Policy Research Reports
Accelerating the Progress of Jordan Towards the Sustainable Development Goals
No.
PRR 55
Publisher
ERF
Date
December, 2024
Summary
This report explores Jordan’s progress toward the Sustainable Development Goals (SDGs) in the context of current economic, social, and structural challenges and their projected course until 2030. Since the adoption of the SDGs in 2015, Jordan has faced significant constraints, including its limited natural resources, high debt burden, water scarcity, and external shocks such as the Syrian refugee crisis and the COVID-19 pandemic. These challenges have adversely affected the country’s ability to accelerate economic growth (SDG8), reduce poverty (SDG1), and advance equality (SDG10). Despite these obstacles, Jordan has demonstrated a strong commitment to the SDGs, implementing comprehensive reforms and development strategies, including the Vision 2014-2025 that was followed by the Economic Modernization Vision 2023–2033.
Jordan’s macroeconomic trajectory has been marred by the twin (budget and trade) deficit that has persisted for decades. This has been associated with a secular decline in GDP growth since the 1980s with the exception of a short-lived burst in early 1990s following the Gulf War, and a longer lasting higher rate of economic growth during the 2000s following the war in Iraq. Since 2010 per capita income has declined by almost one-quarter, partly because the increase in the resident population from the influx of Syrian refugees. Furthermore, Jordan’s high and increasing debt-to-GDP ratio—currently exceeding 110 percent —and rising debt service obligations have curtailed public investment in critical areas such as infrastructure, education, and health, limiting progress toward the SDGs.
Sectoral analyses reveal mixed outcomes in Jordan’s development journey. Progress has been observed in advancing gender equality (SDG5) through the removal of several institutional constraints, increased education attainment of females and greater access to employment opportunities, albeit from a low baseline. However, these gains are offset by declines in the quality of education (SDG4), which have restricted opportunities for social mobility and negatively affected both labor productivity and total factor productivity and by a lot. The labor market is characterized by high unemployment rates, including men and adults – a sign that unemployment is largely a structural macroeconomic phenomenon, not just an issue among youth and women.
The private sector remains anemic and unable to drive economic transformation and boost job creation despite efforts to improve employment prospects, including national employment strategies. Trade policies have undergone significant liberalization, with the country signing multiple free trade agreements and improving its ease of doing business. However, trade lacks diversification and is characterized by persistent trade deficit —standing at 24 percent of GDP regarding goods. Foreign direct investment (FDI) has also declined, reducing opportunities for private sector growth and innovation.
Social challenges are equally prominent, particularly in poverty reduction and inequality. Official and circumstantial estimates indicate that poverty rates have increased in recent years. Jordan’s National Aid Fund (NAF) has expanded its coverage to mitigate these effects, but there are limits in what it can do in the absence of decent employment creation and a reduction in unemployment. The Gini coefficient, a measure of income inequality, remains high – the second highest in the region after Morocco. A lack of up-to-date and reliable poverty data further complicates efforts to monitor progress and design effective policies, highlighting the need for improved statistical systems and monitoring mechanisms.
The environmental dimension of sustainable development also presents challenges. Jordan’s extreme water scarcity, exacerbated by climate change, impacts multiple SDGs, including clean water and sanitation (SDG6), food security (SDG2), and climate action (SDG13). The high debt and rising debt service costs have limited resources for investment in renewable energy and climate resilience. The legacy deficits in the electricity and water sectors, plus high and increasing pension outlays, present a formidable obstacle to financing the SDGs.
The report emphasizes that achieving the SDGs in Jordan requires a holistic and coordinated approach that aligns national priorities with global goals. Key to this process is macroeconomic stability, which can be achieved through sustainable fiscal policies, enhanced domestic revenue generation, and debt management strategies. Faster economic growth is essential for increasing public revenues, enabling investments in critical sectors, and reducing dependency on external aid. Equally important is the need to foster private sector development, which can drive job creation, innovation, and productivity gains. There should also be efforts to enhance governance and institutional effectiveness that would improve the implementation of development programs in a sustainable and equitable way.
The report also advocates for evidence-based policymaking and improved data systems to monitor progress and address information gaps in tracking progress toward the SDGs. As of today, the road to achieving the SDGs by 2030 remains challenging. Addressing systemic barriers, mobilizing adequate funding, and implementing bold reforms will be critical for overcoming these challenges. Critical among them are fiscal instability and mounting debt service obligations that choke private sector growth and crowd out financing for the SDGs.
Authors
Zafiris Tzannatos
Senior Fellow, Lebanese Center for Policy Studies...