As of 1996, approximately 6.7% of the Jordanian labor force was employed in agriculture, forestry or fishing. In 1997, this sector accounted for 6% of Jordan's GDP at factor cost.

The primary obstacle to further agricultural development in Jordan is the Kingdom's shortage of water. Over 91% of the country's land mass is classified as desert or arid desert, and irrigation agriculture currently accounts for about 72% of Jordan's entire water usage.

About 70% of Jordan's total production of fruits and vegetables comes from the Jordan Valley (Ghor), although it comprises only about 15% of the country's arable land. The Ghor's year-round growing climate boosts Jordan's economy by allowing it to export fresh fruits, vegetables and herbs all year round, and especially during the winter, when such produce is difficult to find. When comparing to 1995, agricultural exports grew by 2.4% in 1996, thus representing approximately 15.4% of Jordan's total exports.

Agriculture in the Jordan Valley has been highly productive, due in part to a number of integrated development projects. The government and private sector continue to work together to effectively employ water-saving techniques such as drip irrigation, pivot irrigation and plastic hothouses. On average, three crops are produced annually in the Jordan Valley, which is the source of most of Jordan's tomatoes, cucumbers, citrus fruits, melons, cabbages, bananas, aubergines, potatoes and onions.

Meanwhile, wheat, barley, lentils and chickpeas are grown exclusively in the rain-fed upland areas, which comprise the vast majority of Jordan's arable land. Agriculture in this area depends heavily on the weather, resulting in widely fluctuating returns-rainfall in the highlands varies an average of 37% from year to year. Beans, tobacco and sesame are also grown in this area.

Industry

Jordan's industrial sector is composed mainly of the "mining and quarrying" and "manufacturing" subsectors. Large-scale industries consist mainly of phosphate and potash mining and the industrial production of cement, fertilizers and refined petroleum.

Industrial growth continued in 1997 with the value added generated equaling 16.7% of Jordan's gross domestic product. Industry in 1997 employed 13.8% of the country's labor force.

Investment in the industrial sector displayed a moderate quickening of activity in 1997 in comparison to 1996. In 1997, 301 new industrial companies were registered with a total capital of US$ 50.9 million, against 301 companies with a capital of US$ 40.1 million in 1996. Five new public share-holding companies issued public subscription shares through the Amman Financial Market with a total capital of US$ 37.5 million. Public shareholding companies account for 74% of total capital of the industrial companies registered. One sign of the Kingdom's manufacturing expansion can be seen in the sheer rise of the number of industrial enterprises. In 1985, Jordan's manufacturing base consisted of 9300 companies, while currently the number stands at around 19,400.

A policy of export-oriented growth has necessitated the expansion of heavy industries such as phosphate and potash mining. As phosphates and potash are Jordan's main natural resources, their export provides a major source of revenues. In 1996, potash and phosphate exports together accounted for US$ 328 million, approximately 21.8% of Jordan's domestic export earnings. Jordan ranks among the top three exporters of phosphates in the world. In 1997, the mining and quarrying sector grew 2.9%, with phosphate and potash production equaling 5.89 million tons and 1.41 million tons respectively.

Jordan has in recent years been focusing on high value-added manufacturing industries. Pharmaceuticals, foodstuffs, consumer products and ready-to-wear garments are among the most prominent of Jordan's manufacturing industries. The growth of Jordan's pharmaceutical industry has been particularly impressive. From its early beginnings in 1965, this industry has gained a reputation in the region for pioneering in the production of high quality goods. Jordanian pharmaceuticals have successfully penetrated more than 30 export markets, including the US and Europe. In August 1996, Hikma Pharmaceuticals became the first Arab company to export pharmaceutical products to the United States.

Jordan's pharmaceutical industry is also one of the most successful local industries in foreign currency earnings. In 1997, pharmaceutical exports earned Jordan US$ 186.4 million. With entrepreneurs expecting a boom in exports to Iraq-once UN sanctions are eventually lifted-as well as to Israel, the West Bank and East European countries, a number of new plants are currently being built. The future of the pharmaceutical sector in Jordan is bright, and the industry still has significant potential for upgrading and expansion.

Another strong area of Jordan's manufacturing sector is in detergents, soaps and toiletries. Although 230,000 tons valued at US$ 53 million were exported in 1997, a trade deficit of US$ 10.2 million still exists today. However, it is worthwhile to note that exports from this industry increased by 68% between 1991 and 1997.

At present, companies manufacturing electronics and electrical household appliances have recently begun to produce satellite dishes. These firms constitute a valuable part of Jordan's industrial base whose role and importance is destined to increase in the future.

