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Oxford Business Group - Jordan 2012 Report

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Page 1: Oxford Business Group - Jordan 2012 Report
Page 2: Oxford Business Group - Jordan 2012 Report

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Country ProfileRich history and natural attractions draw in touristsPolitical and social stability supports business growthAn educated population pushes the economy forwardNew potential for energy production is being discovered

Page 3: Oxford Business Group - Jordan 2012 Report
Page 4: Oxford Business Group - Jordan 2012 Report

COUNTRY PROFILE

The vast majority of the population lives in major metropolitan areas

Amid regional turbulence, Jordan remains relativelystable and cohesive. This is a key advantage that thekingdom offers to foreign investors, who continueto use the country as a base for targeting growthmarkets in the region, and who are stepping up theirinvolvement in core domestic industries such asenergy, health care and information technology. Jor-dan’s stability, along with its culture of toleranceand friendliness, is also a key point of attraction fortourists, who annually flock to Amman, Petra, WadiRum and Aqaba in impressive numbers.

Rising budget deficits and energy prices, as wellas persistently high unemployment and a severe lackof natural resources are key issues for the govern-ment. Moreover, recent administrations and poli-cies have emphasised that economic reforms mustbe coupled with changes to the voting system thatexpand and deepen the scope of political participa-tion. To this end, the government has recently estab-lished a national dialogue committee, and promul-gated a number of constitutional changes and moreliberalised election laws.POPULATION & DEMOGRAPHICS: Jordan’s popu-lation stands at roughly 6.5m. Out of this total, anestimated 82% live in major urban areas such asAmman (home to nearly 40% of the population),Zarqa, Irbid, Madaba and Aqaba. As in many MiddleEastern countries, young people constitute a majorportion of the population, with 95% of people in thekingdom under the age of 65. The median age amongall Jordanians is 22, with the median age for womenat 22.4 and for men at 21.8.

Additionally, current population figures do nottypically include the number of refugees residing inJordan, which has the most refugees in the world per-capita. Palestinian and Iraqi refugees have longresided in the country, and the numbers are on therise with a recent influx of Syrian refugees due topolitical unrest in the neighbouring nation. As aresult, the continually growing refugee population

has placed even greater pressure on the country’spublic infrastructure and limited resources.

The quality of Jordanian health care is evident inits average life expectancy of 80 years and its sta-tus as a major medical tourism destination. Overall,expenditures on health care make up about 4.5% ofthe kingdom’s gross domestic product (GDP).

Jordan’s population is not demographically diverse,with 98% of citizens classified as Arab, and the oth-er 2% equally divided between Circassians and Arme-nians. Whereas 92% of Jordanians are Sunni Muslims,about 6% belong to Christian communities. The restmostly belong to small groups of Druze and ShiaMuslim communities throughout the country.

The official language of Jordan is Arabic, yet Eng-lish is also widely spoken, especially among theyounger generations and the business community. EDUCATION: Boasting one of the best school sys-tems in the region, Jordan prides itself on having ahighly educated population. More than 13% of gov-ernment spending goes towards primary and sec-ondary education. Although the literacy rate formales (95%) is higher than for females (88%), womenoutnumber men in higher education institutions.

Education is compulsory for all children under theage of 15 and is provided by the government at nocost. Usually a child’s education begins at age fourwith two years of preschool, followed by 10 years ofprimary education and two years of secondary schoolor vocational training to finish at 16 years of age.

Upon completing secondary coursework, studentsare required to take the Certificate of SecondaryEducation Exam, a test that largely dictates whatcareer paths learners can pursue.

Jordan is home to several high quality academicinstitutions, including the University of Jordan, wide-ly regarded as one of the best schools in the region.Perhaps the strongest testament to the quality ofeducation is the high number of Jordanians who arerecruited by employers to fill vacancies in nearby

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THE REPORT Jordan 2012

Making progressA highly educated population possesses the key to future development

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COUNTRY PROFILE

nations, particularly in the Gulf Cooperation Coun-cil (GCC) countries. The flipside to high quality edu-cation, however, is that this has resulted in braindrain, with many of the most talented Jordaniangraduates leaving home for higher paying jobs andseemingly better benefits packages abroad. POLITICS & GOVERNMENT: Jordan gained inde-pendence in 1946, established its first constitutionin 1952, and since then has been governed by aconstitutional monarchy. Since its initial ratification,the country’s constitution has been amended sev-eral times, most recently in late 2011 under decreefrom the Royal Court. His Majesty King Abdullah IIcame into the position in 1999 after the death ofhis father, King Hussein. The king holds executiveauthority with the power to sign, execute and vetoall laws. Appointed by King Abdullah II in May 2012,the current prime minister, who serves as head ofgovernment, is Fayez Al Tarawneh. The Jordaniancabinet is appointed by the prime minister in con-sultation with the king.

