Jordan - Current economic position and prospects

RESTRICTED Report No. EMA-16a Inis report was Prepared Tor use witnin mhe Dunk unu nts uafffiiueorgam U.un1-. They do not accept responsibility for its accuracy or completene.ss-. -The report may nor be published nor may it be quotea as represeming tneir views. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION CURRENT ECONOMIC POSITION AND PROSPRCTS JORDAN December 18, 1969 Europe, Middle East and Nortn Africa Department CURRENCY EQUIVALENTS 1 Jordan Dinar 2.80 U.S. Dollars 1 U.S. Dollar 0 0.35T Jordan Dinar 1 Million Jordan Dinars 2,800,000 U.S. Dollars man-r ^" fl wuLmflrmC BASIC DATA SUMIMARY AND COCULUSIUNS RITRODUCTION II. RECENT ECONOMIC DEVOPMENT3S III. MAJOR SECTORS OF THE ECONOMY Agriculture Industry 7 Mining 'T Construction Transportation Tourism 9 Utilities 1U IV. THE PUBLIC SECTOR ii V. MONEY, PRICES AND BANKING 15 Money 15 Prices 16 Banking 17 VI. BALANCE OF PAYMENTS 17 VII. PROSPECTS 20 STATISTICAL APPENDIX MAP This report is based on the findings of an economic mission to Jordan in March/April 1969, consisting of Messrs. G.M. de Wit and K. Berg. The mission did not obtain information about the economic situation on the West Bank. Therefore, this report deals with the West Bank only to the extent it relates to the economy of the East Bank.  RARTC DATA West Bank East Bank Entire Jordan Area: 5,900 km- 91,100 km 97,000 km of which cnltiv+ated 2,50 r2 3 ,nn r2 rnn kM2 irrigated 70 km2 230 km2 300 km2 Population: (estimate mid 1969) 850,000 1,400,000 2,250,000 Rate of growth: about 3 percent per year Political Status: kingdom Gross National Product, 1966: JD 186 million Rate of growth, 1960-1966: 9.7 percent per year Per capita, 1966: JD 93 ($260) Gross Domestic Product at factor cost, 1966: JD 150 million of which: Agriculture 8% 13% 21% Industry and mining 4% 11% 15% Services (private sec.)22% 27% 49% Government 2% 13% 15% 36% 64% 100% Per cent of GDP at market prices: 1966 Average 1960-65 Gross investment 14.2 15.3 Gross savings - 1.7 - 1.9 Balance of payments current account deficit 24.0 24.2 Investment income nayments 0.2 0.2 Government domestic revenues 18.5 14.7 Resource gap as % of investment: 112 112 Money and credit Relationship to large monetary or customs area: Member of the Arab Common Market, consisting of Iraq, Jordan, Syria anA tha IAR /1 Baned on reoatIon ata from ITrA Iuidiha nt 1z0 000 remuIees not registered with UNRWA on the East Bank. 1268 Rate of increase 1- 1 4 Tn. nr - 0, .LUT.U.L LUCLt:y ZUFP V7.J *JF *. Time and savings deposits 21.5 2.1% p.a. VlommrcTAAURA"RAm private sector 42.0 2.7% p.a. Public sector operations (million JD) 1268 average Government domestic revenue 21.3 C.1 Government ordinary expenditure 56.1 35.9 Deficit 31.8 8.8 Government development expenditures 22.4 11.3 Total external assistance to public sector 47.4 18.8 External public debt Total debt (including undisbursed) $150 million (December 31, 1968) Total annual debt service (1969) 3.6 million Debt service ratio (1969) 3.2% (estimate) Balance of payments ($ million) 1968 1964-66 Exports 14.3 9.6 Imports -57.3 -57.5 Invisibles (net) - 1.3 18.9 Current account balance -44.4 -28.9 IMF psition ($ million) ril 1969 Dec. 1966 Quota 16.0 13.0 Drawings Share of total exports: 1268 _aL I Fruits and vegetables 42% 42% Phosphate 36% 34% Gross foreign exchange reserves ($ million; year end) 1268 1y64-6j 305 198 (or 16 months' (or 13 months' of 1968 imports) imports) Average External financial assistance ($ million) 1968 1964-1966 Total 167 89 Grants 153 86 Loans 14 13 Major donors Arab countries 137 27 UNRWA and other U.N. 15 16 U.S. 5 35 U.K. 1 6  SUMMARY AND CONCLUSIONS 4 Ptwha + ho Avsh_Turaei4 %ar of .Ttnime 107- Tnrdsin had made remarkable progress in its economic development. GNP had been growing ,^y i-^ma1+ in m.aw mvcir a4na% 10OO a 1 Thna ayrsvnui nn tnnk nlace in all sectors of the economy, and was particularly evident in industry, i.4i.4. agricul+ure and aser4.,es rele+A +o tns4m Aishanati1al for- eign assistance, both for consumption and investment, supported the de- velpmnent process. TO 19 +, ? 4 nA a UWA RAR 4W to refugees) amounted to JD 31.0 million, equivalent to 17 percent of MMT .MV vel. Lle.s tLe outblook Just tbem ha e +hk%a+ jrvAan %=. ~4 V L %ILe., ulz) ".LU.L W'J . J %I L ~ ' might become self-supporting with respect to consumption. If the Gov- tailing recurring expenditures had been continued, the ordinary budget MLgh, UVe Ueer Ualancd Uy the Mid-seVeUtie. n., ue same -- the external payments position was expected to improve, largely because of sharply increased earnings frOm tourism. For development, hver, Jordan was expected to continue to depend on foreign assistance to sup- plement the savings of the private sector. ii. The consequence of the 196 war has been to parase deeop- ment. Under present conditions the three most promising economic sec- tors (agriculture, industry and tourism) cannot be fully 1eveloped. In agriculture, hazardous working conditions in border areas (which are most susceptible to development) and the partial inaccessibility of the construction site of the Yarmouk high dam obstruct the execution of ir- rigation works. Continued skirmishes across the border also affect nor- mal: cultivation. Industry continues to feel the loss of the West Bank as a market for its products. Although much has been done to find new outlets abroad, these are unlikely to provide a basis for future growth at the pre-war pace. Tourist attractions, which are mainly located on the occupied West Bank, (Jerusalem, Bethlehem, Jericho) cannot at present be reached from the East, and tourist expenditure on the East Bank asso- ciated with West Bank tourism (airline earnings, side trips, stopovers) has ceased. iii. The 1967 war affected the economy in some other ways. Some 300,000 refugees fled from the West to the East Bank. Half of these had already refugee status before the war, and are registered with and sup- ported by UNRWA. About 150,000 are newly displaced Jordanians; they re- ceive assistance from the Government as do some of those displaced witnin the East Bank, as a result of continued flare-ups in border regions. The new influx of refugees places a burden on the country in that it will ne- cessitate additional investments in infrastructure, delay the institution of social services and exercise pressure on the labor market. The closure of the Suez Canal is causing additional transportation expense for exports (particularly phosphates) to and imports from the West. These have now to be routed through Beirut instead of Aqaba. Unsettled and sometimes perilous conditions also cause a hesitation on the part of foreign inves- tors to participate in development projects. iv. The adverse effects of the war have to some extent been offset on two accounts. First, at the Khartoum Summit Conference of 1967, Kuwait, - ii - Saudi Arabia and LibYa agreed to extend financial (grant) sunnort (nre- sently totalling JD 37.7 million per year) to Jordan until the conse- quences of the war are eliminated. This renresents a AibutantiA in- crease over the grant aid previously extended by the U.S. and U.K. (1966: .Jn 10n miiiinn) whinh dis-nntinid their buiivPt gn^v+_ Reond V- penditure by foreign armed forces stationed in the country and by the Palpqtine e-nmmandn movement (vhich rpnpivteu finant-al 2upport di-otly from abroad) stimulates the economy. No information about the economic imnnrt of thin in nvailablo V. in spi te of the sizeable increase in foreign budget support, the Government's financial position has deteriorated. The excess of or- A4nowwr armand +n.e rarer An,maa+4n aeven, an1 4 ,e4--A -P-- Tn < m4114nn (17 percent of the ordinary budget) in 1966 to JD 31.8 million (57 percent o +hL- OAnajr huAget / in" 19. 0j 4if i. bet ed ICUU-V 1uAchai +.,- JD 37.3 million in 1969. This reflects the combined effect of a drop in completely covered by the Arab financial assistance. No details of mili- 1ary expenditures are available but the reater part is presumsby spent on salaries and other local expenditure. vi. Lack of manpower statistics makes an assessment of the employ- meut situation imposible. L"uey. new refugesw caumps (accommotuIMat, ug 80,000 people) are situated far from employment centers, those new refu- gees ±Lv.ng OUS.LUC 4CUmp2 U.umpIoC W_nII estaui-Lshueu rsue"ens Iur wor. At the same time, employment opportunities in tourism, agriculture (Jordan VaLLey) anu inuuutry have diminished. This IS partly offset by empluy- ment opportunities created by increased Government spending in other sec- tors. IrTe armed forces have absored a large number of the labor force for which no other employment was available. As a result the employment problem has been kept within manageable limits. While on balance large segments of the pre-war East Bank population (with the exception of in- habitants of the Jordan Valley) may not be much worse off in terms of in- come than before June 1967, per capita GNP, which in 1966 stood at about $250, must have fallen as a result of the refugee infiux and reduced ac- tivity in some economic sectors; presently it may be of the order of $200 - $210. Had pre-war growth continued, per capita GHF would by now have ap- proached $300 per year. vii. The immediate impact of the war on the balance of payments has in a sense been mild. A drop in imports combined with an increase in ex- ports has largely offset the reduction in foreign exchange earnings re- sulting from the loss of the West Bank, and the increase in expenditure for refugee support. On balance the current account deficit for 1968 in- creased by JD 8.9 million or 25 percent of that in 1966. However, in terms of opportunities foregone, the loss is greater. On the basis of not unrealistic plan projections, the net war effect on the current ac- count is JD 20 million, in 1968, equivalent to almost 40 percent of pro- jected 1968 foreign exchange earnings. Moreover, before the war, both the East and the West Bank were deficit areas in their external payments. - iii - On the basis of rapidly rising tourists' spending, the West Bank was ex- nPted to wrnduin r murplus in tht Parly AvRntita 1 al Pnnufh to bal- ance imports of consumption goods for the whole of Jordan. Now that West Rank f^v4b4n ehAnga aeaning" A not ocena in .Tar"nna nrnan-t.n for a reduction of the current account deficit have disappeared. Imports of conslm+4tvn gooda nnnot agnJf4cant1- h.r 'he,wfhnwlled w +ihont 4nvAk4in ;car- cities and price rises with possible serious political, social and eco- nomic onsqnaes. Cuttig Aenlome mt 4i ,ndr.ab kle M r14a *awn, imports have been modest (less than JD 7.7 million per year or 23 percent of the curent .,ccon+ af4c4+ Auf4nc 1065 19 and harM for a large part been paid for by funds donated for this exclusive purpose. viii. As a result of the impossibility in the foreseeable future of on the basis of domestic resources, Jordan in its present form and at its present standard