Energy

In recent years, Canadian, Japanese, American, Austrian and South Korean companies have explored for oil in Jordan, and according to Jordan's Natural Resources Authority, the country's resources still remain relatively untapped.

In 1987, natural gas was discovered in Jordan, and experts have estimated that Jordan holds between 150-400 billion cubic feet of natural gas. The five wells currently operating have an annual capacity of over 5.5 billion cubic feet. Natural gas turbines currently power a portion of Jordan's electrical needs, and gas could eventually be used to generate all of the country's electrical power, in the process replacing up to 40% of fuel imports.

Estimates have placed Jordan's shale oil total at around 40 billion tons, located mostly in the Lajjoun area 100 kilometers south of Amman. This amount could yield up to four billion tons of crude oil. Recent advances in shale oil extraction techniques have brought production costs down significantly, and an upturn in world oil prices could make Jordan's shale oil reserves a very valuable commodity.

Construction

After a period of exceptional growth in 1992 and 1993, due to the demand for housing for about 300,000 Jordanians returning from the Gulf, the construction sector returned to a more balanced growth rate in 1994 and 1995. It grew by 11.7% in 1994, a growth which created a surplus in housing units and a market glut. As a result, the sector only grew by 0.8% in 1995 at constant prices. In 1996 and 1997 the growth in the sector was negative as activity decreased by 15.8% and 6.4%, respectively.

However, investment in the construction sector remained at a high level during 1997. This can be further seen as 61 new construction companies with a total capital of JD 3.3 million were registered during the past year. There are now more than 1607 registered contracting companies in Jordan. During 1997, the value of construction contracts was estimated at around US$ 1.48 billion, of which 76% was for private sector work and 24% for the public sector. Overall, this sector registered a total growth rate of –15.6% in 1997, and contributed 6.5% of the GDP in that year.

Jordan has one of the lowest land and construction costs in the region. Locally produced quality materials are available at competitive and stable prices, thus increasing the profit attraction of this industry. Stone is quarried locally, cement is produced locally and steel reinforcement bars are available locally, as well. Jordan also produces its own ceramic tiles, sanitary fixtures, kitchen cabinets, timber joinery, air conditioning and heating equipment, electrical items, elevators, pipes and wires. These are all available at competitive prices, providing savings in customs duties and overseas transportation.

Jordan's high-caliber labor force makes it well-equipped to support a dynamic construction industry. In 1997, there were 36,020 registered engineers and architects in the country, of which 43% are civil, 23% electrical and 19% mechanical engineers.

Looking to the future, Jordan's construction industry is increasingly collaborating with international partners. Many joint ventures are being formed between international consultants and contractors and local firms in order to improve competitiveness and capitalize on increased investment in infrastructural projects such as airports, hotels, refineries, communications and broadcasting ventures. International firms are providing specialized technical expertise, while local firms are contributing with their technical services.

Jordanian consultancy firms are also becoming increasingly active abroad in various regional projects, especially in Iraq, Yemen, Saudi Arabia, the PNA territories and the UAE. Jordan's construction industry is expected to be one of the prime beneficiaries of an eventual peace agreement between Israel and the PNA. Widespread redevelopment of the infrastructure in the PNA is required, and Jordan's construction industry is well-positioned, both geographically and politically, to capitalize on this opportunity. At present, there are more than 3000 registered Jordanian consultants and engineers working in the West Bank and Gaza. Likewise, the eventual lifting of sanctions promises to spark an infrastructural investment boom in Iraq, and Jordan's construction sector is poised to benefit from this opportunity as well.

Transport and Communications

Because of its unique location as a regional entrepot, Jordan is used by many countries as a convenient distribution center for Arabian hinterland locations. To the east and south are two of the world's largest oil producers, Iraq and Saudi Arabia, while to the north Syria connects Jordan with Turkey and Europe. Meanwhile, to the west Jordan faces the PNA territories and Israel, with its Mediterranean ports. While the Arab-Israeli conflict and, more recently, the UN sanctions imposed on Iraq, have prevented Jordan from exploiting its strategic location, it is hoped that the advent of peace will open a new vista of opportunity for Jordan's transportation system. Moreover, expanded access and improved quality in Jordan's telecommunications infrastructure will further link the country to the global information network.

The transport and communications sector enjoyed a banner year in 1994, with a growth rate of 6.8%. This improvement continued in 1997 at 8.9%, and the sector contributed a 15.7% share to GDP at constant factor cost.

