Instability within the region has undermined Jordan’s economic prospects. The kingdom’s natural resources are limited to phosphates and agricultural produce, and it is dependent on foreign aid, of which the United States is the main provider. Nevertheless, its domestic competitiveness is good, as measured by the movements in the relative price of consumer and wholesale goods, although this may reflect the favourable effects of trade shock.
The economy has been growing solidly, and broad economic reforms have been applied in an effort to improve living standards over the long term. Jordan joined the WTO in 2000, and exports have significantly increased under a free-trade accord with the US. The government also ended subsidies for petroleum and other consumer goods in 2008 in an effort to control the budget. This has made Jordan more attractive for foreign investment. Foreign trade and investment stands at 127% of GDP, significantly higher than Jordan’s regional counterparts, and this is reflected in a strong openness score overall. However, these positive features are not continued by the low levels of capital investment, which will need to be tackled, and the costs of starting a business remain high, indicating another area on which to focus regulatory reform.
Jordan has a large potential reserve of human capital, at least in terms of mass education. It has by far the most highly educated population in the region, with its workers averaging 4.12 years of secondary schooling. However, it has one of the youngest populations among lower-middle income countries: 38% of the population is under the age of 14, according to World Bank figures, and the fundamental problems of poverty and high unemployment remain.
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Jordan is a middle-income country with incomes of around $5,200 per capita, indicating that poverty likely remains a problem. It shares a high level of religious faith with other countries in the region, a factor which tends to correlate with higher levels of self-reported wellbeing.
While official unemployment figures stand at around 13.5%, unofficial estimates are more than twice as high. For those in the workforce, average working hours are estimated at more than 62 hours per week outside the agricultural sector. This is very high by regional standards, and suggests that Jordanians have only a limited amount of leisure time.
The health service achieves high personal satisfaction with health, and health-adjusted life expectancy stands at 61 years. This is the highest in the region, excluding the much wealthier Gulf nations, and can be attributed to consistent investment of more than 25% of GDP (according to World Bank figures) in human development expenditure such as education, health, and social security.
As with many nations in the region, limited natural fresh water resources, over-grazing, soil erosion and desertification take their toll on the environment. Competition for resources has been further heightened by the influx of large numbers of Iraqi refugees fleeing the war. . Perhaps as a result of such stresses, community life scores are below average in Jordan. However, family life scores are better, with the incidence of divorce remaining relatively low at 0.7%g, and widowhood at 2.9%g.
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