Room to expand German-Jordanian economic relations

HM King-President of Germany
His Majesty King Abdullah is received by Federal President of Germany Frank-Walter Steinmeier upon arrival at the Bellevue Palace in Berlin. (Photo: Royal Court)
AMMAN — Sixty-three years of Jordanian-German relations are bound to be further bolstered by His Majesty King Abdullah’s visit to Berlin to discuss with German President Frank-Walter Steinmeier and German Chancellor Olaf Scholz cooperation in all fields, as well as the latest regional and international developments. اضافة اعلان

The volume of trade exchange between the two countries amounted to some JD535.7 million in 2020. It is a skewed balance, however; Jordan’s imports from Germany totaled JD522.9 million, while exports amounted to JD12.8 million, making the deficit in the trade balance JD510.1 million, according to Jordan Chamber of Commerce data.

Economic and investment specialist Wajdi Makhamreh told Jordan News that Jordan’s political and economic cooperation with Germany is significant. Germany is the second-largest supporter of Jordan after the US.

According to Minister of Planning and International Cooperation figures, Germany pledged 483 million euros to new development assistance to Jordan in 2021, with a focus on education, water, sanitation, and vocational training.

“Germany and Europe proved their commitment in supporting Jordan in various fields through Kreditanstalt für Wiederaufbau (KFW) bank and others, especially in infrastructure projects,” Makhamreh said.

Jordan’s imports from Germany outweigh its exports to it, he reiterated, adding that imports are “mainly of machinery, services, and cars”.

Economic analyst Mazen Irsheid thinks that cooperation in the energy sector should be enhanced, “especially since energy costs are high in Jordan and they will further increase in light of the Russian-Ukrainian crisis”.

Jordan has a 94 percent dependency rate on foreign energy imports. International circumstances are bound to increase the energy bills this year, and that will also increase the budget deficit, economists say.

“Jordan’s energy security is at risk nowadays,” Irsheid said, adding: “Germany has major capabilities and technologies in the renewable energy sector. With the EU trying to reduce its reliance on Russian fuel and gas, Germany is bound to further develop its technologies in the field.”

If cooperation in renewable energy is to grow and enable Jordan to be self-sufficient, German investors should be given incentives, such as exemptions from paying customs fees and taxes on their investments, said Irsheid.

According to Amman Chamber of Commerce data, the commodities most imported from Germany in 2021 were vehicles, mechanical parts, and accessories, worth JD196.1 million.

The highest exports to Germany in 2020 were various foodstuffs, worth JD4.7 million.

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