 Six-Day War. King HUSSEIN in 1988 permanently relinquished Jordanian claims to the West Bank; in 1994 he signed a peace treaty with Israel. King ABDALLAH II, King HUSSEIN's eldest son, assumed the throne following his father's death in 1999. He has implemented modest political and economic reforms, including the passage of a new electoral law in early 2016 ahead of legislative elections held in September. The Islamic Action Front, which is the political arm of the Jordanian Muslim Brotherhood, returned to parliament with 15 seats after boycotting the previous two elections in 2010 and 2013.
Middle East, northwest of Saudi Arabia, between Israel (to the west) and Iraq
phosphates, potash, shale oil
Population - distribution
population heavily concentrated in the west, and particularly the northwest, in and around the capital of Amman; a sizeable, but smaller population is located in the southwest along the shore of the Gulf of Aqaba
Arabic (official), English (widely understood among upper and middle classes)
AMMAN (capital) 1.155 million (2015)
- Conventional long form
- Hashemite Kingdom of Jordan
- Conventional short form
- Local long form
- Al Mamlakah al Urduniyah al Hashimiyah
- Local short form
- Al Urdun
parliamentary constitutional monarchy
- Geographic coordinates
- 31 57 N, 35 56 E
- Time difference
- UTC+2 (7 hours ahead of Washington, DC, during Standard Time)
- Daylight saving time
- +1hr, begins last Friday in March; ends last Friday in October
has not submitted an ICJ jurisdiction declaration; accepts ICCt jurisdiction
Jordan's economy is among the smallest in the Middle East, with insufficient supplies of water, oil, and other natural resources, underlying the government's heavy reliance on foreign assistance. Other economic challenges for the government include chronic high rates of poverty, unemployment and underemployment, budget and current account deficits, and government debt.
- External debt stocks
- US$ 25,745,968,000
- Total tax rate (% of commercial profits)
- Real Interest Rate
- Manufacturing, value added (% of GDP)
- Current Account Balance
- US$ -3,331,746,479
- Labor Force, Total
- Employment in Agriculture
- Employment in Industry
- Employment in Services
- Unemployment Rate
- Imports of goods and services
- US$ 21,623,661,972
- Exports of goods and services
- US$ 13,576,056,338
- Total Merchandise Trade
- FDI, net inflows
- US$ 1,274,788,732
- Commercial Service Exports
- US$ 5,915,633,803
citrus, tomatoes, cucumbers, olives, strawberries, stone fruits; sheep, poultry, dairy
tourism, information technology, clothing, fertilizer, potash, phosphate mining, pharmaceuticals, petroleum refining, cement, inorganic chemicals, light manufacturing
- textiles, fertilizers, potash, phosphates, vegetables, pharmaceuticals
- US 21%, Saudi Arabia 16.5%, Iraq 10.3%, India 8.7%, UAE 4.8%, Kuwait 4.4% (2015)
- crude oil, refined petroleum products, machinery, transport equipment, iron, cereals
- Saudi Arabia 15.4%, China 12.8%, US 6.2%, Germany 4.7%, UAE 4.2% (2015)
- Country Risk Rating
- A very uncertain political and economic outlook and a business environment with many troublesome weaknesses can have a significant impact on corporate payment behavior. Corporate default probability is high.
- Business Climate Rating
- The business environment is mediocre. The availability and the reliability of corporate financial information vary widely. Debt collection can sometimes be difficult. The institutional framework has a few troublesome weaknesses. Intercompany transactions run appreciable risks in the unstable, largely inefficient environments rated B.
- Supported financially and politically by the Gulf monarchies and western countries
- Significant production of phosphates and potash
- Expatriate workforce and tourism significant sources of foreign exchange
- Low natural energy resources and weak production base
- Weak natural energy resources and production base
- Vulnerable to the international economic cycle and the political instability in the Near and Middle East
- Imbalance in the public and external accounts, resulting in a reliance on aid and foreign capital
- High unemployment
Jordan will continue to deal with spillovers from the Syrian crisis and the slowdown in the GCC countries. However, the economy proved resilient in 2016 buoyed by an expanding financial sector, as well as growth in the communication and transport sectors whilst the manufacturing sector and the tourist industry struggled to maintain their vitality. In 2017, major public investments and an upsurge in FDI flows under the “Jordan Compact” plan will make positive contributions to growth. During the London conference in February 2016, Jordan presented a plan aimed at improving the integration of Syrian refugees, in excess of one million people, within the Jordanian economy. In return the Hashemite Kingdom would receive aid from international development organisations as well as the financial and economic support of the European Union and the United States. Eleven economic zones with large refugee population will be established and be granted preferential access to the European market, as well as special conditions aimed at increasing their attractiveness. In 2016, Jordan also applied to the IMF for a loan as part of the Extended Fund Facility, in an amount of USD 723 M. This reflationary policy however could be diluted because of the slowdown in the economies of the Gulf region countries, which will continue to have negative repercussions for the construction and tourism sectors, as well as for remittances from workers abroad. Economic stagnation and falling global raw material prices have resulted in the re-emergence of deflationary pressures. The expected increase in energy costs as well as the economic upturn would however point towards rising prices for 2017.
The deficit in the public accounts improved somewhat in 2016 despite the almost flat economy. The budget consolidation plan implemented with the support of the IMF since 2012 has achieved a more than 50% reduction in the public deficit since 2014. The fall in oil and gas prices enabled the national electricity utility NEPCO to balance its books. In addition, the removal of energy subsidies resulted in a reduction in current spending. Debt servicing costs are also lower and reflect the improved management of the debt stock, which is mainly concessional. Wages as well as military expenditure have however continued to increase. In 2017, the public deficit will hold steady. Investment spending is expected to increase but this will be financed by increased taxes on tobacco and alcohol as well as thanks to an overhaul of the legislation on tax loopholes. The challenge for the budget consolidation will remain the stabilisation and reversal of the debt trajectory.
Jordan is a net importer of oil and gas. The fall in oil and gas prices in 2016 should therefore have had a positive impact on the current account. But this was largely cancelled out by the decline in exports, in tourist revenues and expatriate remittances. In 2017, the current account deficit should contract slightly. The continued conflict in Syria will remain a hindrance on exports and tourist revenues but the reopening of the trade routes with Iraq, in particular the Amman-Baghdad route should help boost exports. In addition, the Kingdom should feel the positive upshots of the access to the European market following the ratification of the “Jordan Compact”. The gradual rise in energy prices however will increase the cost of imports although Jordan is working to diversify its sources of gas. Remittances from workers abroad will continue to feel the impact of the slowdown in the member countries of the GCC which could result in a reduction in its currency reserves. In 2016, these amounted to USD 15.8 M, or 8.4 months’ imports.
The parliamentary elections of September 2016 led to only minor changes in the political landscape of Jordan. The turnout for the elections was very low despite the involvement of the Islamic Action Front party, with links to the Muslim Brotherhood, which had boycotted the previous two elections in 2010 and 2013. There is a danger that Jordan could experience a rise in social tensions, namely between the Jordanian population and Syrian and Iraqi refugees. As a country bordering Syria and Iraq, Jordan is directly affected by the chronic instability in the region. The country has been spared the worst of the conflict but ongoing regional instability could have negative repercussions on stability and security within Jordan. There are more than 2000 Jordanians fighting with Daesh and Jordan is regularly listed as a target for the jihadists.