Jordan’s under-control epidemiological situation will serve the country economically recover from the COVID-19 Pandemic, while the losses would still take a long time to be addressed, according to Jordanian Experts & Officials.
After more than two months closure of almost all sectors due to the coronavirus, Jordan opened up most of the businesses and eased movement restrictions in early June to lessen the burdens.
However, challenges remain.
“We were negatively affected by the coronavirus, and several sectors were severely hit such as the tourism sector, but we have also introduced programs to help the private sector,” Jordan’s Prime Minister Omar Razzaz said during a press conference early June.
A recent report from Jordanian Central Bank shows that Jordan’s tourism revenue has dropped by 36.6% in the first four months of 2020, with only 784 million dinars (around 1,120 million U.S. dollars).
Bordering conflict-torn Syria and Iraq, as well as lacking the oil wealth, Jordan vows to revive the economic engine of the tourism industry, which contributes around 10% of its GDP and maintains more than 55,000 employees in the industry.
Under the new decisions, sales tax on the tourism sector was reduced from 16 percent to 8 percent, and the Jordanian government allocated 150 million dinars as financing programs to help the tourism establishments.
Besides, some of the significant challenges Jordan will still face in the next stage are negative economic growth and high-level unemployment rates, according to experts.
Between mid-March and mid-May 2020, around 40 percent of people in Jordan lost their businesses or jobs completely, according to a study by the Jordanian Phenix Centre for Economics and Informatics Studies.
“Unemployment rate is expected to exceed 20 percent in the second half of 2020…It will be a major problem accompanied by poverty increasing,” Mazen Marji, an economist and former expert at the Investment Promotion Commission, said.
Also, the International Monetary Fund (IMF) expected that Jordan’s Economy would contract by 3.7 percent in 2020.
To minimise the losses, the government launched a fund worth 700 million U.S. dollars to support small and medium-sized businesses with soft loans.
In parallel, the return of many Jordanians from the Gulf Countries and a decline in government revenues caused by a drop in domestic consumption, will force the government to resort to more borrowing.
Jordan has recently signed a new agreement with the IMF to borrow 400 million U.S. dollars.
“Jordanian state budget deficit will widen by an additional 1.4 billion U.S. dollars in 2020,” Jordan’s Minister of Finance Mohammad Al Ississ said in a recent interview.
Experts believe more measures are needed.
“There is an urgent demand to reduce the sales tax on all sectors to drive more consumption, which can also generate more revenues,” Marji said.
Jordanian Economic Columnist & Analyst Khaled Zubaidi said that China’s Belt & Road Initiative could support Jordan in economic recovery in the short term. He proposed broadening and accelerating infrastructure-related projects, as they will provide abundant Job Opportunities.
Amjad Issa, Political Analyst at the Jordan Press Foundation, said that Jordan should attract more patients from Arab Countries for Medical Tourism, where has always been a hub for such services.
“Besides, Jordan requires to draft a long-term economic plan for recovery and appeal for international support as it is still hosting more than 657,000 Syrian refugees registered with the United Nations,” Issa said.