|A backward look on a year of anticipation
|The year 2001 was certainly a mixed blessing for Jordan's economy...|
JORDAN (Star) - The year 2001 was certainly a mixed blessing for Jordan's economy. As the Kingdom pays farewell to another 12 months, Jordanians have been reflecting on a year that started in February with the launch of the Special Economic Zone and the promise of regional and international investments.
The best, however, proved weeks later when the government successfully blue-printed a JD 300 million socio-economic transformation plan for the coming two years. The plan is believed to be a strategic approach for the government to rehabilitate JordanÕs human resources and make people feel the economic benefits of the transition.
Yet, the 11 September attacks on the US greatly effected the local economy. These were more visible in the tourism sector and notably the aviation business. Royal Jordanian sustained its crucial destination program around the world, thanks to the $2 billion insurance package from the government to keep up the carrier's work.
RJ officials agree the package was made to convince international insurance companies to pave the way for Royal Jordanian to maintain its flights. The attacks on Washington and New York is expected to produce losses of $10 million for the carrier which is not really a great deal. The airline succeeded this month in resuming its charter flights to Baghdad after a temporary suspension.
Still, the omens for Jordan in 2001 have been good, at least on the economic front. This December saw the official inauguration of the US-Jordan Free Trade Agreement (FTA).
Being the fourth country to enjoy such a privilige, Jordan is expected to push ahead in its foreign trade in world markets through mobilizing its exports and industries to North America. The agreement was also followed by the official launch of the Jordan-EU Association Agreement.
With over $200 million in Jordanian exports to the US this year, the FTA is expected to double in value in the coming three or four years. The same goes with the EU as Jordan is preparing itself for a long-standing partnership through its annual trade that tops $2 billion.
Jordan was more fortunate as the prompt FTA implementation with the US in December 2001 reduces the period of tax exemption on Jordanian products, something which will make these products reach the US markets more rapidly. But this also means local industries have to pull their socks up and increase the quality of their exports by providing a competitive edge.
Prime Minister Ali Abul Ragheb's haste to achieve economic development recieved much praise despite the fact some experts claimed they would do things differently.
Back to the transformation plan, it was His Majesty King Abdallah's wish to acquire a solid, stable economy. Even the IMF gave Jordan the thumbs up when it approved the Kingdom's economic reform program earlier this year.
But such an approval was not enough for Jordanians to make them satisfied with the outcome. They were shocked in July for the government's decision to raise fuel prices by more than 15 percent. It was recommended by the IMF and justified by the government as a long-term objective to adjust the balance of payments.
Still, two thirds of the JD 60 million, which the government will earn from the fuel price hikes, will go to the shaky heavily-debted local councils. It came at the time when the government decided to slash 50 percent of the councils' debts, leaving them worn out with JD 60 million.
The hike in fuel prices was met with skepticism from all economic sectors in the Kingdom. It damaged the government somewhat despite its upward standing. Another bad move by the government was the extending of the Sales Tax to include more commodities.
Economists fought back by saying the government wants to take from people's pockets for its own public finance. Latest estimations indicate the Sales Tax is expected to pump an extra JD 515 million to the treasury.
Jordan's relations with its Arab counterparts were also heightened. The Kingdom succeeded in reaching a quadruplet agreement with Egypt, Morrocco and Tunis to establish a basis for an Arab Free Trade Zone.
More joint Arab work was noticed soon after the Arab Summit held in Amman in March 2001. It was a landmark event for Jordan as it succeeded in strengthening its economic relations with neighboring countries, notably Iraq and Syria.
The trade protocol between Jordan and Iraq for the year 2002 was renewed this week, and is expected to surpass this year's figure of $1 billion. As for Syria, the government worked hard to fortify its economic relations with officials in that country.
This was more visible on the water issue when the Ministry of Water hit the jackpot as the Syrians agreed to support the Kingdom with water supplies in summer and approved an agreement with Jordan to build Al Wihda Dam on Yarmouk River.
Nevertheless, the year 2001 is also remembered for the gradual increase in local investments. More than 400 investment projects were given the green-light in Jordan at a total of JD 1 billion.
More of the 2001's blessings were noticed at the Amman Stock Exchange. It revamped its strength and rational performance with gradual increase in the price index and the overall trading. The index struck the 175 level with more than JD 350 million in overall trading for 2001.
As Jordanians prepare themselves for the New Year expectations are mixed in view of the regional and international situation. One should note the past 12 months were somewhat unusual for JordanÕs economy. Saying this, economists will have to learn from the past to predict a better future.