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Jordan Composition of Exports and Imports
When it became apparent that Jordan could not shift the trade
balance in the short term by dramatically reducing imports and
increasing exports, government economic planners attempted to alter
the composition and direction of external trade by slowly pursuing
a two-pronged policy. Jordan tried to improve its gross barter
terms by exporting products with higher value added; for example,
prices of consumer goods tended to be higher and more stable than
those of raw materials. Likewise, Jordan tried to increase the
efficiency of its imports by increasing imports of capital goods
and raw materials while lowering imports of consumer goods. The
concept was that Jordan should import relatively more and export
relatively less of goods that contributed directly toward economic
growth.
The changes in the relative composition of exports were more
pronounced than changes in the relative composition of imports
between 1974 and 1986, according to figures compiled by the Central
Bank. Nonetheless, changes were not dramatic in either category.
Consumer goods declined from 45 percent to about 37 percent of
total imports, but capital goods also declined from 26 percent to
23 percent of total imports. Raw materials increased from 19
percent to 34 percent of total imports, but this rise primarily
reflected a growing oil bill, as Jordan could no longer obtain oil
at discount prices. Raw material exports declined from 53 percent
to 38 percent of total exports, capital goods exports were cut in
half from 12 percent to 6 percent, and consumer goods exports were
boosted from 35 percent to 56 percent of total exports. Phosphates
continued to generate 20 percent of export earnings.
Although the shift in external trade composition appeared to
coincide with government policy, economist Rodney Wilson has
pointed out that part of the shift was illusory. Customs
classifications may have been misleading and also may have changed
over time. Many consumer imports were listed as capital imports and
raw material or capital goods exports often were listed as consumer
goods exports. For example, fertilizers, a major export, were
listed as consumer goods.
Because the categorization of imports and exports according to
their value added or ultimate economic disposition was ambiguous,
a more specific breakdown of exports and imports by product was
warranted. In 1987 energy imports made up approximately 13 percent
of the import bill; food imports constituted about 11 percent of
the import bill. Basic manufactures, such as textiles, iron, and
steel together represented 9 percent of import cost; machinery and
transportation equipment constituted 20 percent, and imports of
miscellaneous manufactured articles constituted 10 percent of
imports (see
table 12, Appendix). In 1987 28 percent of Jordanian
export earnings were of chemical products, including fertilizers.
Raw phosphate exports generated about 25 percent of export
earnings, and potash exports accounted for about 11 percent of
export earnings. Food and food products constituted about 8 percent
and basic manufactures, such as cement, about 4 percent (see
table 13, Appendix).
At least some of the shift in import composition appeared to
contribute to economic growth insofar as it was correlated with GNP
growth. In the early 1980s, the average value of consumer goods
imports as a percentage of GNP dropped marginally, from 23 percent
to 21 percent, while capital goods imports increased from 15
percent to 23 percent of GNP. The value of total imports as a
percentage of GNP climbed almost 40 percent between 1973 and 1983,
reaching about 87 percent; however, the rate of this growth slowed
during the period and was outpaced by GNP growth.
Data as of December 1989
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