Friday, May 26, 2006

Jordan Economy

I decided to share some of my thoughts on the Jordanian economy. I have been thinking for the last two years, or maybe even more, that despite the good growth rate in the economy (almost twice the population growth rate,) that Jordanian economy is not out of the woods yet and it will not be for a while. What most people are not noticing is that Jordan seems to be putting the few eggs that it has in one basket. Actually when I say Jordan here, most people think it is the government, when in actuality it is not. Jordan suffers among other things from form what I would call "Mobile shop syndrome" Or "Shawerma place Syndrome" One person opens up a mobile shop and 10 seconds later everyone else opens a Mobil shop next to him.

Now the hottest bandwagon that everyone seems to be jumping on is real estate. That is all nice, but I really do not see what value real estate adds in the long run.

Now regarding the Jordanian industry where I have most of my day to day observations, this is truely where all the eggs are in one basket. And the government is not the one to blame here. For some odd reason, just like mobile shops, everyone wants to open a factory to sell stuff to Iraq, from plastic products to pharmaceuticals. But as usual people have very short attention spans and even shorter memories. I do remember how after the first gulf war, most factories exporting to Iraq almost went bankrupt. This is a fact most people forget. I understand that it is easier to export to Iraq, as other bordering markets are virtually closed( Israel, Syria, KSA) for various reasons. But from what I have seen, Iraq is a viable market maybe for a maximum of 3-4 years. So in the mean time, the industry needs to start thinking differently, it needs to be less traditional, and think about a way to sell outside the Arab region, to sell a large set of products, not only textiles, pharmaceuticals, but other things too.

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