of "Liin aano entity.rd MVMUL Foreign assistance to support the present level of consumption is adequate- .y provideUYu uLys UMU ul states. W u.41 kU1.Lb U1U2WUM.L prouixIU ZU.LV1u, for the time being, prospects are that the present level of economic ac- tivity on the East Bank can be maintained or that growth may be resumed at a modest rate. ix. Prospects are enhanced by the Government's determined efforts to keep the development process going in spite of difficult conditions. By developing to the extent possible the country's infrastructure and the few remaining resources, further deterioration of the economic situa- tion may be prevented or at least slowed down. Development opportunities exist in education (remittances from educated Jordanians working abroad have long been a major source of income), transportation, power, water supply and some fields of the agricultural sector. Such investments may also serve as a basis for the implementation of development projects in tourism, agriculture and mining, which are kept in abeyance until working conditions improve. To finance development the Government will be entirely aependent on loan assistance supplemented by small amounts of technical grant aid. Several bilateral aid donors have agreed to provide loan as- sistance to finance part of the development program. About $100 million ($20 million per year) in borrowed funds could probably be usefully spent for development during 1970-1974 under present conditions. About $37 mil- lion will become available from disbursements on loans contracted prior to 1969. With new lending of $63 million, debt service (assuming harder average terms than Jordan is likely to contract) would not exceed $12.1 million or 12 percent of export earnings in 1974. However, since the country would be likely to find it difficult to raise for long even such amounts of debt service payments if budget support were withdrawn or sub- stantially reduced whilst other conditions remain unchanged, it would seem prudent for Jordan to accept only loans on concessionary terms, ex- cept possibly for enclave projects.  I. INTRODUCTION 1. The integrated econony of Jordan comprised prior to June 1967, both the aariculturally oriented area west of the Jordan River (West Bank) and the economically more diversified East Bank. The main characteris- tics of the areas are sigmarized below: West Bank East Bank Entire Jordan Area (k1 5Q 01OO 97-000 of which cultivated 2,500 3,500 6,000 Population: May 1967 990,000 1,130,000 2,120,000 of vhich -mfIuoan 1 I hI3000 2RO 000 793000 npmnrtiin ef MVDP (4 - 1044* Agriculture 7.6 12.9 20.5 Tndia7-r andr mAn4nnop 9.1 7 O 0 0 Construction 1.7 3.4 5.1 Transportation iO 5.5 10IL Trade 9.1 12.0 21.1 Ownrash4 .P Aof 4.dwe" n 1 I7. E Government 2.6 12.7 15.3 Services 24.8 T0 1 All Sectors 36.4 63.6 100.0 1/ Refugees registered with the United Nations Relief and Works Agency for 100-leslnenD@sm 4L- 1-he Nar EaMs+ ITINDWA he ac+tual numher of refugees is lower due to overregistration, the extent of which is not knuwu ut whidu may A.uura u omoc a aumA percent. The relatively low share of the West Bank in GDP reflects the presence at the time of large numbers of predominantly poor refugees and the Strung dependence on agriculture, where incomes are low. Tourism, however, was Ubcuming increasiugly LmpVrtant LQXn V ou IOU AMU& ULCIre Wne1C Wa, aZ it was centered around attractions in the Jerusalem/Bethlehem area; ex- penditure by tourists in all of Tordan anun-ed to about 7 percent of GV in 1966. Moreover, most remittances (1966: 65 percent) from Jordanians working abroad (equivalent to 6 percent of ur in 1966) were sent to Wes Bank residents, mostly refugees. 2. The six-day war of June 1967, and the ensuing occupation of the west Bank and unilateral annexation of Jerusalem has affected the economy in a number of ways. First, normal supply and marketing patterns were disrupted. The West Bank as a market for East Bank products was lost, which in particular affected industry. Exports to and imports from Europe and some other countries could no longer be channelled through Aqaba be- cause of the closure of the Sues Canal and had to be rerouted at great expense through Beirut. The West Bank, however, continued to supply the East Bank as usual with fruits and vegetables. Secondly, holy places in - 2 - the West Bank could no longer be reached through East Jordan. As a re- sult, foreign tourist expenditures no longer accrued to Jordan and asso- ciated tourist activity on the East Bank (air transportation, side trips, etc.) dwindled. Thirdly, the hostilities brought about massive displace- ments of both UNRWA registered refugees and established residents. There are three categories of newly displaced persons on the East Bank: a) Refugees registered with UNRWA who fled to East Jordan during and shortly after the war. Their number according to UNRWA registration figures amounts to about 170,000, of which an estimated 100,000 were actual West Bank ration recipients 1/ and the remainder other categories of UNRWA refu- gees, false or duplicate registrations, refugees residing on the East Bank but registered on the West Bank, and the like. b) About 150,000 formerly established residents of the West Bank, who fled to the East Bank at the time of the 1967 war. They are not registered with UNRWA and receive assistance for account of the Government of Jordan. c) An undetermined number of persons (may be 30,000- 50,000), who have been displaced within the East Bank. This concerns mostly people who fled the border areas with Israel as a result of continued hostilities. Fourth. imortant development projects had to be discontinued either be- cause of dangerous working conditions or loss of access to the project area. Intermittent fighting across the Jordan River also continues to disrupt production in the country's main agricultural area, the Jordan Valley 3L A few nonseaueneas of the conflict have aided the economv. Arab oil states have been extending grant aid to Jordan after the war amounting to n 17-7 million ,Pr vpar- the U-S. and U1K. on the other hand have withdrawn their budget support of about JD 10.5 million per year. Ex- -ndt,+-es b- foreign taond tat.in in the e-onintry and the Palestine commando movement have also to some extent stimulated economic activity. 4. Social services are not generally developed. Medical care for low 4no-egm-ups is- 14-4ted TSIsua"ce against labor ccide nts, i- ability or unemployment does not exist except in a few cases. Provisions 1/ Ration recipients are Palestine refugees or their descendants who re ce ive food , fuetl, 9Clothing an-d Often she.lt=1 fr-om UIN11"I. - 3 - for old age or for the support of dependents in case of death are general- ly not made. Education, though much better than other social services, needs further improvement. A few private non-profit institutions for fan- ily planning operate among refugees; the Government does not sponsor any activity in this field. II. RECENT ECONOMIC DEVELOPMENTS 5. Before June 1967 GNP had been rising rapidly (average 1959- 1966: 9.4 percent per year). Growth took place in all sectors of the economy. The Government has been the main driving force in economic de- velopment. With foreign assistance it greatly extended infrastructure. The private sector made good use of the opportunities offered, partic- ularly in industry, where production increased by 16 percent annually durini 1959-1966. Although the private sector generated modest savings (about 8 percent of GNP), national savings had been negative until 1963 because of the hikh level of Government consumtion in relation to domes- tic revenues. However, during 1964 and 1965, as a combined result of the Government's effort to increase domestic revenue while curtailing ordinary expenditure and of good harvests, GNP rose faster than consump- tive exnenditures, and for the first time in Jordan's history low but positive national savings (3 percent of GNP) were realized. Although in 1Q66. follnwina a bad year in acriculture. national savings were again slightly negative, trends were favorable. Until early 1967 prospects vre for a nntinupd Imnrovement in the Government's savinas Derformance with the possibility of balancing by the mid-seventies the ordinary budg- At withnut fnrpian assIstance The boLlannP ^f natvmentR nosition was ex- pected to improve simultaneously, mainly as a result of a sharp increase in earnings from touridm, hut cntinued dPendn,- -xn fnrPiAn asaistance to finance development was envisaged. 6. The immediate effect of the 1967 war was a sharp reduction in the level of economic activity a a runlt of the lon of the West Bank market and a widespread decline in spending in Jordan and neighboring Arab antr+w4. A M.namb,V. , +0ww,+4A.%a h aaM +n ak yl h lrn f pm h I nv- ment, which extended financial assistance in the form of loans or equity new4ama4n Pa wann n ameawan + aG vonm n+ aba&-red a%n A t%Ynah program of labor intensive public works. Depressed conditions in their _+-wnm 4''w A4A "^ lna+ 1nn Mtnr 4 iia+w4a PnAw arTwet mfe%mArnt .. a em M _ _ &5 -_ n I _ long. M.s.arv- - W - - - -- - in areas which had been cut off from the West by the closure of the Suez Cansl" f 4 A D-eicmm A lma L4ah.A no nA +hn 4deman -- pk u.aaaaa- -w ernment expenditures and was reinforced by the demand of foreign troops, Uu& commanduav movement, anu aew rA-We4ug% e. J %O. LW I C u uCb l u ' 5 pre-war months) the National Accounts indicate a 10 percent higher out- pu on the Eas& Dan as compareA InKth 196 U41 th4mray beatoo fa- PuU% E theUt ArZ eo %UyA WAMLUJ L7%ow* nu"aw vunawyv_ vorable representation, it is probably true that during 1968 GDP had re- ga.Lned LLs pre_T- nACu7 1-r1s avno n inres xuA O-P pop,,yI.+4-- of aout. 20.~ percent,UI per1 ICapi.L. "V=L (hi, W.L96L 6 moue o2 p of about 20 percent, per capita GNP (which in 1966 amounted to $260 per -'4 - year) must have decreased considerably and may presently be of the order of $200 - $210 per year in the East Bank. T. Private investment came to almost a complete standstill shortly after the war but picked up again with the revival of economic activity. Investment in real estate has recovered as it is considered a good pro- tection against the consequences of war. Lending activity by the Indus- trial Development Bank would seem to indicate that investment in tour- istic and industrial enterprises on the East Bank in 1968 was moderately lower than in 1966. Private investments in East Bank agriculture have been substantially reduced since the war, primarily as a result of con- ditions in the Jordan Valley. Public investment continued throuahout 1967 and 1968 at approximately its pre-war level in spite of the fact that some Drime development mrolects had to be at least temnorarilv abandoned. The rem&rkable roilpne- which the economy has ahnn after the disrupting events of June 1967 has been largely induced by sharply in- creased r,nvarnment nutl ivy -.rhi%h were made na ih 'viv the anintani extended by the Arab oil states (see para. 38). All of the increase in Covernment snading has heen fnr nurrpnt nurnno. Government dinavingn- as a result, were of the order of JD 40 million in 1968 as compared with .TD 67 millo4n in 1046 Pvrvate avinf whi&h durino 106T-10A fi11r- tuated around JD 13.0 million, have probably not increased. Thus, Jordan has fallen back to the -ition %where the ntinn as a whole rAiter_ con- siderable dissavings. 