The government has invested considerable sums in improving and expanding Jordan's network of roads, resulting in a relatively extensive, well-maintained system placing the country in the nexus of the regional transportation grid. Jordan's classified road network covers approximately 7120 kilometers, of which primary roads constitute 41%. Yet, in spite of the excellent condition of Jordan's road network, the expected surge in intra-regional trade will require an expansion of the network's capacity, efficiency and quality.

In contrast to Jordan's extensive road links, its railway system is limited. The Kingdom's 618 kilometers of working railroad track are managed by the Hijaz Railway and the Aqaba Railway Corporation. The Hijaz Railway connects Damascus, Syria, with Madina, Saudi Arabia, via Jordan. There is a weekly passenger service between Amman and Damascus. In the south, rail service is used to transport raw phosphate from the mines to Aqaba, where it is either loaded onto ships for export of used by the nearby fertilizer complex.

Although rail transport currently plays a relatively minor role in Jordan's economy, there are proposals for over 1300 kilometers of new railway, including a line from Amman to Aqaba, developing Ma'an as a major national and regional transit point. Other possibilities include extending the system southward towards Saudi Arabia and also westward, linking the system to Israel's Mediterranean coast. Development of the Amman-Aqaba railway will facilitate more efficient transportation of phosphates, while the 70-kilometer spur linking the Amman-Aqaba line with Israel would not only expedite trade access to the Mediterranean, but would also improve ease of passage north to Beirut and south to Gaza. A rail link to Israel would benefit Jordan's potash industry by allowing access to export facilities on the Mediterranean coast.

Due to its strategic location, the port of Aqaba plays an important role as a transshipment center for neighboring countries of the region. Its deep-water port is one of the most efficient in the Middle East, and stands in an ideal location to handle trade linking nations of the Far East with Jordan, Israel, the PNA territories, Syria, Lebanon and Iraq. The port is well-equipped with roll-on/roll-off facilities to handle conventional, container, and bulk cargo vessels. It is served by an airport, excellent roads to the north, and a freight railway primarily used to link the port with Jordan's phosphate mines. Aqaba is also linked to the Egyptian sea port of Nuweibe' by regular ferry services.

For traders, Aqaba has several distinct advantages over its chief competitor, the neighboring Israeli port city of Eilat. To begin with, Eilat's port is almost entirely hemmed in by resort hotels, limiting expansion, while Aqaba's port is located in a more open area. Secondly, Aqaba enjoys a huge labor cost advantage, with wages averaging only about one-seventh of those in Israel.

In 1996, the port of Aqaba handled about 2750 vessels, 1.1 million passengers and a total of approximately 12 million tons of cargo. Although future prospects for the port depend heavily on the easing of UN sanctions against Iraq, southbound trade with the Far East is becoming increasingly important, amounting to around 60% of the total trade operated by the port of Aqaba. The port has the potential to expand its cargo handling capacity to 30 million tons per year. However, it still requires modernization and upgrading of its facilities.

Jordan's air transportation is handled by three airports: Queen Alia International Airport, Amman Civil Airport and Aqaba International Airport. Total traffic via the three airports averages 1.8 million passengers and 65,000 tons of cargo per year. Queen Alia Airport is served by 22 international airlines, including Royal Jordanian Airlines, the national carrier. Royal Jordanian now flies regularly to 49 cities from the United States to the Far East. One project currently under consideration is the expansion of the Aqaba airport so that it may assume the role of a regional air hub. This would consolidate the air traffic currently served by Israel's Eilat airport together with that of Aqaba airport, thus enhancing the economy of southern Jordan.

Jordan has a modern communication infrastructure, with reliable direct dial international telephone and fax services available throughout Jordan and to most countries. The recently corporatized Jordan Telecommunications Corporation (JTC) has expanded the line network capacity from the 1996 figure of 355,000 to 615,000 in 1998. In addition to the demand for basic services, there is a fast growing demand for other services, including cellular phones, pagers, data transmission networks, and private satellite networks. Since the introduction of a cellular phone network in September 1995, use has skyrocketed. By the end of 1998, all of Jordan is expected to be linked via cellular networks. The Jordan Telecommunications Corporation will be issued a cellular license to become the second cellular telephone provider in the Kingdom by the end of 1998.

Jordanian companies have provided Internet services through local networks since 1994, and the number of subscribers among individuals and companies has grown rapidly. In March 1996, Jordan joined the information superhighway when Sprint International launched an on-line Internet link for the country. The growth of this sector has been nourished by the business community, who are turning to the Internet for access to a wealth of information and as a solution to their communications strategy. Jordanians enjoy complete access to the Internet without governmental restrictions or monitoring. Internet service promises to be one of the most lucrative areas in the telecommunications sector.

