Since the accession of HM King Abdullah II to the throne in February 1999, and building upon the decade of change started by His late Majesty King Hussein in the late 1980s, Jordan has witnessed a marked acceleration in its political, social and economic transformation. Even in light of the engulfing political upheaval, and the vulnerability of the domestic socio-economic dimension to external and regional turbulences, His Majesty, and through the various reforms and initiatives, is resolute on transforming Jordan into a model in the Middle East region.

Throughout the late 1970s and early 1980s, Jordan enjoyed unprecedented economic growth patterns boosted by outside assistance and loans, increased exports to regional countries, and workers’ remittances of Jordanians working abroad. The inflow of foreign capital instigated extensive consumption and investment behavior, both public and private, which remained bountiful up until the crash in oil prices in 1982, after which this inflow began to decrease. The decline in oil prices instigated a major regional economic slowdown, which adversely affected the performance of the Jordanian economy. To resuscitate a collapsing economy, the government embarked on an extensive spending program financed through external borrowing. The consequence was a deteriorating current account deficit, a general rise in prices, and a rapidly mounting foreign debt. This ultimately led to a serious economic crisis by 1988. Encountering grave difficulties with debt management and repayment of loans, the government was compelled to turn to the IMF in 1989 to negotiate debt rescheduling and succumb to a stern economic restructuring program to reinstate a sustainable economic growth pattern. The program necessitated among others, the gradual reduction in fiscal spending, removal of trade barriers, and the lifting of subsidies on all basic commodities. This denoted a radical departure from the former economic practice of "paternalism", which was the prevalent characteristic of government conduct for decades.

The overall definition of the public-private and government-citizen affiliation was to be reformulated. The government had to gradually disengage from assuming the role of the mass employer and the producer of goods and services to that of the regulator. In parallel, the private sector was instigated to engage in broader economic activities, while the country as a whole was hopping aboard the fast-moving train of globalization. The winds of change were overwhelming. Throughout the nineties, and under the supervision of the IMF and the World Bank, the government embarked on a sweeping economic reform program, which necessitated the rehabilitation of the regulatory framework and the amendment of the overall legislative structure. Jordan succeeded in sustaining an efficient macroeconomic management policy, which included the gradual reduction of high fiscal imbalances, and the implementation of an impressive structural reform agenda.

In tandem, the political transformation process commenced in 1989 when parliamentary elections were held after a suspension of over three decades. Held in times of heightened social unrest and feeble economic performance, the resumption of parliamentary life epitomized a new democratic transition, which began to manifest itself over the last decade through sweeping economic, political, administrative, and judicial reforms, with a solid commitment to protecting equality, human rights, and freedom. This landmark event heralded a marked departure from the old political practices, and a gradual relaxation of the ban on political activity and organization, and of control of the press. The process of democratization was gradually implemented allowing for the legalization of political parties and the lifting of martial law by 1992.

Building on the stabilization efforts, and political transformation of the 1990s, the government began accelerating the economic reform and democratic transition process in 1999. At the economic front, Jordan witnessed a dynamic privatization scheme, and a rapid integration into the world economy as evident by Jordan’s accession to the WTO, and the signing of both the Free Trade Area Agreement with the United States and the Partnership Agreement with the European Union. The country began to witness a rapid implementation of a series of stabilization and structural adjustment programs aimed at enhancing economic growth and reducing macroeconomic imbalances. The strategy focuses on export expansion through competitiveness, minimizing government intervention in the economy to give way for market forces to shape the future of Jordan, and integrating the private sector into the industrial policy-making framework and facilitating a private sector-led growth, since the private sector in Jordan has been identified as a main engine of socioeconomic growth. At the end of 1999, the first National Economic Forum ‘retreat’ was held, and later took place ever year, with over 150 representatives from the private and public sectors. Together, they were invited to devise a plan to promote sustainable social and economic development in Jordan, by building on past successful stabilization efforts. Subsequently, the Economic Consultative Council (ECC) was established to monitor the implementation of a set of recommendations encompassing economic liberalization and modernization, financial reforms, public administrative system reform, legislative amendments, and educational reform. Thereby, the private sector became engaged in the highest decision-making process and began taking a more proactive role in the overall reform process.

The strategy also focuses on ensuring that the legislative environment matches the requirements for global economic integration as part of the overall socioeconomic reform process, and responds to the needs of both the private sector and the civil society. This necessitated a sweeping legal reform, which encompassed amendments to a considerable number of critical laws including Labor, Income Tax, Company's, Public Debt, E-Transactions, Financial Leasing, Securities, Copyright, Patent, Telecommunications, Banking, Media, and others. In parallel, a judicial reform process was instigated, aimed at enhancing the efficiency of the court system and reducing legal transaction costs for citizens and businesses alike by upgrading the court system, strengthening its autonomy, training judges and lawyers, establishing an integrated information system network, and ensuring transparency.

Furthermore, the strategy focuses on investing in our people, by fostering excellence, creativity, innovation, competitiveness, productivity, global standards and entrepreneurial spirit. Jordan boasts impressive human development indicators given its meager resource-base, with a literacy rate reaching 89% in 2001. By regional standards, Jordan possesses a highly educated and skilled young population, which ultimately became its most valuable resource. Around 40% of Jordan’s population is below the age of 15. Hence, the contribution capacity of this young population is a crucial factor to national development, democracy, and the ability to compete in the global economy. The government realizes that developing our human resources is the cornerstone of sustainable development and the principal means of improving the welfare of citizens. Acknowledging the global shift from a resource-based into a knowledge-based economy, and the pressing need to incorporate enhanced levels of student learning capabilities, analytical skills, and computer literacy at every stage of the education process, the government has embarked on an ambitious program to maximize the efficiency of the educational system.

