Daily Times

A recent report on the economies of Middle East countries, issued by the World Bank, stated that the economic growth rate in Jordan will be 2.3 per cent in 2017, 2.6 per cent in 2018 and 3 per cent in 2019.

In other words, the economy will grow, but at a very slow pace.

The World Bank’s latest estimates of growth rates are not new. We heard them long time ago, with minor changes. They are on the pessimistic side.

The World Bank is, of course, aware that Jordan has already several plans to motivate economic growth. For some reason, the bank did not take them into consideration.

Perhaps it did not take them seriously, even though at least some partial success may be registered and the growth rates will improve.

If that will be the case, the appropriation of billions of dinars to finance governmental and private sector projects, as planned by the most recent economic growth plan, will not make a meaningful difference to enhancing economic growth rates.

Economic planning in Jordan is seen as a public relations activity of the first order.

The positive but humble estimates of economic growth rates for three years were not based on our paper plans, which are good for publication and holding discussions around them.

The estimates were based mainly on the economic and social indicators in the first quarter of this year.

Such indicators have the potential to influence economic growth rates, including the security situation in the region.

The substantial economic improvement that took place in the first quarter of this year, including in the field of tourism, exports, expatriates’ remittances and public finance, are taken into account when estimating economic growth rates. The World Bank, as well as other international financial institutions, did not consider the plans issued by this council or that which has very little impact on the general direction of the economy, and is, accordingly, dismissed.

In order for the projections of the World Bank to look acceptable, it continued to use seven, not ten, million as the population of Jordan.

The end result is that per capita income in Jordan is lower than estimated by the World Bank.

We used to assume that the rate of economic growth depends on the volume of new investments, i.e., on the additional producing equipment.

In the absence of funds, it is imperative to shift attention to alternative measures that are more efficient and less costly to improve productivity, meaning increasing the output of the same available facilities.

Jordan is still struggling to enter the age of industrial revolution in its traditional nature, while the world grew out of that stage and entered into an era of economics of knowledge. Jordan will never be an industrial country, but it can be an electronic powerhouse.

Published in Daily Times, June 26th, 2017.