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	Jordan		Info-Prod Country Guide
CHARACTERISTICS   INDICATORS   THE ECONOMY   INVESTMENT ISSUES   PROJECTS   PROSPECTS

The Economy Government Role in the Economy The Jordanian government plays an active role, controlling about 60 percent of the total economy. It is also the largest employer in the country. Government entities, such as the Social Security Agency, maintain significant investments in share holding companies. Government regulations and procedures are bureaucratic, although the liberalization of investment laws is expected to reduce the bureaucracy. The Customs Department has collected customs duties and sales tax in 1996 worth a total of US$ 1.05 billion, an increase of 16 percent over 1995. Reforms A new securities law aimed at enhancing the efficiency, transparency and overall performance of the stock market and at encouraging foreign investment was enacted in 1996. This represents the first major overhaul of the Amman Financial Market since it was set up in 1978, as part of Jordan's overall economic reform program. The law, which was drafted with World Bank assistance, will specifically loosen the state's grip over the bourse and encourage faster and clearer presentation of company results. Under a 1995 law, foreigners may buy up to 49 percent of any of the ninety-eight firms listed on the exchange.   Presently, the AFM combines the running of the stock market with a regulatory role. The new law divides these tasks among three separate bodies: the Amman Securities Exchange Commission, responsible for day to day operations of the market; the Central Depository Body, responsible for settlement and clearing of stock and the centralization of the current manual share settlement, which involves cumbersome paperwork; and a governmwatchdog, the Securities Exchange Commission to oversee the two previous bodies. The exchange and Central Depository Body will both have boards of directors composed of licensed financial brokerage firms. The new law also regulates Jordan's first mutual funds, with manager accreditation falling under SEC jurisdiction. The Paris Bourse will assist in automating the exchange. Principal Economic Sectors General On the sectoral level, construction, agricultural and manufacturing sectors assumed a leading role in advancing economic growth in the last three years. Industry The industrial sector in Jordan comprises several major producers in the minerals sector and small to medium scale industries, in other sectors. The government maintains a substantial share of several major heavy industry ventures. The major industries in Jordan are phosphate fertilizers and minerals, petroleum products, food processing, metal products, cement and building materials, cigarettes, animal feed and clothing. Additional industries include furniture, pharmaceuticals, cosmetics, paints, plastics, paper and cardboard. The industrial sectors in Jordan have continued to grow. The already well-established minerals industry is pushing ahead with ambitious expansion plans. Small and medium scale industries are also expanding rapidly with record numbers of new industrial companies registering and commencing work. Although Jordan's industrial exports were devastated by the loss of the Iraqi, Kuwaiti and Saudi markets occasioned by the Gulf War crisis, many industrialists have bounced back. They have taken advantage of the growth in the domestic market led by the returnees and are using more imagination and energy than they had previously in order to look for new markets. In addition, the government itself encourages private industry to diversify and to develop new overseas markets. Industrial zones have been established at Sahab (south of Amman), Irbid and Salt; while Zarqa and Aqaba have been further developed as industrial centers. Tourism Tourism is one of the main sources of income and foreign currency earnings for Jordan. This sector contributes more than 10 percent of the GDP of Jordan, and its annual growth rate has remained a constant 6 to 8 percent since 1992. The government is extending full support to the private sector in marketing Jordan as a tourist destination. Exports Jordan's Central Bank put exports for the first ten months of 1996 at about US$ 1.20 billion compared to US$ 1.40 billion for the whole of 1995. Imports in the same period in 1996 stood at US$ 3.65 billion, already above the US$ 3.62 billion in imports for 1995. Previous Chapter Contents Menu Next Chapter

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