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Jordan The Late 1980s
Superficial economic prosperity masked deep underlying
structural problems; in the late 1980s, a number of intractable
long-term economic problems and a host of short-term potential
crises loomed. In the long range, if Jordan's domestic market could
not grow sufficiently to permit the economies of scale necessary to
sustain large manufacturing industries, capital investment and
manufacturing value added would continue to be low; however, this
difficutly might be offset if export markets were obtained. Gross
barter terms of trade would decline further if the volume and value
of manufactured imports rose faster than the volume and value of
raw material exports. The merchandise trade deficit would continue
because imports of certain commodities would continue to be
necessary far into the future. The standard of living as measured
by per capita GNP could eventually decrease as modest real economic
growth was offset by a rapidly growing population. Domestic
unemployment could increase to more than 9 percent as the young
population matured and the domestic work force grew. Although a
price increase for oil could restimulate the Jordanian economy by
reopening Arabian Peninsula markets for goods and services, the
resultant increased oil import bill would offset some of the gains.
In the late 1980s, however, short-term financial problems including
deflation, debt, and devaluation of the
dinar (see Glossary), which
lost 42.5 percent of its value between October 1988 and May 1989,
commanded the government's attention more than did long-term
problems.
Data as of December 1989
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