9. Lack of manpower statistics preclude an assessment of the em- oyman+ t4+11aton. PrIor o Tme 1047 the AnthoArI d4 not ansiAder unemployment to be a major problem. The 1967 war has affected the employ- man+ si+tua4n aAnwealy 4n +h+ 4+ -aAnnnA ammi a,fn+ an.f+nn4+4 e 4n agriculture (particularly in the Jordan Valley), and services related to +nm ourism A4 ena4Jsc ni,+4an a sarrfhal Atalaena,p+ no4as+a haa al an eliminated a number of jobs. Employment in industry at best has not in- nan A4- .1,. .n+n4 +4-- +Ua 4-f.tl ,. a @nPe en a.A +ka ,,+u. el 4m,,ano in population has swollen the labor force on the East Bank. Though new ment centers, other refugees (living with friends or relatives) compete .WLdn Uftvieu resUents uLu emp LVYJu. VI L.Lne other nLuL"%U LUA'C6cU Government spending in all sectors has substantially increased employment, especiaaly in the armed forces. 'Moreover, the commando movement provides income (up to JD 20 per month) to a number of otherwise unemployed. On balance, unemployment among the pre-june 196T population may be somewhat but not much higher than before the war. Wages for unskilled labor amount to Du U.5UU per day or the legal minimum of JED 12 per month. - 5 - III. MAJOR SECTORS OF THE ECONOMY Agriculture 10. About one third of the labor force is engaged in aariculture, which contributes 21 percent to GNP (average 1959/66). Only some 6 per- cent of the country is under cultivation., distributed over the East and West Bank as follows: West Bank East Bank Entire Jordan Total cultivated land 250,000 ha 350,000 ha 600,000 ha of whi&h* irrianti 7-000 ha pq000 ha io000 hs Lacrk of rokinfstl in the mAiror lmi+nftinn in Ptnina the mili-AvAtAdi atrian- On the East Bank, extensive areas with rainfall averaging between 250 - 330I mm nor vaor who"a a w^r+thwhiwhIle 'heant cron can only be I' h nin^A in years of above average rainfall, are cultivated. There are 94,000 farms, MoStly family owneA arm V ia e i ganally aell. n th hx a .T n"Aan Valley, the standard farm size has been set at 3 ha but where no reallo- CatA%n ^-P ao" kna +.nl.a -lo^n 4w.4-a+-A 1+. n- ^f+a," amallow Ar +h East Bank about two-thirds of the farms (largely devoted to extensive riPA afaed eal sndan4o namp4 lane +han 00 hankac output in terms of value, which is approximately proportionate to the area k"%L ~ .. L V MU= -LCU4%A OVP L.UL. C * j. F"%' L,L L %I=u. LUUD~ L,-Ly W.L ..L %".l .0 1. P1 %, rus, grapes, figs, olives) and vegetables (particularly tomatoes). The maIu cropns on te East Bank are wue1bmunLetert Cruiv nuu ve--'% u- are cultivated in the East Jordan Valley. The West Bank supplied the East BaUn wLi auitonal Iruits Unu vegetables. in spite of the occupation this trade continues. Livestock (1966: 1,100,000 sheep, 800,000 goats and '8,rn cattle) iNs raised mostly in the East Bank. Shbep and goat are usually kept by nomads. Grazing land is poor and the flocks encroach on forest land and ormg on cu.vaUeU lanus ater narvest. 12. Agricultural output increased by 9 percent per year between 1960-61 and 1965-66 (both periods include a good and a bad crop year). The increase was almost entirely absorbed by domestic consumption. Even so, imports of foodstuffs increased by 6 percent per year. The main im- port item is wheat and flour. There are also deficiencies in meat, milk, poultry and vegetable oils. Exports have increased somewhat in absolute value but are still at a low level. In 19) and 1966 (the last year for which comprehensive data are available) the supply situation was as fol- lows: -6- Average 1 op - 1900 Production JD 30.9 million Exports JD 4.1 million i) 20".0 million Imports J 11 million Consumption JD 43.9 million 13. Recorded food imports dropped from JD 18.8 million in 1966 to JD 14.5 million and JD 12.7 million in 1967 and 1968 respectively. In addition to the elimination of West Bank imports, this change reflects the combined effect of an improvement in rainfall over 1966 on the one hand and a drop in agricultural output of border areas as a result of in- cidents of the Jordan Valley on the other. On balance, it would seem that the East Bank has accounted for the bulk of food imports. 14. The development possibilities for agriculture would be consider- ably enhanced if peace in the area could be restored. The further develop- ment of the Jordan Valley (where 12,000 ha out of 44,000 ha, which are thought to be suitable for irrigation, are already brought under irriga- tion) is hampered since the construction of the Mukeibeh Dam has come to a standstill following Israeli occupation of the right bank of the Yarmouk River. Water storage project (mostly for irrigation) on the Zerqa River (the second largest stream discharging into the Jordan River after the Yarmouk) is presently being studied; if feasible this would make 70 million cubic meters of water available for irrigation of land in the Zerqa and Jordan valleys. The continued hostilities in the adjacent area, however, might prove an obstacle to construction. Skirmishes across the Jordan may also impede the actual construction of the Mujib and Southern Ghors irrigation project. Studies of various alternative projects, providing for irrigation of 1,500 - 4,500 ha at a cost of JD 2.2 - 9.6 million, are being undertaken. Apart from these two major projects, possibilities for the development of water resources are limited. Some side - wadis (catch- ment areas discharging into the Jordan River) can be independently devel- oped. There are several groundwater irrigation projects, most of them at an experimental stage. Further development of groundwater resources will add to the area of cultivable land but is unlikely to become a major fac- tor in extending the agricultural sector. Substantial development possi- bilities exist in imDrovina yields and cultivation practices (fallowing; pest, disease and weed control; rotation; use of fertilizer and improved qeeds)_ USAID and UNDP is Drovidina assistance in these fields. 15 Vir international institutions. five bilateral aid agencies and at least six Government offices are involved in agricultural development. Coordination hetwen them conuld in snme cass be imoroved. Long and medium-term credit for agriculture is provided by the Agricultural Credit nization is responsible, is insufficiently available. 16. It is unlikely that Jordan could in the near future become self-sufficient in food products. The food import requirements of the East Bank may further increase if agricultural development and normal cultivation of border areas continues to be impeded. Industry 17. Industrial production (Tables 4 and 8) has been growing faster than total GNP and its share increased from 5 percent in 1959 to 8 percent in 1966. Manufacturing is largely confined to those products in which Jordanian firms have some advantage with respect to transportation (cement, steel), the provision of raw materials (petroleum, leather, agricultural products) or some form of protection (cigarettes, beer). Although estab- lished to supply the domestic market, some firms have built up a relative- ly large export trade (cigarettes, car batteries). The 1967 war cut off the West Bank market causing grave difficulties for many industrial firms, and the Government has extended financial assistance in the form of loans or equity participation. Some industries. forced by the loss of part of their domestic markets, have been quick to take advantage of the disrup- tion of established supply Datterns elsewhere in the Arab world. Exports (particularly of cement and refinery products) have increased after the war. Nevertheless. industrial exnorts exelusive of re-exnorts and nhos- phates are still quite modest and did not exceed JD 2 million or about 15 percent of total exnorts in 1968- ImportA of industrial products (Pxnent food products and military equipment) amounted to over JD 21 million in 1968. 18. The unnettled nonditAna in Iiha aea Enmhav Industral develop- ment if only because of their detrimental effect on foreign participation. The Government in promting a gass fActory (hee+sa ancnine, a ceramics factory and a chemical plant based on phosphates. All of these are still in the mve-fMaZih414+.V +unA s+ae A -e-+ -4A Pan4h414+v study for the chemical plant will be conducted with assistance from West Germany. No mainr private intinsetial ven+veae newnvs A hu+, Iud- ing from the disbursement figures of the Industrial Development Bank 1/, investment for m~n '* adexniOn in existing entexpxises Seer. to continue at a good pace. Mining 19. Phosphate mines exist at Ruseifa and Hassa. No other minerals a-e - resent- b-4- -14td D-zo-c--Io anU exports I" ave Incrase ra- idly (Tables 8 and 10) and have continued to rise after the war in spite calcination plant at Ruseifa and for improved mechanization to enable underground mining at H"assa. rinancing to the amount of $3.61 million is . Visbursements 1966 (entire Jordan': jD 35,43( Disbursements 1968 (East Bank only): JD 261,021 - 8 - being negotiated with the United Kingdom. Considerable phosphate depos- its, not presently being exploited, are known to exist elsewhere in the country. 20. The Government has contracted with a Yugoslav firm for oil ex- ploration. Under the agreement the firm assumes all the exploration cost if no oil is found in return for an option to participate in the exploi- tation if any oil is discovered. Previous efforts to find oil, which were far from comprehensive. have not been successful. 21. Mananese, copper, lead, and some other metals have been dis- covered in border areas with Israel. Because of continued hostilities it has not been nossible to assess whether they can be commercially ex- ploited. The existence of oil shales (with a high sulfur content) has been demonstrated. A survey is beina conducted to reveal the presence, if any, of radio active materials. The brines of the Dead Sea contain -nntnqh hit nlAn% fnr ita extraction by Jordan have not been executed for technical and financial reasons as well as because of dangerous working nnditinnR in the area. 22. No e^myrh#anJvA tatiztin on -nnstrnuction are available. Na- tional accounts data (Table 4), based on a variety of estimation methods, indicate a sharp rise in activity after 19611, Istraelv reflAting increased public investments. Construction for account of the Government (including ns.h 4+mam no 44ite ea+ in.ka mv% wa ahn anriy a+ty th He1iiat railway, Aqaba port, etc.) is likely to remain at a high level for some- time to come Pesnt+1 4+ poablir + +- ar f thvA of *r%+al expenditure (1966: JD 9.3 million) on construction. Private building has C b TV U _ m411l o n, +41 +he yOe7 unl wh 4+ fell considerably. Subsequently private building activity has recovered struction firms are small, and larger contracts are usually awarded to lureign cr.Lr1ators. 