National economy ‘to perform well in 2010′

AMMAN (JT) – Recovery in the private sector is fuelling a rebound in the Kingdom’s economy despite sluggish global demand and weak performance in the world’s major economies, an international analysis and research firm reported recently.

Business Monitor International (BMI) predicted that Jordan’s economy would grow 3.2 per cent this year, just below the International Monetary Fund’s estimate of 3.4 per cent but still well above the 2.3 per cent growth registered last year.

In a SWOT (strengths, weaknesses, opportunities, threats) analysis posted on its online service Friday, BMI wrote that recent reforms had spurred economic growth this year.

BMI cited measures undertaken by the government to liberalise trade, privatise state-owned companies and reduce fuel subsidies, along with increased foreign investment and falling unemployment.

The research firm also noted that Jordan’s economy has been protected to some degree from the effects of the global economic downturn, saying that the Kingdom has been “less exposed to the fortunes of the troubled economies of the euro zone” with 51.2 per cent of its exports during the first five months of 2010 directed at less-affected Arab countries.

In the report, which also predicted growth in the economies of Lebanon and Syria, BMI cited Jordan’s stability and security, as well as its proximity and strong ties to Iraq, as assets making the country attractive to investors. The firm also listed the expanding tourism industry, the “robust health” of the banking sector, and improvements in the business environment among the Kingdom’s strengths.

Jordan’s opportunities include the discovery of oil shale, efforts to connect the Kingdom’s cities by rail, and the continued perception of the country as a “safe haven in a turbulent region”, which BMI said bodes well for tourism as well as foreign investment.

The report stressed that corruption has fallen significantly over the past decade, as has the use of “wasta” or favouritism in business, but pointed out that the Kingdom still has room for improvement in this regard, citing Transparency International’s Corruption Perceptions Index 2009, in which Jordan dropped two places from 47th to 49th.

Other weaknesses highlighted in the report include high youth unemployment, limited natural resources and the lingering challenges of unemployment and poverty. “Government promises of an improved welfare system and job creation have proven slow to materialise,” BMI added.

Among potential threats to Jordan’s continued economic growth, the research firm named low Internet connectivity – with only 24 Internet users and two broadband users per 100 inhabitants – vulnerability to fluctuations on global oil markets due to a lack of conventional reserves, and dependence on foreign aid, as well as the possibility of reignited regional conflict.

Based in London, BMI is an independent provider of country risk analysis and industry research with clients in over 140 countries, according to the company’s website.

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