Agriculture And Economy In Jordan

Write a case study or mini research on any economics topic related to Jordan's economy. Topics sugessted : Solar systems PVC, agriculture and economy , taxes in Jordan.

Agriculture in Jordan

Agriculture refers to the exercise or art of cultivating the earth, producing yields and nurturing livestock. In addition, agriculture in fluctuating degrees, mostly involves the ground work and selling of the resulting yields. On the other hand, economy refers to the system by which goods and services are produced, bought and sold in a region. The World Bank classifies Jordan as an upper middle-income nation. Carew-Miller (2016) denotes that findings by the Heritage Foundation have shown that Jordan has the third freest economy in the Asian continent and partly in the African continent (Carew-Miller, 2016). Economy comprises various sectors such as industries, energy, transport, media, services and standard of living. Agricultural sector comprises of segments such as forestry, fishery, livestock and horticulture. To begin with, the following context will discuss the agriculture in Jordan.

At the time of Jordan’s independence, Jordanian agriculture contributed significantly to the economy. However, it subsequently suffered a decades-long constant decline. In addition, Jordan is a net food-importing nation. Besides, there is a small market of consumers including the refugees of approximately eight million. Jordan imports up to approximately 98 percent of agricultural commodities from other nations such as Egypt (In Orrenius, In Canas, & In Weiss, 2015). The imported consumable commodities include chick peas, rice, cheese, powdered milk, vermicelli, wheat, sugar, barley, vegetable oil, coffee, lentils, tea and corn. For many years, agriculture has been dropping as a component of the overall economy. The decline has been due to scarcity of water for irrigation. Despite agricultural activities consuming 65-75 percent of Jordan’s water sources, the sector’s contribution to the gross domestic product (GDP) is only around 3 percent.

Jordan’s labor force of about fifteen percent is employed by the agricultural segment. However, majority of these employees hail from Syria and Egypt. Jordanian agriculture is comprised of several major components such as horticultural product segment, small-scale herding and poultry industry. Due to the increasing Syrian refugees entering Jordan, the market is growing. Trade in Jordan has facilitated an increase in importation of agricultural commodities such as poultry, rice, fish and beef. In 2014, there was a minor decline from the previous years’ importation of agricultural exports (In Jalilvad & In Westphal, 2018). The decline can be attributed to a fall in commodity exports of agricultural items such as corn and wheat. The reason behind this drop was propelled by stiff price competition from Black Sea origins.

In 2010, Jordan and U.S entered into an agreement. Hence, under the terms of the FTA, importation levied duties and other trade obstacles were phased out. Ministry of Agriculture from Jordan selectively imposes sanitary measures regarding the license on importation of poultry and meat. In addition, the Ministry of Agriculture is currently committed in implementing trade policies (Tobin, 2016). However, the policies are not limited to restricting the issuance of importation permit. Advance authorizations to the importation of commodities are required for specific food and agricultural products. Trade permits and approvals are the responsible of the Health and Agricultural officials.

Jordanian administration is made up of several boards which are responsible in transacting the trade activities in and out of the country. For instance, Jordan Food and Drug Administration (JFDA) hold the prime responsibility for accepting or denying incoming food deliveries. In addition, Jordan Standards and Meteorology Organization (JSMO) carry out the tests and drafts food safety criteria. Agriculture still plays a role in the Jordanian economy. However, about 40 percent of the land which is operational comprises of the West Bank. 75 percent makes up the rain-fed lands while the remaining land percentage is occupied by the irrigation activities in the country. Mostly, irrigation takes place in the highlands and Jordan valley which are considered to be relatively fertile.

Challenges facing Jordanian Agriculture

Irrigation structures, soil and water conservation plans have received significant recognition in Jordan’s economic growth. The cooperative organization has made improvement in the agriculture segment. Such progress involve provision of loans and advice to home-grown cooperatives in Jordan. In addition, in striking agreements to Iraq and Egypt, where redeployment of land irrigated by the river Nile and Euphrates was a pivotal social, political and economic matter (Dept, 2017). However, land occupancy was never a significant concern in Jordan. Therefore, ownership of rain-fed land was not subjected to any special constraints. Even though the Jordanian agricultural segment’s share of GNP declined in comparison with other segments which contributed towards the nations’ economy, farming continued economically, significant and production developed in absolute terms.