23. rioruan a ronu 5sum culists 0.1 tuVUvou _)u, n m u. 1LLuuwCVb ALu other roads. The Government has embarked on a highway improvement pro- gram, which includes the recon truction of the aman-Zerqa highway, the construction of highway connecting Jordan to a newly completed road along Trans Arabian oil pipeline to the Gulf area as vell as the improvement of the Amman-Ramtha highway and the Ma'an-Run Junction highway, which is part of the desert road to Aqaba. Financing for this program has not yet been arranged. Other road projects for which financing has been secured and which are mostly in an advanced stage of implementation, include the Safi-Aqaba highway (construction of which has been stopped because of its proximity to the border); construction of the North Shuna road; construc- tion of the Ma'an Mudawara road (to be finished by the end of 1969); and -9- the improvement of the Aqaba-Run Junction highway section. The Mafraq- Baghdad highway, which is substandard, will probably need improvement once the other road projects are well under way. 24. A narrow gauge railway (part of the Hedjaz railway to Mecca, administered by a religious trust) operates between Damascus, Syria and Ras en Naqib (see Map). There, goods (mostly phosphates) on their way to Aqaba must be transshipped into trucks at great expense. The rehabilita- tion of the entire Hedjaz railway is contemplated but progress so far has been slow. In the meantime the Government plans to reinforce the section between Hassa and Ma'an, which will carry heavy freight traffic, and ex- tend it to Hitiya. With a $15 million loan from Germany, a new spur from Hitiya to Aqaba (not part of the Hedjaz railway) will be built. Construc- tion is scheduled to start early 1970 and to be completed in 1973. The railway is expected to become the major link between Aqaba and both the phosphate mines and the Amman/Irbid area. 2S. Mainr investments in the nort of Anaba have recpntlv been com- pleted with U.K. and German assistance; no new investments are envisaged fnr the near futuvre A new ninrt serving Amman will A,vntu1lv he needed; tentative plans exist for new facilities near Madaba towards the mnid nAOnQ- Npirtiatinnr with the TK. for thP r-nnczt.ni-t.inn and fi- nancing of a new airport at Aqaba (serving planned tourist facilities) ae suhatani+4al-iv .gcmnle+ed. 9r, Tn 4-,. 100<n1044< 1. - I ,--P ..-4.4+s ~ .w a r countries increased by 36 percent per year. No information as to the pur- s Jn Of +he V_C4.+s 4s . P-h m-bOyMlw +As +trwavelae 4n1Aed +tour ists, businessmen, family visitors as well as pilgrims to Saudi Arabia. come predominantly for touristic purposes, increased by 19 percent per an'- A- 1- T- 1QOK +by s+ayed for an avea.. -P ah-,+ h days. Foreign exchange earnings from travel almost matched the growth in bAa. ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 6 A.~ L.*YAU~ tJ AO.f.Z0, LA.±1 7JJ.7wj t hes amounte VU,A~~ _,s J cent and 29 percent per year respectively. 27. Until early 1967 it was expected that foreign exchange earnings uL=L u .ulism w0u"'ud coutiuue WtU iOCLUL8 u Se SnalP34rpy. n gUiU.Lsug Lu" IJ.m- portance of tourism, the Government had, before the 1967 war, been taking steps to uiversi-y its tourist attractions, wuicn largely ceutereu on tne holy places in the Jerusalem/Bethlehem area, by developing historic and natural attractions on the East Bank. 28. The 1967 war and the resulting loss of access through East Jordan to the holy places, severely affected tourism. The number of visitors from Arab and Asian countries held up remarkably well, reflect- ing the generally non-tourist character of their visit. The number of western visitors, however, fell considerably and tourist activity on the - 10 - East Bank all but ceased. Moreover, foreign exchange earnings from tour- ism to the holy Dlaces no longer accrued to Jordan. Foreign exchange earnings due to foreign travel dropped from JD 11.3 million in 1966 to JD 4.6 million in 1968. The decline in tourism is probably greater than these figures would suggest since increased travel to Jordan for business purposes in Dart compensated for the lost tourist traffic. Trends in the number of visitors are summarized below: 1960 1966 1968 Arab and Asian countries 2/ 68,624 441,812 354,972 Europe, North America and Othher Co-1in rie- 3.075 174.972 20,455 Tal 11_6oQ 616.784 375,427 2/ Includes Turkey. Source: Ministry of Tourism. O9 By A--vl4In" attrntIon on the E"t Bank (Petra. Jerash. Azraqo Wadi Rum), the Government hopes to revive tourism. A project exists for delpng the Coas-+1 ar nw tha fliilf nf Anthn rently im-nuired from Saudi Arabia. The cost of the first stage (including a jet airport to be built with UO V. assi--e-1 s ea+im.ad at JD hL million The nntinued tension in the area may prove an obstacle to tourist development and may ~J %. ' -1 46L ~J.. -...P 4-V.- A-.,h. -- - + - kr rn imAa-r. -nea-amf%il t-rnri tions, no vigorous revival of international tourism may be expected until access to the holy places thirugh une ast ank bee estore* Utilities 30. Power is presently generated by a large number of small diesel plants. Prior to June 1967, the Government intended to construct a 2 x 44 M.W. thermal plant to be incorporateU Later With the VICmoU10y1o1a5" ities in a national system, for which a 132 K.V. transmission line was planned. The war required a reappraisal of the stumtion in the light of the present inaccessibility of the West Bank. Studies to that end are being undertaken with U.S. assistance. Future investments io generating and transportation facilities may amount to about JD 10 million. Improve- ments in city and village distribution networks are also required. 31. The provision of potable water to cities and villages seems generally adequate. However, distribution within villages is mostly in- sufficient. The Government plans to extend to municipal water and power distribution systems, in an effort to curb present migration to the larger cities (where sufficient employment opportunities are lacking) by improv- ing living conditions in rural areas. Improvements presently envisaged in - 11 - village power distribution networks may cost iD 2 - MiLL.LoLUn 11. AmLuprove- ments in rural water distribution networks will be cheaper, and costs should not exceed JD 1 - 2 million. 32. The Government plans also to improve the sewerage systems of five of the larger cities in order to avoid pollution of underground water resources, on which Jordan is highly dependent. The project cost may ten- tatively be estimated to be of the order of JD 3 - 4 million. 33. The internal telephone system is to be modernized under a $6.3 million loan from the U.S. Government. The Government also intends to improve communications with other countries, which at the moment are poor. Plans exist for the construction of a satellite earth station (costing JD 1.1 million) and micro-wave links to Beirut and Baghdad. Financing of the projects has not yet been arranged. IV. THE PUBLIC SECTOR Public Finance 34. The financial position of the Government has always been weak and substantial foreign assistance has been required to balance its budget. Foreign assistance has consisted of budget (grant) support, economic and technical aid. and development loans. After covering a large part of or- dinary expenditure, budget support has usually been sufficient to meet nart of exnenditure on develooment. In the four fiscal years preceding the 1967 war (1963/64 - 1966), budget support averaged JD 12.9 million per year of which JD 10.2 million was used to cover the short fall be- tween domestic revenue (JD 24.8 million) and ordinary expenditure (JD 35.0 illinn) and )JD P7 million was available for development purposes. Foreign development assistance during the same period amounted to JD 2.1 million ner year in grants and JD 3.5 million Per year 2/ in loans, tied to specific development projects. 35. In spite of the dependence on foreign assistance, trends lead- ing t QP1f-nff4 tiPntv with resnect to ordinary nublic expenditure had become discernible prior to the 1967 war. Domestic revenues, in partic- in cnstoms and ercise flutie as wvl ng (though at a much lower level) income taxes, had been increasing faster than ordinary expenditure, as a wesul+ of theG .vement's efforts to irarve tax collections while cur- tailing defense expenditure (Table 12). Under pre-war conditions, ordi- nary expendiures A Aomesfc r"-aw e ina ht have b-pn in bAlance towards 1/ Amman power distribution also needs improvement at an estimated e m en4 Tn f Ku a - 2/ -Luclutesa''r nli,f budgt su - -4.J.L - - - 1. o- from the Gv ernment of Kuwait. - 12 - the mid-qPvPntiPn. Before 1Q67 donnr rnuntries (in nwrticular tht- IS. and the U.K.) were adapting their aid programs to the changing conditions by gradually renina th4ir hudat unnrt while incransinv the amount of loan assistance. 36. The 1967 war has severely affected the Government's financial -sit+n. and ha reoved for the foreseeable fttnre any prospect of Self- sufficiency in public finance. Domestic revenue dropped as a result of loss of access to the West Bank, the decrease in rmand raiuli+4ng in lower imports and duties) and the institution of tax relief measures. ,ram hrnf +ma .nAn,+4 n 4. nnmmo4can ta.4 +h +ha O%g l+arnl I ~ 1 +,e +hen many had initially expected, the loss compared with the level that would over, the promising growth trends have been replaced by at best prospects amounted to JD 24.3 million against a yearly level of JD 30.8 million in TV T 1 -r41I "A :~ I-lu e..4. e,4're- 6-i.e Ayo. rr Auy a ov L Mia--Lon rise ovex L7uu so vuL5ub %* ucs LIU war, yearly increases of JD 3 - 4 million were realized (Table 14). 37. Ordinary expenditure have gone up by 50 percent after the war. expenditures have in fact increased more than the budget indicates. The development budget for 1967 and 1968 contains expenditure of a non-du=evel- opment nature of probably at least JD 10 million. This consists of fi- nancial assistance to existing enterprises, un-prouduetive puuc relief programs, etc. True development expenditures during 1967 and 1968 about attained their 1966 level. The overall resut is a 54 percent increase in total expenditure, from a yearly level of JD 51.0 million in 1966 to j (0. 57 111 on in 19060 (Table 13). 