The FINANCIAL -- Jordan has embarked on a “Green Growth” drive that aims to tap into natural resources, lessen dependence on fuel imports and create decent jobs in a nation saddled with spiraling unemployment and a sluggish 2.3 percent projected economic growth for 2017.
The World Bank’s Spring 2017 issue of the Jordan Economic Monitor, entitled “The Green Economic Boost,” noted the Government’s revised unemployment figure of 18.2 percent, affecting mostly women and youth. Regional turmoil continues to be the key factor behind the contraction with conflicts in Syria and Iraq depressing the Kingdom’s commercial and trade lifelines. The exogenous shocks have contributed to Jordan’s slow economic performance of only 2.0 percent in 2016, compared to the recently revised World Bank average of 3.2 in the Middle East and North Africa for the same year.
The Jordan monitor was unveiled today at a ceremony in Amman, hosted by the Shoman Foundation and cosponsored by the Ministry of Planning and International Cooperation and the World Bank. The event featured strong Government commitment to its comprehensive economic reform drive, and World Bank resolve to support Jordan’s economic recovery efforts, according to the World Bank.
The Government of Jordan recently launched the Jordan Economic Growth Plan which aims to double economic growth over 2018-2022. Last month it also launched the National Green Growth Plan which focuses on the energy, water, waste, transport, tourism and agriculture sectors.
“The World Bank remains committed to helping the Government of Jordan realize the goals of the newly launched Jordan Economic Growth Plan and Green Growth aspirations,” Kanthan Shankar, the World Bank’s Acting Director for the Middle East, told the assembled audience of public and private sector actors, among many others. “Jordan has an opportunity to vitalize green growth and undertake climate action as part of a sustainable solution to fiscal, economic and climate vulnerabilities. Such actions would spur job creation, reduce dependence on commodity imports, attract foreign direct investment and leverage international climate finance.”
“The newly launched Jordan Economic Growth Plan for the years 2018 to 2022 bodes well to stimulate some reforms,” said Lea Hakim, the World Bank Economist for Jordan, and co-author of the report.
“But short of a positive shock such as the reopening of trade routes with Iraq or a peaceful conclusion to the Syrian conflict, and given fiscal and monetary policy tightening, it is difficult to foresee an impactful jumpstart to growth unless strategic structural reforms are implemented at a quicker pace.”
Hakim added: “To enable achievement of the Green Growth Plan, further analysis is required to design public policy in line with macroeconomic and fiscal objectives and strengthen private sector engagement. The Ministry of Finance has a leading role in this regard in adopting climate-smart fiscal policies and mobilizing climate finance.”
Elsewhere in the report, economists examined the impact of water and electricity tariff reforms and reduced subsidies undertaken between 2010 and 2016. It concluded that the short-term welfare impacts on households have been limited so far and modest by international standards. However, to address the impact of any future fiscal adjustments (including future utility price reforms) on the most vulnerable, Jordan would need improved mechanisms to target social protection services for the poor.