 However, even with the increased production, the failure of agricultural sector to keep up with the pace of economic advance, resulted in an inadequate national food supply. Therefore, due to this shortage, Jordan had to import staples such as grains, cereals and meat. Spectators expected food importation to remain essential into the indefinite future.

For instance, industries in Jordan comprises of forestry, fishing, tourism and agriculture. The agriculture sector’s contribution to the economy has decreased continuously to a two point four percent of the GDP by the year 2004. This is despite an increased production rates being witnessed. The vegetables and fruit segments are the most profitable economically as the region of Jordan Valley is considered to be very fertile. Lack of consistent and adequate rainfall has led to the production of other crops such as cereals being volatile. In terms of overall local economy, the fishing and forestry segments remain to be negligible. In addition, the fishing segment is steadily divided between aquaculture and live capture. In economic terms, the forestry segment is considered to be even smaller in its impact on the economy.

Jordan’s economy is also facilitated by the mining and minerals sector. Jordan mainly exports minerals such as phosphate and potash. A large number of tones was exported in 2003 to the United State whose impact was the most profitable exported products. Exportation of Phosphate also had a significant impact on the Jordan economy as it yielded lots of profits. In the year 2005, Jordan was considered as one among the top raw phosphate producing nations in the world. In spite of making significant profits from potash and phosphate, there was the production of smaller minerals such as copper ore, unrefined salt, manganese and gypsum. In addition, there was still the production of pharmaceutical, fertilizers and cement whose contribution to the economy was still significant. However, construction was the most promising sector. Foreign enterprises that have moved to Jordan for business or pleasure purposes have greatly impacted an increased demand for offices and residential houses. Over the past several years this increased demand has been witnessed thus contributing towards the economy of the nation (Dentz, 2014). As a result of a free trade agreement between Jordan and the United State of America, the demand for houses and other business related enterprises has rapidly increased the demand for accommodation facilities. Foreign income in return boosts the economy hence facilitating its growth. Exportation is also facilitated by the duty-free access to the global market.

Jordanian Economy Sector

An increased market for already made goods and services has been enhanced by Jordan’s free trade agreement. The agreement was made between the US and the Jordan nation (South & Newsome, 2017). This agreement rebukes all the trade prohibition and reduces the duty imposed in the exportation and importation of goods and service. In addition, another free trade agreement was made between Canada and Jordan. Furthermore, Jordan’s surplus of industrial areas is offering enhanced infrastructure, low utility cost and tax incentives. The zones are acting as a link to advanced development (Moyer & Harper, 2011). The economy is stimulated by the relatively high skills availability hence promoting the investment. Despite the fact that the nation benefits from the exportation of these products, it is also faced with a couple of challenges. Jordan is vulnerable to price fluctuations since it depends on the importation of raw materials. It is always difficult to make developments due to lack of water and power consistency. Despite these encounters, Jordan’s economy still thrives as a solid source of foreign currency is facilitated by the exportation of fertilizers and the pharmaceutical businesses.

Jordan as a free economy nation has a surplus of industrial sectors and distinct economic sectors aimed at snowballing exports and making Jordan an industrial giant. Mafraq SEZ is dedicated to logistics and industries hoping to become the regional logistics hub with road, rail and air links to the neighboring nations (Abu-Dalbouh, 2013). The strategy does not stop at that but it intends to go viral to the global economy such as in the Persian Gulf and Europe. The main aim is to ensure satisfaction of the local demand and reducing dependency levels on the imports. The construction of the railway transport is going to have positive impacts on the economy of the nation.

Jordan’s economy is greatly affected by the challenge of energy as it poses a major drawback. Prompted by the surge in the oil prices, the Jordanian administration has responded with an ambitious strategy for the segment. An investment program is used to curb the challenge of the Jordanian lack of local resources (Boyle, Examining geothermal energy, 2013). The program intentions are a long-term strategy of reducing the reliance level of imports by the natives. The Jordanian administration also publicized in the year 2007 that it would scale back grants in several areas such as energy sector. Especially, the energy sector where there have traditionally been deteriorating subsidies for electricity and fuel (Boyle, Examining wind energy, 2013). By introduction of subsidies, this will invite more investors into the market segment hence increasing the competition. Increase in competition propels production of high-quality goods and standards. Furthermore, increased competition reduces the prices of goods and service making such products and services more available to the consumers.

