Jordan feeling the pinch as boom in oil neighbors' economies slows

A little after dawn, the Egyptians in their long white galabias start trickling toward the edge of Amman in hopes of day labor. But the jobs that have drawn more than 100,000 guest workers to thriving Jordan in the past few years are getting a bit harder to find.

The boom in this relatively resource-poor Arab state - a happy mix of outside help and shrewd management - is slowing. The main source of the slowdown was the main source of the boom: Jordan's oil-gushing neighbors in the Gulf, particularly Saudi Arabia and Iraq.

The Jordanians' talent for managing and planning survives. Even Jordan's ''slowdown'' is of an ilk that many developing countries must eye with envy: Real economic growth this year is still expected to reach about 6 percent.

Still, that's a significant fall from the annual 9 percent spurt of recent years - and it reflects major trims in state development spending, which is heavily dependent on outside financing.

The Jordanians are keenly aware that some tricky social problems could lie ahead: for example, the question of maintaining the nearly full employment achieved during the boom years as tens of thousands of skilled Jordanians left for lucrative employ in the Gulf, while Egyptians and other immigrants provided much of the manual work force at home.

King Hussein, in an official message to a reshuffled Cabinet last month, spoke of ''hard economic times affecting our region and our country'' and said a way must be found to combine economic ''responsibility'' with continued provision of key ''education, housing, health, and other'' benefits to the population.

On the ground, perhaps the most striking sign of the boom is made of beautiful tan Jordanian stone. In the past five years, villa after villa has gone up in Amman, pushing the boundaries of this hilly capital slowly outward despite soaring land prices, which could claim as much as $150,000 for a quarter-acre patch in some suburbs.

Most of the building is the work of Jordanians who sent money back home from their fat paychecks in the Gulf. Some of the houses - like one cluster of huge villas on the road from Amman down to the Jordan River Valley - were built for Jordanians working elsewhere, like America.

But the pace of building seems to have slowed. Nowadays, too, one finds relatively more construction on less ambitious multifamily apartment blocks.

Remittances from Jordanians abroad are still an enormous boost for the economy. In 1982, they notched the $1 billion mark, becoming Jordan's largest source of foreign exchange and helping the Jordanians offset a hefty, $2.5 billion foreign trade deficit. Jordan, arid and short on energy, has been running up an ever increasing bill on food and oil imports.

But the growth in remittances has been slowing - and a key hard-currency source, direct grants and soft loans from Gulf oil states, has now sharply contracted, along with world oil prices.

After Egypt's 1978 Camp David accord with the Israelis, the Gulf states agreed on a large-scale aid package to Jordan and other oil-less Arab opponents of the Egyptian move. Jordan's share amounted to roughly $1 billion a year. But last year, the Jordanians received only about $640 million of this sum. In 1984, the figure is expected to drop by a further $100 million. Compounding this problem is the drop-off in Iraqi purchases due to the Gulf war.

Some good news, however, is that Jordan's small industrial sector - notably, production of phosphates and exportable manufactured goods - has continued to expand. An oil find in Jordan's eastern desert region sparked a flurry of optimistic news media reports recently. But officials say privately that talk of significantly easing Jordan's oil-import tab so far seems at least extremely premature, and probably overoptimistic.

You've read  of  free articles. Subscribe to continue.
QR Code to Jordan feeling the pinch as boom in oil neighbors' economies slows
Read this article in
QR Code to Subscription page
Start your subscription today