Jordan between two deficits and ambition: When will self-reliance be achieved?

Ammon

7 days ago

In a small and open economy like Jordan's, self-reliance is no longer a distant national aspiration—it has become an urgent strategic necessity for ensuring stability and safeguarding economic sovereignty. Yet, the latest financial indicators highlight the magnitude of the challenge ahead. By March 2025, public debt had reached 35 billion dinars, equivalent to 91.5% of GDP, excluding the debts of the Social Security Investment Fund. The fiscal deficit, meanwhile, stood at 2.26 billion dinars, or 7.6% of GDP. Together, these figures reveal a persistent and structural gap between what the economy produces and what it spends.
Although domestic revenues rose by 7% thanks to recent tax reforms, Jordan still relies on foreign grants and aid amounting to roughly 900 million dinars annually. Dependence on external funding to cover current expenditures leaves the economy vulnerable to shifts in regional politics and the volatility of donor commitments. A more sustainable approach could include debt-for-development swaps—redirecting debt obligations toward financing productive national projects. This method, successfully implemented in other countries, can both reduce debt levels and stimulate economic activity.
The trade deficit tells a similar story of structural imbalance. In 2024, it reached 9.68 billion dinars, reflecting more than just a statistical gap—it is evidence of limited domestic production capacity. Imports totaled almost 17 billion dinars, while exports amounted to 9.43 billion dinars. This gap underscores the urgent need for effective import substitution policies—expanding domestic production of goods that currently come from abroad. Such strategies would help narrow the deficit, strengthen economic resilience, and reduce exposure to external shocks.
Against this backdrop, the Economic Modernization Vision stands out as a comprehensive framework for addressing these challenges. It outlines clear targets for boosting exports, expanding industrial capacity, and diversifying production. However, the Vision's success will depend on translating its goals into concrete initiatives directly tied to reducing both fiscal and trade deficits, and on accelerating investment in productive sectors rather than focusing predominantly on infrastructure or traditional services.
The energy sector illustrates both progress and untapped potential. Renewable sources now contribute 27% of electricity generation, yet the annual energy import bill still exceeds 4 billion dinars. Morocco's experience—rapidly cutting its import dependence through large-scale solar and wind projects—demonstrates what is achievable with strong political will, targeted investment, and streamlined regulation. Jordan's Vision rightly seeks to follow a similar path, but faster execution will be essential.
Mining offers another pathway to greater self-reliance. A significant share of Jordan's phosphate and potash exports is still sold in raw form, limiting revenue potential. Companies like Arab Potash and Jordan Phosphate Mines have begun investing in downstream industries to increase value-added, yet these efforts must be scaled up. Morocco and Chile provide valuable examples of how deeper processing can double export revenues, create high-quality jobs, and expand industrial capacity.
Agriculture and the food industries remain underexploited opportunities. Rwanda's success in increasing agricultural productivity by over 40% within a decade—through modern technology, farmer training, and efficient supply chains—shows what targeted reforms can achieve. Adopting similar strategies in Jordan could help close the food gap, reduce agricultural imports, and strengthen rural economies.
If Jordan can align its policies, investments, and private-sector partnerships under a clear and measurable action program, the path toward self-reliance could be achieved within seven to ten years. This requires turning the Economic Modernization Vision from a policy document into a results-driven daily work plan—prioritizing domestic production, systematically reducing both deficits, and building strategic economic resilience. Only through such commitment can Jordan protect its decision-making autonomy, shield itself from external shocks, and secure sustainable, inclusive growth.