Legislative power rests in the National Assembly,which consists of two branches: the Senate and theChamber of Deputies. The Senate has 60 memberswho are appointed by the king for fixed four-yearterms. The Chamber of Deputies has 120 popularlyelected members, 12 seats of which are reserved forwomen, nine are reserved for Christian candidates,nine for Bedouin candidates and three for those ofCircassian descent. Under a newly proposed elec-tions law, the total number of seats in parliamentwould be increased to 138, while the numberreserved for women would be raised to 15. GEOGRAPHY: Sharing borders with Israel, the WestBank, Syria, Iraq and Saudi Arabia, Jordan is locatedin the heart of the Levantine region. It occupies atotal area of 89,342 sq km, roughly the same size asPortugal or the United Arab Emirates. Jordan’s coast-line consists of a small sliver on the Red Sea in thesouth of the country, home to the port city of Aqa-

ba. In 1965 Jordan and Saudi Arabia negotiated anagreement regarding their respective borders thatresulted in an exchange of territory extending theJordanian coastline by about 18 km to its current totalof 26 km. In total, Jordan claims three nautical milesas its territorial sea.

Jordan’s terrain can be divided into three distinctareas, from west to east: the Jordan Valley, the Moun-tain Heights Plateau and the Badia desert region. TheJordan Valley forms part of the larger Great Rift Val-ley that stretches from northern Syria to centralMozambique. Most of Jordan’s major cities, includ-ing Amman, Zarqa and Irbid, are located in the cen-tral Mountain Heights Plateau.

The Badia desert region accounts for the major-ity of the kingdom’s total area. The highest point inthe country is Jabal Umm Al Dami, in the south nearthe Saudi Arabian border, at 1854 metres. The low-est point in the country, and in fact the world, is theDead Sea, at 408 metres below sea level. NATURAL RESOURCES: Jordan is considered to beone of the poorest countries in the world in termswater resources – a disadvantage that has forcedJordan’s policymakers to partake in some creativesolutions in partnership with its neighbouring water-scarce countries, international development organ-isations and foreign investors. Energy resources arealso a significant issue, as the kingdom possessesfew oil or natural gas reserves and must import fuelfor nearly all of its needs.

Recent turmoil in Egypt, which has led to severalattacks on the Sinai gas pipelines, has resulted in sky-rocketing energy costs and shortages. As a result,Jordan is exploring new forms of alternative energysuch as solar and wind power, as well as oil shale.According to some estimates, Jordan has the world’sfourth-largest volume of oil shale reserves.

In addition, newly discovered deposits of uraniumhave made nuclear energy a potential solution toenergy shortages. As a step in that direction, Jordanhas signed more than a dozen international coop-eration agreements in this field.

One natural resource that is plentiful in Jordan isits phosphates. The country is one of the largestexporters of phosphates in the world. Combinedwith potash, the two minerals account for around33% of the nation’s total annual exports. CLIMATE: Jordan has a Mediterranean climate. In thewinter and early spring the daytime high tempera-tures average around 13°C. Cooler temperatures arenot uncommon, however, and occasionally there issnowfall. Nearly all of the country’s annual precipi-tation falls between the months of November andApril, making way for dry, hot summers.

Jordanian summers are not nearly as mild as its win-ters, with daytime highs averaging around 32°C. InJuly and August, the hottest months of the year, thethermometer can read above 40°C. As Jordan is mainly a desert environment, 90% of the nation’s territory receives less than 200 mm of rainfall each year, with some areas receiving as little as 25-50 mm.

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The education system is one of the best in the region, making it a competitive advantage for the country

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