The strategy also concentrates on reforming the public management system, which is characterized by a high degree of centralization, and a limited decision-making power allocated to local governments (municipalities). The government adopted a systematic public administrative reform process to design a system of governance that will assure the efficient allocation of public resources, and attain fiscal justice. The reform process focuses mainly on decentralizing the decision-making process, and building local capacity by improving the quality of civil servants through training and education, in addition to introducing accountability mechanisms, enforcing budget constraints and sound financial procedures. Local governments have been encouraged to merge and cooperate in services delivery, to enhance their performance of basic public service functions such as water distribution, primary education, healthcare, transportation, etc., and most importantly, get involved in broader national objectives of poverty reduction and increasing the standard of living of Jordanians.

The impact of the stabilization and structural adjustment reform programs is becoming evident on the macroeconomic performance. For the first time in many years, the economy is expected to record a 5 percent growth rate in 2002 compared to a negative growth rate of 13.4 percent in 1989, despite the regional political upheaval witnessed last year. While liberalization efforts did culminate in macroeconomic achievements, there is still a lag in the progress of social development, which comprises a critical element for sustainable economic growth.

To further invigorate economic growth and social development, the government launched the Social and Economic Transformation Program (SETP) in November 2001, a timely initiative spanning over a period of three years (2002-2004). The SETP aims at achieving social and economic sustainable development, and improving the quality and standard of living for all Jordanians by better addressing their basic social needs such as better health care, rural development, and education, which features at the top of SETP’s objectives. While more than 84 percent of Jordanians still do not use the internet, educational reform was based on the premise of redefining literacy as the ability to speak English and use the internet effectively, which will ultimately enable and empower the citizen to have an equitable opportunity to participate and engage in the democratization and globalization process. As of 2002, English began being taught in all public schools as of first grade, and computer skills as of seventh grade.

Simultaneously, the SETP is designed to strengthen the resilience of the Jordanian economy to external shocks through advocating and accelerating the pace of reforms. The program’s goals are being achieved through (i) reinvigorating the private investment response by establishing and sustaining an enabling environment, accelerating government decisions, expediting the privatization program, and allowing for private investment in large infrastructure projects, (ii) developing human resources, (iii) improving the quality of basic government services, especially in health and social services (iv) enhancing productivity, promoting local community development and business outreach, through pro-poor growth programs, and (v) investing in fiscal, administrative, regulatory and judicial reforms.

On the political front, His Majesty King Abdullah II has vested extensive time and effort in identifying and addressing areas and issues of concern to the citizen that can be translated into effective political programs with actual solutions on the ground. To accelerate the democratization process, the Jordan First national campaign was launched under the directive of His Majesty King Abdullah II, to build an ambitious model of a liberal and democratic homeland, essential for the upcoming parliamentary elections in the spring of 2003. Jordan First is an attempt to define a new social accord between Jordanians, as it emphasizes the pre-eminence of Jordan’s interests above all other considerations, and reformulates the state-individual relationship. Moreover, it goes beyond being a mere concept, as it will be translated into an investment in the Jordanian people, in their education, training, health and well-being to prepare them for a future that promises prosperity, knowledge and accomplishment. Jordan First is a constructive appeal and an approach that seeks to open new doors for policies and programs in development, education, culture, communication and information. Moreover, Jordan First represents an invitation to civil society institutions and the private sector to raise their contribution in building a modern state through focusing on achieving economic, social, and political development, creating productive opportunities, fighting poverty and unemployment, and improving the standards of living of all citizens. In summary, Jordan First is a philosophy of governance. It is based on the premise of placing Jordan's national interest at the forefront of all considerations of civil society.

These far-reaching socio-economic reforms need to acquire democratic legitimacy. The Jordanian citizen however is beginning to conceptualize and accept these new economic policy settings, which conform to the evolving international trends, mainly because of the broad recognition that the liberal economic system will ultimately achieve the desired prosperity.

The progress towards democracy, pluralism and economic prosperity in Jordan is an irreversible process, and the government is committed to it. Consequently, great importance is attached to the upcoming parliamentary elections, which will be conducted under fair, transparent, and stable conditions to enable Jordanians to exercise their rights in selecting their representatives. To this end, the government enacted the new election law, which aims to secure wider participation, and guarantee better representation for all districts in Jordan, while ensuring that the election process will be transparent and free. The upcoming elections are envisioned to place Jordan first, through addressing national current and future agendas, presenting ideas on how to deal with the challenges Jordan faces in the rapidly changing world, and paying the utmost attention to the needs and aspirations of all Jordanians.

The accelerated efforts of economic and political reform, and the various socio-economic initiatives, will culminate in attaining sustainable development, and will transform Jordan into a modern model of a (livable) state that articulates the aspirations of a young civil society for democracy, opportunity and future promise.

Jordan First  II  Political & Socio-Economic  Development  II  
  Competitiveness of Jordan  II  Engines of Growth  II  Privatization  II  
Main Economic Indicators  II  Enhance Productivity Program (EPP)  II
Economic Consultative Council (ECC)