Jordan economy hit by IS takeover of Anbar

Jordan economy hit by IS takeover of Anbar
Feature: The loss of much of Iraq’s Anbar province to the Islamic State group has cost Jordan a major export route and is a significant blow to the Jordanian economy.
3 min read
The closure of Anbar will affect the entire Jordanian economy [AFP]

The fall of Iraq's Anbar province into the hands of the Islamic State group has meant Jordan has lost one of its main export routes through Iraq, and this has had a significant impact on the Jordanian economy.

Omar Abu Wishah, chairman of Jordan's Exporters Association, told al-Araby al-Jadeed: "The IS has enforced an economic siege on Jordan after taking over Anbar, dealing a severe blow to the Jordanian economy and export business in particular, along with the complete loss of Iraq as a market."

Last month, Jordan closed its borders with Syria after armed Syrian opposition forces took over the Nasib border crossing, bringing trade between the two countries to a complete halt.

Jordan losing its export markets

Jordan's export business could further contact during this year, with a possible decline of up to 50 percent.
-Omar Abu Wishah

According to Abu Wishah, due to the turmoil in Iraq and Syria, Jordan had lost 70 percent of its export markets in 11 countries, including Syria, Iraq, Lebanon, Turkey, Yemen, and Egypt, as well as Central Asian countries such as Turkmenistan and Azerbaijan, which Jordanian exports reached through the Syrian-Turkish route as they were not accessible by sea.

He added that Jordan's export business could fall by half this year.

Jordan's Department of Statistics said export revenues were $1.13bn in January and February, a fall of 13.2 percent compared to the same period last year.

Government data showed Jordanian exports to Iraq in 2014 generated $1.16bn in revenue, compared to $1.24bn in 2013, a decline of five percent, while imports from Iraq cost Jordan $6.2m in 2014, compared with $356.58m in 2013.

According to Mohammad al-Daoud, the chairman of the Jordanian Truckers' Syndicate, 2,500 of the 17,000 trucks operating in Jordan used to work the Iraq route, and the losses suffered by the sector due to the tensions in the region is estimated at more than $500m.

Economist Thabet al-Wer, the chairman of the Zarqa Chamber of Industry (the second largest in Jordan), told al-Araby: "The sharp decline of export revenues constitutes a grave loss for the Jordanian economy on so many levels, namely the increase of the trade deficit, which is already much more than the value of the exports.

"It also affects the private sector and the small and medium enterprises, which risk being out of the market due to their inability to afford more losses."

The sharp decline of export revenues constitutes a grave loss for the Jordanian economy on so many levels.
-Thabet al-Wer

He added that exports constituted more than 20 percent of Jordan's GDP, and that the loss of the main export markets, particularly in Syria, Iraq, and Eastern Europe, would negatively affect the Jordanian economy.

The knock-on effects

Wer said that fears are increasing with the rise of tensions in the region, particularly in Syria and Iraq, increasing the possibility of some industries going out of business, which would in turn lead to layoffs.

Wer added the need for relevant authorities to find alternative solutions for the Jordanian private sector and help it face the consequences of the export decline and the closure of the main crossing points, to avoid suffering more economic losses.

He called for helping export companies to find maritime export channels in cooperation with global navigation companies to transport commodities from Jordan's al-Aqaba port to other destinations and for them to charge reasonable prices for shipping under such exceptional circumstances.

This is an edited translation from our Arabic edition.