Industrial Estates

Jordan's industrial estates are equipped with advanced infrastructure facilities including roads, maintenance facilities, utilities, sewage and disposal treatment plants. Additional services include vocational training centers, banking services, customs clearing centers, free zone areas, and labor, insurance, advertising, auditing and marketing offices. Branches of the Ministry of Trade and Industry, the Amman Chamber of Commerce and the Jordan Export Development Corporation (JEDCO) are also present. Jordan's two industrial estates are located in the cities of Sahab and Irbid.

The Amman Industrial Estate is located near Amman in the city of Sahab. Its total area comprises 2.5 million square meters. By mid 1998, Amman Industrial Estate accommodated 354 medium and small industries employing more than 13,700 workers. Within the Amman Industrial Estate, there are 78 foreign, Arab and joint-venture industries. El-Hassan Industrial Estate, located in Irbid, occupies 427,000 square meters, and has 58 projects employing more than 2600 workers.

Land and building facilities are available for purchase or rent at concessionary prices. The industrial estates also provide the following privileges to industries operating on their premises:

• Enterprises operating in industrial estates are exempted from income and social services taxes for a period of two years from the commencement of operations.
• Projects operating in industrial estates are exempted from land and building taxes throughout the lifespan of the project.

This Industrial Estate is nearly fully occupied and due to numerous demands by new investors, the Jordan Industrial Estates Corporation is in the process of developing an area of 202,000 square meters adjacent to the Estate which is expected to be completed by the end of 1998.

Finance and Investment

Jordan has a large and thriving banking and financial services sector. The sector has heavily benefited from Jordan's position as a regional entrepot, and shows great promise for further expansion and diversification. In 1997, the finance and investment sector comprised 22.5% of total GDP.

There are currently 20 banks operating in Jordan, of which nine are domestic, five are foreign, one is Islamic and five are investment banks. At the end of 1997, Jordan had a network of bank branches servicing most parts of the country. Jordanian banks have also opened branches in the PNA territories, hoping to capitalize on the long-term potential for growth stimulated by peace. A total of 48 branches have been opened by eight Jordanian banks there, and the trend in banking expansion is still underway.

Tourism

Jordan is blessed with a rich assortment of historical, religious and geographical attractions, and is determined to effectively market these sites to boost tourism from regional, international and domestic visitors. Tourism is one of the first sectors on which the effect of the peace dividend is unmistakably evident. In 1997, the tourism sector contributed about 6.6% to the gross domestic product. Foreign receipts from tourism in 1997 registered US$ 773.8 million.

The number of arrivals to Jordan in 1997 remained steady in comparison to recent years. However, the distribution of arrivals by nationality shows a clear shift in their composition. While the number of arrivals from Arab countries increased by 5.49%, arrivals from Europe decreased by 4.93%. Tourism from the United States decreased by 0.26%, while that from Canada fell by 6.82%. Tourism from other countries increased by 3.23% in 1997. This low rate of growth was attributed mainly to the ongoing stalemate in Arab-Israeli peace negotiations, terrorist violence in Egypt and episodic tensions between the UN and Iraq. More than 125,625 Israeli tourists visited Jordan in 1997, registering a 3.65% growth over 1996.

Jordan has also focused on integrating itself into the framework of the global tourism industry, and the efforts have begun to pay off. The number of tourists who visited Jordan on package tours has been increasing greatly over the past three years. This increase has also been paralleled by an increase in the number of nights spent in the Kingdom, currently standing at an average of 3.88 days.

According to the Ministry of Tourism, in 1997, there were a total of 188 classified and 161 unclassified hotels operating in Jordan. The number of rooms in the first category increased from 9406 in 1996 to 10433 rooms in 1997. Unclassified hotels accounted for a total of 1962 rooms. An estimated 7815 Jordanians were employed in hotels in 1997.

A sign of confidence in the future of the tourism industry can be seen in the increase in credit extended by licensed banks to the "tourism, hotels and restaurants" sector. New credit in 1997 reached US$ 98.7 million, an increase of 30.6% in comparison with a 1996 growth level of 15.5%.

The outlook for Jordan's tourism sector is quite promising, especially in the context of regional cooperation. Jordan, Egypt and Israel are currently considering the prospects for developing the Gulf of Aqaba into a "Red Sea Riviera," including Aqaba, the Israeli resort of Eilat and Egypt's Sinai resort of Taba. Jordan recognizes that tourism will be a driving force of its economy in coming years, and is therefore working to exploit this dynamic sector to its maximum potential.