38. With a rise in expenditures and a fall in domestic revenues, the need for foreign assistance has substantially increased. At the Arab Summit Conference, held in Khartoum in August 1967, Kuwait, Saudi Arabia and Libya decided on budgetary support amounting to JD 37.7 million 1/ per year. However, the U.S. and U.K. discontinued their budgetary sup- port, which they had been extending to Jordan for many years (1966: JD 8.8 million and JD 1.7 million per year respectively). in addition Jordan received considerable emergency assistance after the war from a great variety of sources. The Arab financial assistance is to be extended until the consequences of the war are eliminated. A summary of the Government's recent financial position is given below: 1/ The amount of assistance was defined as 40 million pounds sterling. Devaluation of the pound sterling, for which the donors only partly compensated, reduced the amount to the equivalent of JD 37.7 million. - 13 - JD Million Budge t 1966 1967 1968 1uge Domestic revenue 30.8 25.5 24.3 25.3 Budget support 10.5 16.9 4o.o 37.7 Emergency aid - 21.1 1.3 - Other foreign aid 5.7 6.9 6.0 12.2 Total revenue 47.1 70.4 71.7 75.3 Ordinary expenditure 37.5 44.7 56.1 63.0 Development expenditure 13.5 23.5 22.4 26.1 Total expenditure 51.0 68.2 78.5 89.2 Deficit or Surnlus -3.q 9. -8 -130 1/ Yearlv basis. RO. The cnsequences of the war Irith raanaet fn doxvlonment. financ- ing are limited. Before the war, part of the budget support from the U.S. nnd UK %zaq availnha for d vnanmn+ WmnA-rvr th4 antvee of finanna was rapidly being eliminated as a result of the U.S. and U.K. policy of reducing their budget support and av+ aw-A4 nrr d anne t Annsbn+ nnwnnea Thus, if the war had not occurred, Jordan would by now have been dependent n4ma41v on 'ae for 94nancin Aavlrrlomen+. Man -4+h nho A avnonA4+a and revenue patterns, the country finds itself also dependent on loan as- sistance to obtain development finann. Tn 1047 Aomne+4 tva%nnuioa hniAcr et support and emergency aid exceeded ordinary expenditure by JD 18.8 million, of wh4h at least TD 1 m4ll4n on weaA +n 4neCn r.al4ef pM- jects contained in the development budget. In 1968, the ordinary surplus +f jD 0.' -n4'114on trean4..ir'spn on.~ re*i4aP.p,... --4- _ VP 4 a.anu,a4 2 2 ~~ L.tfl ~ 4A.4~..JO_1Y h 'L AJ.L.L uWItaO WsJ VIA '4 JJfflL S budget. For 1969 domestic revenues plus budget support is budgeted to ba 4]r-+ anns4un4ac 4-a na a A4 ary exAped"'tr.... wb--ve . P-e^A- +- v- g L4±±.Lt.LC"U V LJruS VAw4umaJ CApVJ%U&.LLL WuC. IL AU A&4ne %AQ cover relief works contained in the development budget come from, the ?laonrnan+. ..411 1..na +-a mal,. an Tao.. O....A.. 4. OJ---- A..l a...,a. ml. . zmnu wl"" have +0 reAJ on loan fpund to finance uVAyWV U 1969 budget probably accurately reflects the emerging financial position f t GOvrentU , wUIchn W.131. se -tne paUteru o pu]ic iLnnuce un"til CA- ternal factors change the situation. 40. The increasing dependence on loan assistance to finance develop- ment is refiectea in the Government's indebtedness. At the end of 1963, disbursed and outstanding external debt amounted to JD 18.1 million; by December 31, 1960 this had increased to jD 33.1 million, representing - 1h - total debt contracted (including undisbursed) of JD 53.7 million. Serv- (1964: JD 0.2 million) or less than 2 percent of export earnings. This However, repayments on some loans have started in 1969 and many other will Polo soon. As a-eutse-c netcntracted as of Decenber31 .LU_L_UW soonUHe z aM res-L MLVYLUC UU "CUL, UU t, 6U IB luCemUer 31_' 1968 (including undisbursed) will rise to JD 1.3 million in 1969 and JD 2.5 milio 1H 190; in 1972 it will reach 51 3.2 million after whIch it will taper off temporarily. 41. Before the 1967 war, the budget had alternately shown small sur- pluses or deficits. The 1967 oudget, supported by large emergency aid, showed a small surplus. In 1968, the budget showed a deficit of JD 6.8 million, higher than in any previous years. The deficits were covered by drawing on accumulated surpluses of previous years, embodied in Government deposits in the Central Bank. The deficit for l9b9 is budgeted at JD 13.9 million, representing relief programs contained in the development budget, as well as Government spending on development projects to the extent not covered by foreign assistance. The actual deficit may turn out smaller than budgeted if only because of the difficulty of finding funds to sup- port deficits of this size. Comprehensive data on the Government's cash position are not available. Published statistics indicate Government de- posits of JD 23.1 million in January 1969. These include deposits of the Unified Arab Command and other Armed Forces, which are provided by foreign sources for spending by these organizations and are not available for spend- ing by the civil Government. Unofficial data placed civil Government de- posits in June 1966 at JD 8.1 million, out of a total of JD 17.7 million. On the basis of budget results since then, deposits of the civil Government at the end of 1968 may have been about JD 2 million. Therefore, cash re- serves should be insufficient to cover any sizeable deficit. 42. The Government might be able to place an additional 1/ amount of treasury bonds sufficient to cover part of this year's deficit with the commercial banks and possibly the Central Bank. It has reportedly introduced amendments to the public debt law to that effect. However, this will not provide a basis for sustaining a large deficit for a pro- longed period and therefore, a period of tightening public finance would seem to be ahead. In particular, it may prove difficult for the Govern- ment to provide the local cost component of all development projects that become ready for implementation. The only substantial untapped source of public funds are the foreign exchange reserves, but their util- ization for financing budget deficits may not be opportune at present (see paragraph 57). 1/ The Government has issued in January 1969 JD 3.6 million in 3 months traourv bonds- whinh it intendn to keen revo1vine. - 15 - Planning 43. Until June 1967, the Government had been implementing the 1964- 1970 development plan. The plan was well conceived. Even though a num- ber of targets were somewhat too ambitious, the path to be followed was clearly indicated. Projects in the plan were generally well chosen. The rate of project implementation was slower than planned, mainly Decause project preparation required more time than anticipated. During 1964- 1966 actual development expenditure amounted to about JD 34 million a- gainst JD 44 million planned. However, the rate of increase in GNP sur- passed the plan provision. 44. The 1967 war largely invalidated the plan. Projects in many cases are in areas no longer accessible to the Government or where con- tinued hostilities prevent implementation. This concerns in particular the Mukeibeh dam on the Yarmouk River, the development of the Jordan Valley, and tourist developments on the West Bank. Some projects had to be reconsidered because the area to be served by them had been reduced. To maintain momentum the Government has drawn up a list of projects that can be implemented under present conditions. Some of the smaller, labor intensive projects (extension of the East Ghor canal, building of rural roads, etc.) have been included in an emergency public works program. With assistance from U.S., U.K., Germany and Kuwait, a large number of feasibility studies have been initiated. A development plan for educa- tion is being drawn up under the IBRD/UNESCO Cooperative Program. These should provide for continuity in the development effort after the com- pletion of the projects which are at present being executed or are like- ly to be started soon (roads. railway. telecommunications. phosphate min- ing, development groundwater resources). V. MDNEY, PRICES AND BANKING Money 45. Until June 1967, money supply had been increasing somewhat fast- e' than MP (14 percent as compared with 10 nercent ner annum). The more rapid monetary growth was in part if not entirely caused by the inflow of eXternal romuvea which translatd intn a relativelv hirh level of Gov- ernment spending. The Authorities have followed conservative monetary unalir. anti a-n+mh o%f the mnetarv ectnr had been monsistent with the --__S-_-1---Lh-_----- availability of resources. There was some suggestion that the Govern- ment's- moneawy polle-es vre vewly anutius and that the foreign ex- change reserves in excess of the 100 percent currency cover might have be naA +oo f4nann Arnennmen+ supply has been rising at an annual rate of about 25 percent per year. a slight decline. A summary table of monetary developments is given below: - 16 - vec. Growth May Growth Feb. 1960 rate 1967 rate 1969 (iD min) Dec.1960/ (JD min) May 1967/ (JD min) May 1967 Feb. 1969 Currency in circulation 15.6 13.1 34.4 45.0 65.9 Demand deposits 10.5 15.7 26.7 - 4.4 24.7 Total money supply 26.1 14.2 61.1 25.2 90.6 47. The growth in currency circulation reflects the combined ef- fects of the increase in Government spending and a widespread desire to hoard as a hedge against further emergencies. The Government derived most of the funds for its enlarged spending program from the Central Bank in return for foreign exchange it had obtained through foreign as- sistance 1/. As a result of hoarding a large amount of Jordanian cur- rency has accumulated in the hands of the public and because it is not spent (or at least not spent at the pre-war rate) imports have remained relatively low. At the same time this has resulted in a build up of large foreign exchange reserves, amounting to about JD 100 million early 1969. 48. The Government is concerned about the monetary situation. It fears that the accumulated liquidities of the private sector might sud- denly be put back in active circulation which could exercise great pres- sure on the balance of payments and prices, in particular if the velocity of circulation rose above pre-war levels (about 5 times per year on the average). An assessment of the situation is hampered by lack of infor- mation. The Jordan dinar circulates as legal tender beside the Israeli pound on the West Bank, but no estimates of the amount of Joidanian cur- rency in circulation there is available. The West Bank may well be a major area for hoarding. If so, the imports resulting from increased spending within the West Bank would initially draw on Israeli foreign exchange reserves, since imports for the area are presently channelled through Israel. The Israeli monetary authorities are likely to dispose of Jordan dinars, which they receive as a result of expenditure on import- ed goods and Israeli products and ultimately the import component of West Bank transactions in dinars will draw on Jordan's foreign exchange re- serves. As it safefuard against monetary disruntion, the Government wishes to maintain a high level of foreign exchange reserves. An evaluation of Jordanla paprve nonition i. irivpn in naragranh 56- Prices In spite of the absence of data for past years, price rises seem to have expeditur eC - 1- a-d 198 e s pc t ven ±/ UL~~L1 ~ IUL.