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    17-Jun-2025

Time for change: How Jordan can redesign its economic future - By Hamad Kasasbeh, The Jordan Times

 

 

Jordan’s economy stands at a crossroads. Structural weaknesses are holding back progress, yet the country also holds real promise. On the one hand, the unemployment rate hit 21.4 per cent in 2024, with women at 32.9 per cent and youth unemployment exceeding 46 per cent. GDP growth remains modest, at just 2.6 per cent, and public debt climbed to 116.8 per cent of GDP. The trade deficit also continues to widen.

 
On the other hand, Jordan benefits from several strengths. Inflation remains under control (2.2 per cent to 3.6 per cent), the population is young and well-educated, and the country has a solid digital infrastructure foundation. Foreign direct investment reached $1.637 billion in 2024, and Jordan recorded a $877 million trade surplus with the U.S. Tourism rebounded, contributing 14.5 per cent of GDP, while the fiscal deficit dropped to 5.1 per cent.
 
These indicators suggest Jordan can pursue a new growth model focused on light industry, digital transformation, smart agriculture, and renewable energy. These sectors require flexible regulations, targeted incentives, and investment in digital infrastructure rather than massive capital outlays.
 
Although young Jordanians possess strong skills, they lack real job opportunities. Education alone is not enough—what’s needed is an ecosystem that supports innovation, provides access to finance and training, and enables small business growth.
 
The current economic environment offers a chance for real reform. With stable inflation and a return of some foreign investment, Jordan can take bold steps—provided they’re rooted in data and aimed at stimulating local production and private-sector growth.
 
However, the ongoing trade deficit and high debt burden demand a reprioritization of public spending. Resources must shift toward productive sectors and away from unsustainable current expenditures.
 
Research and innovation also deserve more focus—particularly in energy, water, and food. These aren’t just development sectors; they’re essential to national security and resilience.
 
Jordan’s strategic location gives it the potential to become a regional hub for logistics, technology, and higher education. Cross-border connectivity with Iraq, Saudi Arabia, Syria, and Palestine can boost its regional economic role if supported by strong infrastructure and special economic zones.
 
Green growth is another opportunity. Investments in solar energy, hydroponic agriculture, and waste management offer a double benefit—lower operating costs and new green jobs. These efforts align with climate commitments and could attract favorable international financing.
 
In addition, high electricity and water prices pose a major barrier to economic growth. These costs burden households and reduce the competitiveness of key sectors like industry and agriculture. Addressing this challenge requires expanding domestic renewable energy production—especially solar—modernizing water infrastructure to reduce losses, and improving consumption efficiency. A fairer tariff system that supports productive use while protecting low-income households is also essential.
 
Ultimately, Jordan’s path to sustainable development requires bold decisions, a clear vision, and a people-centered approach. No reform effort can succeed without public trust and engagement. Citizens must be involved in planning and decision-making, and government must communicate transparently and deliver measurable results.
 

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