An increase in exports is always welcome news. Recent trade reports indicate that national exports have increased by 20.1 percent and imports increased by 24.2 percent during the first 11 months of 2021, compared with the same period of 2020. However, judging from the list of what Jordan exports and imports, there really is a need for diversifying the industrial and export scope of products.
Total exports (national exports and re-exports) reached JD5,997 million during the first 11 months of 2021, an increase of 18.3 percent compared to the same period in 2020. National exports were worth JD5,447 million during the first 11 months of 2021. They increased by 20.1 percent relative to those of the same period in 2020.
The increase in national exports was due to a rise in the value of exports of clothes by 13.9 percent, fertilizers by 97.1 percent, crude potash by 27 percent, crude phosphate by 44.6 percent, and non-organic chemical products by 9.1 percent. So, after COVID, the world was asking for more clothes and fertilizers — people want to dress and eat better after the closures, curfews, and the macabre spread of the virus and its aftermath.
Notably, there was a 1.5 percent decrease in the export value of Jordanian pharmaceutical products. One could see a falling trend for what was considered a leading industry as Jordanian pharmaceuticals continue to lose traditional markets in the region.
There are many reasons for this steady decline, yet an extensive albeit value-added-focused industrial policy may help reverse the trend.
The imports value reached JD13,822 million during the first 11 months of 2021, an increase of 24.2 percent over the imports of the same period in 2020. There was a 35 percent increase in the value of imports of crude oil and its products, vehicles, motorcycle and their parts by 26 percent, jewelry, and precious metals by 54 percent, machines, and machinery tools and parts by 18 percent, electrical appliances and their parts by 11 percent and grains by 18 percent.
Note how machinery and tools make a large chunk of Jordanian imports. Even the most casual observer would recommend that the industrial base be expanded and diversified, which is why analysts and pundits received the news of the $85 million Industrial Development Fund with great cheer.
The trade deficit in the first 11 months of 2021 increased to JD8,375 million, or to JD761 million per month. If Jordan wishes to decrease the trade deficit, and if the industry is to diversify and innovation is to set in, more funds are needed.
Jordan will need a plethora of funds beyond this fund, including an innovation fund, an export fund, a creative industries fund, and many others.
Proper cost-benefit studies show that government can recoup their expenditures via these funds; in months and in years, the impact on the economy is manifold. There is no time or reason to wait.
https://www.jordannews.jo/Section-36/Opinion/Funding-industry-to-help-boost-economy-13995
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