Jordan has been engaging in talks with the International Monetary Fund (IMF) over the issue of the Extended Fund Facility (EFF) for some time. Now, the negotiations are in the final stages, expected to conclude in July, but the Middle Eastern Nation will be required to employ out-of-the-box thinking in order to achieve the requirements set forth by the IMF.
On Sunday, Jordan asked the World Bank to increase its financial support to the Middle Eastern nation that now claims that one-third of its population consists of refugees. The refugees represent an enormous drain on the nation’s resources, but without Jordan’s support, these people would be caught in the crossfire of war in neighboring nations like Syria. This represents a potential humanitarian crisis of virtually unprecedented scale in the modern era.
The International Monetary Fund (IMF) appears on the verge of downgrading Jordan’s growth forecast due to sluggish economic performance in the first half of 2015. Regional instability has also contributed to the nation’s slow performance, an IMF official said Tuesday.
IMF Mission Chief to Jordan, Kristina Kostial, told a group of journalists in Amman that the IMF’s growth forecast for the nation for 2015 may go down from 2.9 percent, as predicted in October, to just 2.5 percent now.
Jordan, the Middle Eastern nation perhaps best known for its tourist destination of Petra, has never been one of the most powerful economies in the world. Even in the most stable of times, the economy would never have been considered exceedingly robust. Yet, amid all of the warfare and turmoil in the region over the last few years, a flood of refugees, and the recent onslaught of ISIS, Jordan’s economy continues to grow at a respectable rate.
Jordan is a lower middle-income economies coming under the Middle East and North African region as to the classification made by the World Bank on the basis of income and region for the year 2006.
The services sector of the country contributes a larger share to the Gross Domestic Product followed by Industrial sector. Jordan has improved its economic participation in the international scenario in the recent years. It is trying for WTO membership for encouraging exports sector of the country.
The country of Jordon faces a number of economic challenges. It is surrounded by volatile situations in Iraq, Israel/ Palestine and Lebanon, and with an estimated 57% Palestinian population and unrest at the start of 2011, its own internal issues.
Since it has only limited gas and no oil, coal or other energy resources, it needs to spend a lot of its national income on energy. Being mostly desert, it also lacks good agricultural land.
In Jordan’s Qualified Industrial Zones, companies that use a percentage of Israeli inputs can export duty-free to the United States.
The QIZs, as they are known, have become the strongest engine for Jordan’s economic growth.
