Jordan

Last updated: July 2nd, 2021

The Hashemite Kingdom of Jordan is located in the eastern Mediterranean, but has only a narrow 26 kilometers of sea access to the Red Sea in the Gulf of Aqaba. Jordan is bordered by Israel and the Palestinian Territories to the west, Syria to the north, Iraq to the northeast, and Saudi Arabia to the south. The country is about four times smaller than Germany.  Among its population of approximately 10.9 million people, Jordan hosts, according to the UN Refugee Agency (UNHCR), around 660,000 Syrian refugees and thus the second highest share of refugees per capita in the world. The capital Amman is in the northern part of the country.

In 1999, HM King Abdullah II succeeded his late father King Hussein to the throne. Thanks to political reforms and measures for economic liberalization, Abdullah II initiated a transformation of the national economy and opened it up to the world market.

Jordan is a member of the UN and the Arab League as well as the World Trade Organization (WTO) and the Greater Arab Free Trade Area (GAFTA). An association agreement with the EU has been in force since 2002. Together with Morocco, Tunisia, and Egypt, Jordan is also a party to the Agadir Agreement, a free trade zone aimed at harmonizing rules on product standards and customs and removing all trade tariffs between the signatories.

In 2020, Jordan had the second-largest International Finance Corporation (IFC) investment portfolio in the Mediterranean and Middle East region with the aim to strengthen private-sector engagement and job creation through direct investments, public-private partnerships, and  key business climate reforms.

The Jordanian economy has a strong services sector; its share of the GDP is consistently around 66.6 percent, which is generated primarily from tourism, banking, and financial services as well as IT. Tourism has gone through a phase of diversification (cultural tourism, ecotourism, adventure holidays). Reforms and academic cooperation programs have paved the way for a knowledge-based economy. The manufacturing industry (28.8% GDP share) focuses primarily on the textile industry as well as the construction and chemical sectors. Several laws aim to facilitate the privatization of the water sector. It is characteristic of all industries that small and medium-sized enterprises (SMEs) provide the bulk of economic output in the private sector.

Jordan’s main exports are fertilizers, calcium phosphates, packaged medicines, clothing and apparel, as well as phosphoric acid. The main imported commodities are cars, refined petroleum, natural gas, crude petroleum, as well as clothing and apparel.

In the 2020 Ease of Doing Business Index, the World Bank raised Jordan’s rating. It became easier to access credits, resolve insolvency, and start a business. The Jordanian economy is heavily reliant on foreign investment. The country offers interesting business opportunities in a politically stable environment and an investor-friendly atmosphere. Investors benefit from stable exchange rates and relatively moderate inflation rates.