Jordan on a juncture

The national debt has also reached 10% of its gross domestic product (GDP), and with huge budget deficit, support from other Gulf countries, European countries and the United States continue to pour in.

Based on data released by the government at the end of September, growth for the second quarter of 2012 slowed to 2.9% year-on-year, a slight decrease from the 3% growth recorded in the first quarter. The second quarter economic expansion was due mainly to the positive contributions of the tourism sector which saw a 10% increase during the period. Other sectors that posted healthy growth included communications and transport (6.7%) and finance-related segments (5.7%). Government officials believe that the country would grow significantly starting mid-2013 and this would intensify further by 2014.

Capital inflows to achieve recovery
A recent announcement by the International Monetary Fund (IMF) of a $2 billion loan aims to boost Jordan's dwindling economy. Under conditions set by the IMF, the Jordanian government would need to trim its budget and reduce subsidies on electricity and fuel. The European Union is also extending a $52 million grant for Jordan to institute “political, economic, social and legislative reforms.” Half of the amount would be released to Jordan by end of 2012 while the balance will be disbursed in 2013.
The World Bank (WB) has also agreed to provide $70 million to Jordan in support of a project to construct a solar power plant with a total generation capacity of 100 megawatts (MW). Jordan imports majority of its oil requirements. The government has incurred losses by switching power plants to more expensive fuels, such as diesel, after a natural-gas pipeline from Egypt's Sinai region has been repeatedly attacked since last year.

The government is also banking on foreign investment inflows (FDI) to help the country achieve an economic rebound and enhance its industrial position in the region. Already the government is anticipating higher FDI inflows which could reach by as much as $1.5 billion in 2013 and $3 billion by 2014.

Jordan is also the recipient of FDI from several Gulf countries starting from a $5 billion grant pledged last year. Qatar, which will provide Jordan with $1.25 billion of the total, already inked a framework memorandum in late September with Jordan that specifies how the funds will be utilised to help prepare Jordan for future economic expansion. According to Jafar Hassan, Jordan's Minister of Planning and International Cooperation, about 60% of the projects funded by the $1.25 billion contribution are for local community development, 15% will be for energy projects and 10% for transport infrastructure projects.

Kuwait also committed to release $1.25 billion for Jordan as part of the GCC deal and the funding will go towards energy generation, such as the building of five new solar and wind power generators. The Jordanian government is preparing to launch a new promotional campaign in the GCC, in North America and even in Asia to attract more private investors. A number of companies in China have also started to invest into Jordan.

Another bright spot in Jordan's struggle to recover economically is the holding of the World Economic Forum (WEF) in 2013, which appears to be a global recognition for the country's security and stability. The forum is expected to discuss means to address the challenges facing national economy and to promote investment opportunities in Jordan. These were the remarks of Jordan Businessmen Association President Hamdi Tabbaa, Jordan Europe Business Association Chairman Issa Murad, Jordan Chamber of Commerce President Nael Kabariti, Jordan Chamber of Industry Chairman Hatem Halawani, member of the Amman Chamber of Commerce's board BaAir Jordan Westbrook 0.2