~ ULWIiV~ L%J.L UU M"Ut~ VU FCLUCUt J.L UVVqLLMUAC"t. expenditure in 1967 and 1968 respectively. - 17 - year. A major exception is housing; rents and real estate values, in particular in the larger cities, have increased substantially. There have been no apparent price increases as a result of the 1967 var. Price stability is explained by the country's liberal import policy, the abun- dance of labor and the Government's conservative monetary policies. Banking 50. The banking system comprises the Central Bank established in 1964, eight commercial banks and four specialized lending agencies, name- ly the Industrial Development Bank, the Agricultural Credit Corporation, the Municipal and Village Loan Fund and the Housing Agency. The commer- cial banks are by far the greatest source of credit; as of December 31, 1968, JD 42.0 million was outstanding. They mostly finance trade and to a lesser extent industry and construction. The Industrial Development Bank (IDB) lends for industry and tourism (outstanding JD 1.2 million at the end of 1968). The Agricultural Credit Corporation (ACC) extends long term 1/ loans for a great variety of agricultural purposes (outstanding as of December 31, 1968 JD 6.4 million). The Municipal and Village Loan Fund provides capital funds for investment to municinalities (outstandina at the end of 1968 about JD 2.5 million). The Housing Agency provides loans for residential buildini (outstandina at the end of 1968 about JD 0.8 million). 51. The Government has assisted the commercial banks to overcome the conseauences of the war. The CentrAl BAnk limited withrsAvaln from deposits and the Government deposited JD 0.7 million to strengthen the commerial banks' linidity. Dpnitnn with Went Rank hrnches were al- loved to withdraw part of their account at East Bank headquarters, for which th Anv 7nmn ha n-mmnaaA hhanVa for loe invoA West Bank branches of banks, meanwhile, have remained closed and in spite of the anecal arangments+ mention -1 1, +he Il . A . 1k of d s i . ll blocked. Moreover, amortization and interest on credits extended to West Bank rePien+ -nnot he on^lar-e A Ph4a annn both the commercIal and the specialized banks. As of December 31, 1968 ACC already had JD 899 000 clue but ,mnon-1 1anahla . Ta4wma on the West Ran 4m'1A4m -'4mn4me? equivalent to 11 percent of its loan portfolio. Similar data are not arailable for cooMer-iDan4. oks VI. BALANCE OF PAYMENTS OAJU.A IIUMO %,Lb. 1L "C... =JY4L.LUL.1=U M LC-K t, C L.L. U1 U I needs to import a wide range of consumer goods as well as capital equip- ~ WJIJ b~~L .LL ~ rnL-LUCUL 1,U JI±LOPIMUCe, LrU.LLb~ %UU VW8e64L.LC5e 1/ The Jordan Cooperative Organization is responsible for providing hort term credt. It often finds itself unable to provide credit because of lack of funds. - 18 - grew at about the same rate as GNP (10 percent per year). Invisibles in part compensated the =eUj'L.CAL in.. ImeChnC" se1U.~ 4CraA Jordanians working abroad, rapidly growing tourist earnings and to a lesser extent investment income aund pipeliue %duscounted for m-o receipts from services. Payments for services increased more slowly and on balance the surplus of im en-Vd± au1±b i%y U ... m o u 5 1961-1966 (Table 9). During the same period, the trade deficit rose by JD 21.3 million so tha the overaIl current accouut position (ecl u,ing transfer payments) substantially deteriorated. Nevertheless, before the war the outlook was for an improvement in the extermiel payments posiuion. There was considerable potential for increasing tourism and foreign ex- change earnings from this source plus a continued gradual rise in expors might have been sufficient to provide for Jordan's imports of consumption goods in the early seventies. However, dependence on foreign assistance for development imports was expected to continue. 53. The 1967 war affected the balance of payments in a number of ways. Tourism was concentrated on the West Bank and tourist expenditure there no longer accrued to Jordan. Some 65 percent of remittances from Jordanians working abroad were sent to residents in the West Bank; even though some of them fled to the East Bank in June 1967, the amount of remittances available to Jordan has dropped by roughly JD 7.5 million or 75 percent of their 1966 level. Moreover, the Government has had to pro- vide assistance to displaced persons from both the West and the East Bank, who did not have refugee status prior to the war. The sharply increased outlays registered under "Government" (Table 9) largely reflect payments to UNRWA, the Government's executive agents in this. The total loss from these causes in 1968 as compared with 1966 is of the order of JD 23 mil- lion equivalent to 55 percent of 1966 foreign exchange earnings. On the other hand imports fell from JD 67.3 million in 1966 to JD 54.2 million in 1967. The subsequent rise to JD 57.3 million in 1968 is largely due to a rise in defense imports; excluding these, imports would have been of the order of JD 44 million. On balance, the current account deficit increased by JD 8.9 million in 1968 as compared with 1966. However, in comparison with what could have been had pre-war conditions prevailed, the balance of payments effect of the war is much greater. The plan tar- get of a 1968 current account deficit of JD 24.0 million was not unreal- istic under the pre-war conditions, which would place the net war effect on the current account at around JD 20.0 million in 1968, equivalent to almost 40 percent of projected 1968 foreign exchange earnings. 54. Under present conditions, the greatest loss is to Jordan's potential tn imnrove its external payments position. No data on the ex- ternal payments of the East and West Bank separately are available but the m-sitin in the joint balance of Dayments of each of them must roughly have been as follows in 1966: - 19 - JD Million West East Total Bank Rank Jordan imnrtn: fnods - >4 - 43 - 67 services - 3 - - 10 tntal - 27 -50 - 77 e.-ot , good 3 7_ services 20 11 31 total 231 141 but estimates based on the contribution of the two areas to fM'D -Am &U...----n d ofp act 4t4+4ae in ce tin areas. Thus, even though the West Bank was probably a deficit area as far as xAUnal paymUnts were UUccrneU, Ait Was so U a much "Lease -dgre 'hn the East Bank. Moreover, with an increase in tourism earnings, the West Bank should by now have provided a surplus. There is hardly any posi- bility in the foreseeable future of reducing the East Bank deficit to more manageable levels. Savings on imporTs, nich woulu agniU anY reduce the deficit do not seem possible, without directly reducing the standard of living of large segments of the population or Without afVtA- ing development. Defense imports have been relatively low; if all un- classified items (SITC code 9 in Table 11) consisted of military equip- ment, defense imports would have averaged JD T.2 million per year during 1965-1968 equivalent to 12 percent of total imports or 30 percent of the current account deficit. Moreover, these imports are to a large extent pald for by funcLs speciaLly donated by foreign sources for tuis yurAIIM. 55. The current account deficit has largely been finanued by grant aid, mostly in the form of budget support to the Government. Other ca4- ital inflow has been low as compared with grant aid and has not exceeeud JD 7.0 million per year. Development loans to the Government however, have been showing a rising trend. In view of the increased depenence on loans to finance development, public capital inflow (other than budget support) may continue at between jD 5 - 10 million per year in the nea future. Loan commitments have been obtained from Germany (JD 6.6 million) for a rail connection to Aqaba port; from the U.K. (av 4.3 million) for Aqaba airport, power and some other projects; and from the U.S. ($ 6.3 million) for modernization of the telephone network. Disbursements on these three loans may amount to around JD 3.5 million per year during the next three to four years. - 20 - 56. Because of the extent of foreign assistance, Jordan has accu- mulated substantial foreign exchange reserves. Since late 1968, net foreism assets have been fluctuating around JD 100 million or about 14 months' of imports of goods and services. Most reserves are administer- ed by the Central Bank (Table 16). Not all foreign exchange reserves are freely available. The rapid increase after the 1967 war partly re- fleets the inflow of foreisn aid extended and earmarked for defense im- ports. These will eventually be spent for this purpose. The Government maintains that a high level of foreisn exchanie reserve is necessary as a precaution against the consequences of hoarding. There has indeed been considerable hoardina (see naragraph 47). It may therefore be desirable to refrain from policy changes in this matter until the monetary situa- tin hana nnrmal1i7ed. Moreover, the Government maintains that a large foreign exchange reserves are required to assure continuity in the econ- ony in emergency nitu.tionn. These a onside-rations and the country's dependence on the availability of grant assistance provide some justi- .P+4o % nm the o%vn +no m t's rpRfbrv nnl iev nA I nng as aresent condi- ., __ -~ - -------- -- - r 0 - ___a co--di tions continue. VTT_ PRAPRPR 57. Prospects for Jordan are dependent on political developments 4t +' wh41b annnn hm menvid4fte^ w4ith aym, Ap nf ouranv t t"U vfl W' as . U Ch c-xr-.--Z --------- __V-t - - - - - - -- the moment. Present circumstances frustrate development of the three most, prmsn eco. nomic... sectors:~.a agr- .iultur,w t--wism in indtisry Agriculture cannot be fully developed because hostilities in border areas %W"ere.... %& W .~+h a ~n .v4a. a~Ah@~00 ly hamper both cultivation and construction of irrigation works. Tourism . ...a... .441 .nr AP 4+a ww4w w4r nu~" in+41 +h a.v't%4nr%a .1.s UtLL.elDyLJV two regain any of is. previous .-e-1- -.- -5--_- -- on the West Bank are again accessible from the East. Industry continues - .t'. > ..1 -L T .-- 4& U.4 - 4memDbU* -w-+ +l,h- 4+ han Af%a uml LIO L= A UIC .LWOO UA "Llo e.SV5~ &5i v en..s . =.- in finding substitute outlets abroad, it may be doubted whether this wo.l consenitutn a bais rwwl-L calt he pea rc uwars ace. number of refugees will remain in East Jordan. Their increased number places a renewed burden on the counUtry. Not oUly ha te GWVernMent to give direct assistance to newly displaced Jordanians, but the increase in the number of inhabitants will inevitably ental extension of infra- structure, reduce resources available to meet the general need of the country for social services, and add to the difficulties of the labor market. 