Jordan’s bid to join GCC will reinforce ties between Arab nations: Study

Jordan’s bid to join the Gulf Cooperation Council (GCC) will not only enhance trade and investment opportunities within the kingdom, but will also reinforce historical ties between Arab countries, a study by the Dubai Chamber of Commerce and Industry has said.

The study finds that the existing bilateral trade links and strong investment in Jordan by Gulf countries will continue to benefit Jordan’s economy, while increased tourism and the free flow of Jordan’s skilled and educated workforce will boost GCC economies.

According to the study, the GCC is one of Jordan’s major trading partners. During the last decade, bilateral trade between the GCC and Jordan has increased immensely.

Last year, bilateral trade between Jordan and the six oil-rich Gulf countries exceeded the $5-billion mark.

According to the Jordan Department of Statistics, the GCC accounted for 24.2 per cent of the country’s imports in 2010, while 18.4 per cent of its exports were destined for Gulf states.

Jordan’s imports from the GCC mainly comprised mineral fuels, oil, plastic articles, iron and steel and aluminium articles. On the other hand, the country’s exports to the GCC chiefly consisted of edible vegetables and fruits, pharmaceuticals, inorganic chemicals, precious metals, stones, machinery, electrical and electronic equipment and articles of iron and steel.

Among the GCC members, Saudi Arabia is the top trading partner with Jordan. Saudi Arabia, which supplies crude oil to Jordan, topped the list of exporters, followed by China and the US. In 2010, Jordan’s trade (exports and imports) with Saudi Arabia surpassed $3 billion, while total trade between the UAE and Jordan was reported to be over $700 million.

Jordan’s bilateral trade with Bahrain, Kuwait, Oman and Qatar was estimated at $306 million, $212 million, $60 million and $110 million, respectively, during the same period, according to the study.

Foreign direct investment (FDI) in Jordan, especially from Gulf countries, grew remarkably during the last decade.

According to the International Monetary Fund (IMF), GCC economies, particularly Saudi Arabia, have a major impact on Jordan’s economy, as they account for the highest share of Jordanian FDI, trade, remittance and tourism.

Figures by the Jordan Investment Board (JIB) have indicated that Saudi Arabia is among the top countries with the largest investment in Jordan. During the last three years, Saudi Arabia has invested over $4 billion on different projects in Jordan.

According to the UAE Ministry of Foreign Trade, UAE investment in Jordan is estimated to be in the range of $15 billion, which is expected to grow in the coming years.

Kuwaiti investment in the country increased to $8 billion in 2010, while Bahraini investment stood at $473 million the same year, the Dubai Chamber statement said.

The study says that if Jordan is to become a member of the GCC, with the eased visa policies, the number of visitors to both sides may also increase considerably. Jordan has already been a popular tourist destination for many Arab countries.

According to data from the Jordan Ministry of Tourism, between 2009 and 2010, some 1.65 million visitors from the six GCC states entered Jordan. Tourists from Saudi Arabia alone accounted for 16.2 per cent of total Jordan visitors last year.

Official figures indicate that the number of Gulf Arab tourists who visited Jordan last year made up 28.2 per cent of the total number of visitors and these numbers are forecast to increase in the coming years.