Unlike most of Jordan’s peers, the nation has no substantial petroleum means of its own and is heavily reliant on oil imports to fulfill its local energy demand. Iraq invasion of 2003 interrupted Jordan main energy supply route. The disrupted oil supply routes were under the control of Saddam Hussein. He had also provided the nation with highly cut-price crude oil via overland truck means. As for now, Saudi Arabia is the main source of oil for Jordan. The other sources of oil include the United Arab Emirates and Kuwait. In the face of persistently high oil costs, interest in the likelihood of exploiting Jordan’s vast oil share means are believed to be recoverable.

Mining and Minerals in Jordan's Economy

The Jordanian transport segment contributes a quarter a significant percentage to the GDP and economy. The Jordanian administration formulated a new national transport plan. The main aim of this plan was to modernize, improve and privatize the segment. With no solution to the continuing security predicament in Iraq, prospects for the nations transport segment as a whole look bright. For both goods and people whose destination is Iraq, the nation will arguably remain one of the major transit points. Furthermore, this improvised transport system is highly going to boost tourism as there will be a smooth movement of tourist from one point to another. Hence, a tourist visiting the Jordanian tourist sites is expected to snowball (Beidas & Poghosyan, 2011). The key events to follow in the near future are the relocation of the national railway system, construction of a new terminal and Aqaba’s main port. Unpredictability in fuel prices is almost unquestionably going to have a negative impact on operational cost. Uncertain fuel prices, however, offer a lot of inducements to boost reserved investments.

Given the nation’s rich history, the state of tourism segment is widely considered as below potential. Jordan is widely known for its diverse geography, Mediterranean climate and ancient ruins. The business is still badly affected by the political instability of the area despite personal requests by the king and refined marketing campaigns. Compared to the Jordanian neighbors, Jordan is considered to be the safest nation to visit in terms of tourism. The peers are frequently engaged in wars which scare away tourist who facilitate the growth of the economy. Jordanian National Tourism Strategy formed in the year 2004, oversees the tourism sector. The plan also ensured a contentious growth of employers into the sector hence raising the living standards (Speight, 2012). The following are the identified priorities by the strategy which comprises of; incentive, adventure, meetings, religious, cultural heritage, conventions and exhibitions, health and wellness. In the past years, the Jordanian marketing budget has increased significantly.

Conclusion

With respect to agriculture and economy in Jordan, the agribusiness is responsible for economic stability. The economy is comprised of various sectors such as transportation, tourism, industries, services and the living standards of the people in a certain region. On the other hand, agriculture comprises of segments such as poultry, horticulture and importation of cereals. Each of these sectors differently affects the economy.

References

Abu-Dalbouh, W. K. (2013). The political economy of the Euro - jordanian economic partnership. Amman: university of Jordan.

Beidas, S., & Poghosyan, T. (2011). An estimated dynamic stochastic general equilibrium model of the jordanian economy. Washington D.C: International Monetary Fund.

Boyle, J. (2013). Examining geothermal energy. Minneapolis: Clara House books.

Boyle, J. (2013). Examining wind energy. Minneapolis: clara house books.

Carew-Miller, A. (2016). Jordan. Philadelphia: Mason Crest.

Dentz, J. (2014). Public housing: A tailored approach to energy retrofits. Golden: department of energy, building and technologies office.

Dept, I. M. (2017). Jordan. Washington D.C: international monetary fund.

In Jalilvad, D. R., & In Westphal, K. (2018). The political and economic challenges of energy in the middle east and north africa. Milton Park: Routledge.

In Orrenius, P. M., In Canas, J., & In Weiss, M. (2015). Ten-gallon economy: sizing up economic growth. New York: Palgrave Macmillan.

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Moyer, T., & Harper, G. (2011). The new earthwork: Art, action, agency. Hamilton: ISC press.

Parker, C. N., & Warde, D. M. (2011). Economic and political issues in the middle east. New York: Nova science publishers.

Pierce, M. A. (2012). Encyclopedia of energy. Ipswich: Salem press.

South, C., & Newsome, J. (2017). Jordan. New York: Cavendish square publishing.

Speight, J. G. (2012). Shale oil production pocesses. Burlington: Elsevier science.

Tobin, S. A. (2016). Everyday piety: islam and economy in Jordan. Ithaca: Comell university pres