59. Current account transactions of the balance of payments for the East Bank will continue to show a considerable deficit. it must be considered almost impossible under present conditions to eliminate or significantly reduce the deficit. Jordan imports most of its require- ments of consumer goods, and far reaching restrictions there would cause price rises and scarcities. Development imports are largely financed by - 21l - foreign aid. Defense imports are largely financed by funds donated by loreign sources specficl~ly 101- 41J.13 PJLJ2YkU~. ou. ~ ~~~~~~ Gonlmneeuumcauvv,vvernment spnuu d wxo un UU k .Lk1U_L?1kA: UVW.Ai.Lt; muL-kV Lt"Y , UUVC±1LA LLJ.Llq, N WIALL 11 LIC6 been the main driving force of the economy since the 1967 war) will pro- balbly have to be rnaintained at as high as ixVe%l U as osil. Dt cannot realistically be hoped that the budget could be balanced without foreign assistance. Any substantial reduction in the deficit would require a considerable cut in defense expenditure, requiring a contraction in the number of military personnel. The employment situation is already strain- ed and the economy cannot provide work to those who are presently engaged in the armed forces. Moreover, a reduction in Government spending would affect directly and indirectly activity in other sectors of the economy causing the employment situation to deteriorate further. 61. As a result of all this, Jordan under present conditions can- not be expected to become a self-supporting economic entity at its pre- sent standard of living. Apart from the fact that social and political constraints will not allow it, the adjustment of consumption to match domestic resources would entail a reduction in per capita income which might tentatively be estimated at around 50 percent 1/ or perhaps even more. An improvement in physical working conditions in border areas with Israel would not change this basic situation, although it would alleviate the problem somewhat. Substantial foreign assistance to sup- port consumption will be required as long as present conditions (in particular with respect to the tourist attractions on the West Bank) prevail. Presently this is adequately provided by the Arab oil states in the form of budget support. 62. Even though most directly productive projects in agriculture, mining and tourism cannot be executed because of the unsettled condi- tions, there exist development opportunities in infrastructure, which can provide some growth stimulus to the economy and which can form the basis for the execution of directly productive projects, once peace in the area has been restored. Education provides promising development prospects; remittances from educated Jordanians working elsewhere in the Arab World has long been a major source of income. Other invest- ment possibilities exist in transportation (roads, railways and at a later stage airport facilities), telecommunications, power, water sup- ply and some segments of the agricultural sector. 1/ Total foreign assistance in 1963 amounted to JD 47.4 million. As- suming an average multiplier of 1.5 (most probably an underestima- tion) this accounts for JD 70 million of expenditures. Total ex- penditures on the East Bank should presently not exceed JD 150 million. - 22 - 63. For development Jordan will be dependent on loan assistance. The Government onuld probably usefully snend for development $20 mil- lion per year in borrowed funds during 1970-1974. With undisbursed cmmi+men+s amountina tn 4'i7 million at the and of 1Q68 (Table 1)- and disbursements of $20 million in 1969, the Government would have to con- t-ract loans enabling dahursements of about 1fA million durina the fol- lowing five years to support this rate of spending. Debt service pay- ments, even asming the horrowina of auch Amninta on harder average terms than Jordan is likely to contract, should not exceed $12.1 mil- lion or 12 percent of export earnings in 107h (aea Tahla 17) - Thp capability to service present and future debt obligations is completely a- - -c nnjh41+v e%- uinfi d grant eld in adquiao mnnint. dependentC on theaalbItyoutId at i .nntaont to Jordan. Should budget support be withdrawn or substantially reduced wilst ot.her factors rema4n unchanged ToAan would h likely n find it difficult to meet for long any substantial amount of debt service. STATISTICAL APPENDIX Table E)+c tel -a"-K14c A-I,+ o,,+s4+.an-Un on external public debt 2 Labor force by sector of employment ll' .YULl VGDX and UN byV seto"u6r 01 UrIgin T.,4 Ape nd,uZre on UMr at marxet prices omposition o gross Uomestic capital formation 6 Smmary of agricultural income and expenditure Production of principal industrial and agricultural products 8 Balance of payments 9 Composition of exports 10 Composition of imports 11 Summary of Government revenue and expenditure 12 Government expenditure 13 Government revenue 14 Government shareholdings in enterprises 15 Banking and monetary statistics 16 Estimated debt service and debt service ratios, 1970-1974 17  Table 1 External Public Debt /1 outstanding as of December 31, 1968 (thousands of dollars) Debt Outstanding Source December 31, 1968 Disbursed Including only undisbursed TOTAL EXTERNAL PUBLIC DEBT 93,222 150,492 Loans from international oreanizations IDA 8,131 10,015 Loans from governments 85,091 140,77 Denmark b5 1, 6U Germany 9,109 28,389 Kuwait 15,40 15. sh Kuwait Fund for Arab Economic Development 9,189 18,984 Saudi Arabia 8,400 14,000 United Kingdom 35,321 46,721 United States 7,567 15,343 /1 Debt with an original or extended maturity of one year or more, and repayable in foreign currency. Source: Statistical Services Division; Economics Department,  Table 2 Estimated Future Service Payments on External Public Debt Outstanding, Including Undisbursed, as of December 31, 1968 (thousands of U.S. dollars) Page 1 Debt outstanding beginning of period, including anymanUe oua V " Year undisbursed Amortization Interest Total Total external public debt 1969 13,192 2,439 1,183 3,b22 1970 136,052 5,260 1,859 7,119 1971 130,792 5,429 .1,00 7,309 1972 125,363 7,197 1,878 9,075 1973 118,166 6,289 1,646 7,935 197h 111,877 6,694 1,660 8,356 1975 105,183 6,814 1,640 8,454 1976 98,369 6,810 1,551 8,361 1977 91,559 8,096 1,502 9,598 1978 83,464 6,394 1,478 7,872 1979 77,070 6,394 1,349 7,743 1980 70,676 5,536 1,221 6,757 1981 65,140 6,090 1,149 7,239 1982 59,050 5,827 1,078 6,905 1983 53,222 3,867 7h3 6,610 Note: Includes service on all debt listed in Table 1 prepared May 22, 1969, with the exception of the following, for which repayment terms are not available: Uoanius Kingd $1,vernMent United Kingdom $12,000,000 Table 2 (continued (t,ousands of U.S. dolla'"s) Debt outstanding beginning of period, including .raymntn.s ahuring e frLo Year undisbursed _onortization Interest To"1 Loans from international organizations - IDA 1969 10,015 62 62 1970 10,015 1971 10,015 8 72 79 1972 10,008 15 75 90 1973 9,993 15 75 1974 9,978 70 75 16 1975 9,907 70 74 1976 9,837 70 74 l14 1977 9,767 85 73 158 1978 9,682 100 72 173 1979 9,582 100 72 172 1980 9,h82 100 71 171 1981 9,381 115 70 185 1982 9,266 130 69 199 1983 9,36 130 68 198 Loans from goverrnents - Total 1969 128,477 2,439 1,120 3,560 1970 126,037 5,260 1,792 7.052 1971 120,777 5,å22 1 808 7,230 1972 119.39 7.182 1,803 8,985 1973 1081.74 6;274 1,571 7,845 197o4 ·1m . o 6,62å 1.-85 8,209 1975 95,276 6,746 1,566 8,310 1976 88,532 6,7h0 1,477 8,?17 1.977 81,792 8,o0 1,h29 9,hL0 1978 73,782 6,297 1979 67,488 6,294 :,27 1980 61,194 5,1436 1,10 1981 55,758 5,975 1,079 7,053 929783 5,,00 6.706 1983 44,086 3,737 71,2 Table 2 (continued) (thousands of U.S. dollars) Page 3 Debt outstanding beginning of period, including Payments during period Year undisbursed Amortization Interest Total Denmark 1969 1,600 1970 1,600 - 1971 1,600 17 - 107 1972 l,93 107 - 107 1973 1,387 107 - 107 1974 1,280 107 - 107 1975 1,173 107 - 107 1976 1,067 107 - - 107 1977 960 107 - 107 1978 853 107 - 107 1979 747 107 - 107 1980 64o 107 - 107 1981 533 107 - 107 1982 427 107 - 107 1983 320 107 - 107 Germany 1969 28,389 257 300 557 1970 282132 312 392 703 1971 27,821 367 477 844 1972 27.:hW 367 562 929 1973 27,088 367 647 1,013 197h 26,721 610 731 1.341 1975 26,111 610 783 1,392 1976 25.501 610 764 1.37 1977 26891 1,698 738 2,435 1978 2L193 1.698 687 2,385 1979 21,96 1,698 636 2,334 1980 19o798 1,Q8 585 2,283 1981 18,100 1,698 534 2,232 1982 162h03 1, 41 483 1,9t 1983 14,962 1,441 LLO (thusands ofL U.S. dollars) Page 4 Debt outstanding beginning of period, including Paymente during period Year undisbursed Amortization Interest Total United Kingdom 1969 34,721 - - 1970 34,721 - - 1971 34,721 - - 1972 34,721 - - - 1973 34,721 1,332 - 1,332 1974 33,389 1,439 - 1,439 1975 31,950 1,559 1,559 1976 30,391 1,559 1,559 1977 28,832 1,559 1,559 1978 27,273 1,559 - 1,559 1979 25,714 1,559 - 1,559 1980 24,155 1,559 - 1,559 1981 22,596 1,559 - 1,559 1982 21,038 1,559 - 1,559 1983 19,479 1,559 - 1,559 United States 1969 15,343 194 209 404 1970 15,149 300 253 552 1971 14,849 300 262 562 1972 14,549 300 252 551 1973 14.250 300 241 541 1974 13,950 300 230 530 1975 13,650 300 219 519 1976 13,350 344 209 553 1977 13,006 527 245 772 1978 12,479 631 330 960 1979 11.848 631 311 941 1980 11,218 631 292 922 1981 10,5~87 631 273 903 1982 9,956 631 254 884 1983 9,326 631 235 865 Table 2 (continued) (thousands of U.S. dollars) Page 5 beginning of period, Year undisbursed Amortization Interest Total Loans from other governments 1/ 1969 48,424 1,989 611 2,600 1971 41,787 4,649 1,069 5,718 192 7138 6,0999 73y 1973 30,729 4,169 68L! l 974 26,/0 , > ,169 624 L4, (Y 1975 22,392 4,169 564 b 73' 176 18 e',223 4,120 505 1 e- 1977 16,103 4,120 h7, 17to 9,983 2,300 389 20 c 1979 7,683 2,300 331 2,631 90 5,3083 1,h42 273 1.7J-5 1981 3,941 1,981 272 2,253 1982 ,960 1,960 272 2,232 1983 1/ Includes: Amount outstanding as of Dec. 31, 196 Kuwait $15,440,000 Kuwait Fund for Arab Economic Development $18,984,000 Saudi Arabia $19000 00 Source: Statistical Services Division; Economics Department  Table 3 Labor Force by aector of Employment in 1961 (number of persons) Sector East Bank West Bank Total Agriculture 72,952 64,805 137,757 Mining 4,770 4,416 9,186 Manufacturing 17,508 15.238 32,746 Constructior 22,203 17,956 40,159 Utilities 1V 925 647 1.572 Commerce 17,452 13,90 31,356 Transport and Communications 7,624 4,275 11,899 Services 28.685 21L.840 53.525 Unknown 45,722 26,056 71,778 Tot2 217-8Al 172 1 17 189-978 1] Electricity, gas, water and sanitary services. Source: First Census of Population and Housing. vol. 2, May 1964; Department of Statistics. Table 4 GDP and GNP by Sector of Origin (millions of Jordan dinars; current orices) 1961 1962 1963 196h 1965 1966 Crops and forestry 21.0 131 -I R 1)12 P -2 2'1 n 1q.98 Livestock 2.47 7.72 7.96 8.52 11.06 11.67 Total Agriculture 25.30 20.90 22.08 34.14 34.11 27.65 Manufacturing 7.67 6.71 9.10 10.83 13.73 14.77 Mining 1.16 1.3 . 1.7 2.4 2- Construction 4.50 6.15 6.12 5.15 7.87 9.23 Flectricity and water supply 0.67 0.74 0.93 1.03 1.68 1.97 Transport If.6V4 12.53 12.7 1 2.0 12*- 142 Wholesale and retail trade 24.2u 23.63 26.3 28.0 . 