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Export growth in 2021 does not mean much, say some experts

1. export-3343870_1280 (Pixabay)
Jordan’s industrial exports have grown by nearly JD900 million, more than 20 percent during 2021, compared to 2019, according to Amman Chamber of Industry head Fathi Al-Jaghbeer.(Photo: Pixabay)
AMMAN — Official data released by the Jordan Chamber of Industry shows the value of exports during 2021 reached about JD5.5 billion, a 20 percent increase over 2020.اضافة اعلان

During a dialogue on the export strategy for the years 2022-2023, organized in coordination with the Amman Chamber of Industry on Saturday, its head, Fathi Al-Jaghbeer, said that Jordan’s industrial exports have grown by nearly JD900 million, more than 20 percent during 2021, compared to 2019.

Jaghbeer said that this is to the credit of the Jordanian industry, which continued producing, while many other fields stopped during the COVID-19 pandemic.

Jaghbeer said that the Jordanian industry had proved its ability to work despite the difficult circumstances, adding that Jordan was able to continue exporting to China and the US.

"Before the pandemic, we used to manufacture 50,000 face masks, today we manufacture 6 million face masks, and we export them to all parts of the world," he said.

Jaghbeer emphasized that this reliance on the local product helped Jordan survive while other countries fell apart.

Economist Mazen Irsheid told Jordan News that despite the numbers that appear in official data, exports still constitute a third of Jordan's imports. 

"There is a rise in exports, indeed, but this slight increase should not make us forget the challenges and obstacles that exist in the Jordanian industry."

Irsheid stressed that the biggest obstacle is the high manufacturing costs, caused by the energy bill for factories, including for industrial fuel, car fuel, air, and sea freight fuel, which are all part of the manufacturing process and reduce its growth percentage significantly.

Irsheid said the government needs to seek to improve the state of Jordanian industries. One way to do this is to establish a free industrial zone on the Jordanian-Iraqi border, an issue that was discussed during visits by officials of the two countries over the past two years, but whose implementation is slow.

Irsheid said that such a project would support Jordanians industries and exports, as it would entail customs exemptions and tax advantages and would play a significant role in encouraging foreign investments. 

“Jordan had benefited greatly from Iraq throughout history. And there is another project now that has not been worked on yet, which is to extend oil pipelines from Basra through Jordan to Aqaba,” Irsheid said, adding that this project is still being an item of talks between the two countries, ten years one, but there is no actual implementation.

If implemented, however, "we will be able to get oil at preferential prices from Iraq and see a huge qualitative leap in the value of Jordan's exports", he said.

In a telephone interview with board member at the Amman Chamber of Industry Mousa Al-Saket, talking about the increase in the value of Jordanian exports, he said: "We do not look at the overall picture. Despite the rise in exports in 2021 by 18.3 percent, imports increased by 23 percent, which affected the balance of trade and led to a more significant deficit.”

He also says that the mentioned growth is slight, and comparing the GDP with the growth of exports, there has been no significant increase during the past ten years.

"In 2010 to 2022, exports ranged between JD4.7 billion and JD5.4 billion, so there is no significant growth," he said.

Saket also said that the high manufacturing and production costs are the reason Jordanian producers have less of an opportunity to compete with in the global market.

Industrialist Ihab Al-Shorafa said that the Jordanian industry had reached the stage where it is a sufficient resource for the economy, as it covers the domestic needs and is able to export to multiple global markets, due to “the quality of the Jordanian product”.

Shorafa also spoke of several challenges faced by industrialists, mainly the high manufacturing costs and the lack of government support, unlike in some neighboring countries where industrialists enjoy many exemptions and state support.

"Despite that, we always strive to improve the Jordanian industry by raising the level of products that are required all over the world," said Shorafa.

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