2 Banking and finance 1.27 1.46 1.35 1.51 2.11 2.77 Ownership of dwellings 8.u0 u.58 9.37 7.9 10.69 *1 Public administration and defence 1.74 t l Iuo it.u. 17.Iv eL.L. U Services 8.63 9.51 10.37 11.19 12.83 14.10 GDP at factor cost 110.87 108.62 117.67 135.52 150.95 149.61 Plus indirect taxes 9.27 10.2o 11.39 13.4 16.6U 20.U Total GDP at market prices 120.14 118.90 129.06 148.95 167.61 170.50 Plus net factor income from abroad 7.00 11.93 8.6 11o6 12.93 15 1 GNP at market prices 127.14 130.83 137.62 160.62 100.51 185 .65 Source: The National Accounts, 1959-1967; Die~ ~ + pa t-11Un f +tati-sics. Table 5 Expenditure on GNP at NArket Prices (millions of Jordan dinars* current 7rics) 1961 1962 1963 1964 1965 1966 Privave consumptioC '.6 J v 23L)6ur 116.8 '22 138-ch 09.61 Government consumption 28.12 29.04 33.04 32.27 36.79 39.17 formation 11.48 13.95 12.86 12.80 13.55 15.20 of Government 5.47 8.06 7.16 5.97 10.35 12.0 Change~ in stck 1.7 ( -1.f79 -0.0 6.52. 3 .89 1 Expenditure on consumption and gross capital formation 149.80 151.62 169.86 181.03 202.62 215.o Exports of goods and services 16.95 19.08 20.06 2h5 1 2. 32.06 Expenditure on gross domestic product and imports 166.75 170.70 190.12 205.60 231.16 27.10 imports of goods and services 6.61 51.au 61.o6 56.65 63.5 -76.60 Expenditure on gross domestic 7roduct 120.11 118.90 129.06 148.95 167.61 170.0 Net factor income from abroad 7.00 11.93 8.56 11.67 12.93 15.15 Expenditure on gross national product 127.14 130.33 137.62 160.62 18o.5h 185.65 Source: National Accounts. 1959-1967; Department of Statistics. TabiA 6 Composition of Gross fln.mA_qt.in rnnit.al Fr ,inAn (millions of Jordan dinars) 1961 1962 1963 1964 1965 196 Dwellings . O. 7.6U 7.69 7.42 b.nL Non-residential buildings 1.06 0.93 1.L5 1.34 1.98 1.L9 Farm construction 0.25 0.22 0.44 0.25 0.35 0.86 Public construction and works 4.7b 6.98 6.32 4.94 9.00 11.60 U.N.R.W.A. construction 0.20 0.27 0.10 0.08 0.05 0.10 Transport equipment 1.59 2.30 1.34 1.49 1.60 3.63 Others 3.94 4.83 2.77 2.98 3.50 3.93 Total fixed capital formation 16.95 22.01 20.02 18.77 23.90 27.65 Change in stocks 1.97 - 1.79 - 0.02 6.52 3.89 - 1.39 Total capital formation 18.92 20.22 20.00 25.29 27.79 26.26 Smi ! Naenpna Acount-of 19S9-t967: Department of Statistics. Table 7 Summary of Agricultural Income and Expenditure (millions of Jordan dinars) 1961 1962 1963 1964 1965 1966 Proceeds Grains and legume 5.65 h.50 3.06 1o.8h 10.03 - .2h Vegetables 7.87 6.87 7.36 8.7 9_ 5.7 Tobacco 0.39 0.29 0.10 c.hl o.L0 0.31 Fruits, vie and olives 9.00 3.h 5.32 7.93 5.65 7.51 Forest products 0.20 0.16 0.r 0.1.3 0.r i) Sales of aninas 2.L8 2.30 3.37 3.36 .2? 6.15 Animal products 2,.63 2.71 3.12 2,93 33 h.01 Poultry and game 1.26 1.57 1.70 2.03 Ž.62 2-79 Honey _n 0.05 0.03 o.On 0.h 0.05 Fish 0.03 0.01 0.01 0.oh o.oh O.oh farms (labor) 0.16 o.l 0.29 0.15 0.22 o.., numbers - 2.02 0.8siý 1.L3 2.77 1.15 Total 29.71 2h.09 25.37 37.86 38.72 32.66 Cos t Seeds 1.51 .09 1.11 1.02 0.96 Machnery expenses 0.2' 0.31 0 3 0. 2 0.55 0.60 Fertilizers 011 0 0.,23 0.26 0. L 0.h7 0. -, tX. ^,^ ^.f "I fl ' i ^." Insecticides .]5 .6 .J ..11 v. .i An.im feed 0.7h 0.92 i,06 1.26 1.90 2,33 e g.01 0.01 .0L u.UI u.2 V.0Uj Irrig 3tion expensøs 0.31 0.32 0.37 0.37 0. 3h 0.33 imported chicks 0.U. 0.05 0.09 0.20 0.26 0.19 Reduction in livestock numibers 1.39 - - Total .hi 3.19 3.29 3.72 1 5.01 Net farm income 25.30 20.90 2240 3. 5. 3.L Source: National Accounts, 1959-1967; Department of Statistics. ?"aie 5 ProdgC n flI r nd r lttr a du te Iroduct Urit 1963 196 196966 196 1968 Phnsphxtes 1,000 m.t, 615 604 o812 1,001 1.089 7 Cement 1,000 m.t. 25- 308 31 375 259 Vegetable oils 1,000 m.t. 6.0 5.8 5.5 6.l 2.0 Petroleum products 1,000 m.t. 30h 337 380 30 33 39 Sol e leather lnetrie ton 260 233 380 Uprer leather 1,000 aq. ft. 2,378 2,354 1, 7 ,6 Dexergents *1,000 m.. n4-. Li;uid batteries 1,000 l 60 h6r Matches 1,000 grog 2 102 69 Ci,,arettes 1, 000 m.t. .0 15 1.2 1.5 1.3 å, 5e-r 1,00 liters 81, 825 85$ 1,268 1,1151 Alcobol and alcoholic beverages 1,000 liters 730 913 1,089 1,167 782 ) aer 1,000 m.t. 1-7 1 Str9l bars 1,000 m.t. 1 Eicctricity min. kWn. 1i4 136 1D6) 1 7 h1000 m.I. 76 290f 27 101 7 Barley 1,000 m.t. 23 97 95 23 13 Tobacco 1.000 m. t 0.5 2.2 1. 1.6 f.0 Other field crops 1,000 in.t. 58 57 65 25 3 Tonatoes , 1.000 m.t. 215 228 189 179 168 3 Other vegetables / 1,000 m.t. 201 22b 234 232 237 Olires 1,000 m.t. 39 98 37 33 Granes 1,000 $.t. 59 77 7? 62 1 Citrus fruits 1,000 m.t. 36 37 47 49 b åater melons 1,000 m.t. 120 160 i6Ä 48 101 Other fruits É 1,000 m.t. h7 5o 60 5h h0 i3 .1-^-% dn. nn 4d 01. vestock SLauglUUrae 1,o00 501 477 u53 68UL 3 1/ Industrial production excludes output of West Ban-k enterprises begining June 1967. Agricultural production (except livestock slaughtered) includes estimates for the West Bank for 1967 and 1968. Livestock slaughtered is exclusive of West Bank production for 1967 and 1968. 2/ Mainly lentils, kersenneh, dry broad beans, chick peas, sesame and maize. 3, 11ainly eggplants, oni-ons, gar-, c-ucumbers, caulliflower, cabbages, and po Latoes. / Mainly apples, pears, plums, peaches, alnonds, apricots, fiF-zs, and pomegranates. 6/ Mostly sheep and goats. See also footnote 1. Sour2e: Statistical Yearboak, Department of Statistics. Balance of Payments (millions of Jordan dinars) 1963 1964 1965 1966 1967 1?60 Goods and Services (Net) -36.2 -24.5 -26.9 -35.5 -27.i -44.4 T T-- 2~- Exports 6.6 8.7 9.9 10.I 11.3 14.3 Tad e defici -Tn -hOr)7 -T 779 -7- -T9 7 J7 D-s1 R 7 01.0 Q7. -1 5 9 of which: Transportation 1/ 1.8 1.2 2.4 2.4 1.9 1.7 Inetmnicm -1.7 'A. 7. 59 Travel 6.0 8.0 9.8 11.3 6.8 4.6 U U~J-I11 . L - l L . -L / 6 Other 2 8.6 11.9 10.6 12.1 7.8 L.5 Payments for services - 7.8 - 7.5 - 8.3 - 9.8 -10.3 -24.2 o WHIc'H arave" - C.c - ). - .) - .t - . - r Investment income - 0.3 - 0.2 - 0.5 - 0.5 - 0.8 -0.9 overmen - -1 .17 1 Q Other - 1.8 -2.2 - 1.8 - 2.1 - 2.4 - 2.5 Transfer Payments 24.1 28.5 29.5 34.1 53.9 54.5 W-" -m" -1M- Private 1.0 e.u e. c., C. L. Public 22.5 26.6 26.8 31.4 51.6 53.1 of which: from Arab countries - 4.5 7.3 9.5 3u u.U from U.K. 1.5 1.5 1.4 1.3 1.5 - from U.S. 1-5.5 1 5. 0 12.0 13-4 7.-6 . from UNRWA and other UN 5.5 5.4 6.0 .6 .o . from other sources - 0.1 .0.1 1.6 0.1 0.1 Capital (Net) 4.6 6.2 2.6 5.2 2.0 5.0 Private capital (net) 0.9 0.3 0.3 0.3 - 0.1 Public capital (net) 3.6 5.9 2.3 4.9 1.9 5.u of which: inflow 4.2 7.0 3.0 6.1 2.1 6.0 outflow 0.6 1.1 0.7 1.2 1.r 1.0 Monetary Sector (Net) 3.0 -17.1 - 6.2 - 8.9 -33.2 -10.3 Errors and Omissions 4.4 6.8 1.0 5.1 5.o 1.3 1/ Including oil pipeline duties, amounting to JD 1.4 million in 1968. 2/ Mostly remittances from Jordanians working abroad. (1966: JD 10.6 millior'.. 3ource: Central Bank of Jordan; Jordan Development Board. Table 10 Composition of Exports according to SITC (millions of Jordan dinars) SITC 1965 1966 1967 19681/ Total exports2/ 7.6 8.8 10.0 11.8 0 Food and live animals 3.9 . 5.6 . 01 WILJLli L;.L L US J1U(UL . bananas 0.2 0.3 0.2 0.2 watermelons 0. 0.2 0.3 0.2 other fruits 0.2 0.2 0.2 0.3 tomato juice 0.8 1.9 1.8 2.3 other vegetOables, 1. L 0.9 1. L 1..t 1 Beverages and tobacco u.4 0.3 0.7 0. of which: cigarettes . 0.3 0.7 0.7 2 Crude materials, inedible exceot fuels 2.8 3.0 3.7 .4 of which: phosphate 2.4 3.1 3.7 U.2 3 Mineral fuels, lubricants, etc. - - 0.1 0.1 L Animal and vegetable oil and fats 0.1 0.1 0.3 0.2 5 Chemicals - - - 0.1 6 Manufactured goods classified by material 0.1 0.1 0.2 0.h 7 Machinery and transport equipment 0.1 0.2 0.2 0.1 8 Miscellaneous manufactured articles 0.2 0.2 0.2 0.2 9 Other - 0.1 - 0.5 1/ First nine months on a yearly basis. 2/ Excluding re-exports. Source: Department of Statistics. Table 11 Composition of Imports according to SITC (millions of Jordan dinars) ST TC 1965 1966 1967 168 Code To)t.,i imnort-, 56.1 68. 2 55.0 56. 0 Fnd anr 11vA nninnI. 1L.2 17.5 13.6 12.3 of which: live animals 1.2 1.3 1.2 1.2 dairy prndcts 1.1 1.1 1.2 1.2 wheat and flour 2.3 L.3 2.5 2.6 Tie 1.5 1.5 1.3 1.2 sugar 2.0 2.0 1.6 1.9 frui+s and -vegtable 2.2 1.9 1.7 1.6 coffee, tea, cocoa and e, 1.6 1.8 1.6 1.6 1 Beverages and tobacco 0-A 0.8 .110 of which: crude tobacco 0.7 0.7 1.0 0.9 2 Crude materials, inedible, exceptfes?. of which: wood and cork 1.0 1.3 1.3 0.7 -2 - () I r 1- U1.1 sed'0 etc textile fibres 0.5 O.h 0. 0.3 3 Mineral fuels, lubricants, etc. 3.2 3.4 3.0 3.1 of which: crude oil 2* *2* L4 Animal and vegetable oils and fats 1* * Chemicals . of which: medical and pharmaceutical products 1*3 1* * v manufactured goods classified by material 14.4 16.5 lL. 8.c of which: rubber manufactures 1.0 1.3 u. paper and paper board 1.0 1.3 0.9 0.L textile yarn and fabric 6.6 6.7 .u Machinery and transport equipment 9.o 11.8 1 . of which: transport equipment 3.0 7.7 T77. 8 Miscellaneous manufactured articles 2.7 3.1 2.h 0.8 of which: clothing and footwear 0.9 1.0 0.7 .? scientific, optical equipment 0.5 0.6 0.7 0.3 9 Other 4.5 7.1 2.6 16. 1/ First nine months on a yearly basis. Source: Department of Statistics. Table 12 Sumar of Governient Revenue and Expenditure (millions of Jordan dinars) budge t 1960/61 1961/62 1962/63 1963/64, 1964/65 196,/66 1966 1967 1969 969 Doriestic reve-nue 13.3 1h- 7 21.1 19.b 23.63 26.'7 30.8 25.5 2 4.3 25.3 Budget support 16.h 16.h 14.7 14.c 13.7 12.3 10.5 16.9 L0.0 37.7 Emergency aid -- - - - - 21.1 1.3 - Econromic and technical assistance 1.1 2.0 1. 1.7 1.7 2,h 2.6 2.L1 0.3 3.h Loans 3/ o.' 0.5 2.0 1.3 7.0 2.6 3.1 4.5 5.? .3 ToLi foreicn assistance 18.0 18.9 17.7 17.0 22.h 17.9 16.3 hL.9 h7.h 50.0 Tot'al revenue 31.9 33.6 33.9 36.4 h6.2 L6.6 L7.1 70.6 71.7 75.3 Deiense exoenditure 16.2 16.h 16.8 18. 6 13. 18.3 19.1 2i.2 31.3 ±0.3 Ot-her ordiw-arv expendi Lure 10.7 11.6 13.1 i4. 6 15.9 17. 3.3 20.5 21.3 22-7 Tota31 ordinary expenditure 763 25 29.9 33.2 ..¯ V~l"rer~c ~ i6.0 c, 7. é 6.2 .2 11.3 13.5 23.5 2.±61 32-., 33.0 37.6 2*3 1355. 39. c) 6 3. -3I 1/i 6 ed ? months. Figur'es given in this co'lurm -re on i i2 mn Au n be derived by multinling by 3/h. ne s lon: v e ovred by the Gover nent; see tale 11. Table 13 Government Expenditure (millions of Jordan dinars) Budget o()A) L/AcU I 0AC/ 1AA 04V I0 oA o4:) Ministry of Defense 18.6 18.8 19.1 24.2 34.3 40.3 r1iLLj zj duLL,Lf s) ur YJ of E cl tin4. 7 " . 7 C, Ministry of Health 1.2 1.4 1.7 1.8 1.9 2.0 and Labor 0.3 0.3 0.3 0.3 0.3 0.3 111str o4 f A gr.LL -1 c u.1t- V.4 Ij. Ij U. L4 U.L4 U. U. D Ministry of National Economy - - 0.1 0.1 0.1 0.1 rinistry of Public Works ; u.u .u 0.8 0., 0. Ministry of Communications//PTT 0.7 0.7 0.8 0.8 0.9 0.9 I'llaisry o f Transport U.± _L U.1 U. _ U. I Development Board 0.1 0.1 0.1 0.1 0.1 0.1 "tar' Rueources Author"x,y v.- . v. 0.3 0. Other 6.0 6.1 8.9 7.8 8.9 8.9 Total ordinary expenditure T3. 37.7 W.E.7 371 5T . Development expenditure Ministry of Education - 0.2 2.3 0.4 0.3 0.1 Ministry of Health 0.2 0.2 U.> U.0 0.0 U. Ministry of Social Affairs and Labor - - 0.1 0.1 - 0.1 Ministry of Agriculture - 0.1 0.1 0.1 0.2 0.3 Ministry of National Economy 0.1 - - 0.1 0.1 0.1 Ministry of Public Works 0.5 1.2 1.2 2.3 3.7 2.0 Ministry of Communications/PTT 0.2 0.8 0.9 0.7 0.7 0.6 Ministry of Transport - - - - - Development Board 3.3 5.1 4.9 5.5 4.4 10.2 Natural Resources Authority 0.4 0.8 1.1 1.3 1.2 2.8 Jordan and Tributaries Regional Corporation - 0.5 1.0 1.3 0.5 0.9 Emergency - - - 2.4 2.0 5.0 Other 4.4 2.3 1.3 8.8 8.7 3.3 Total development expenditure 9.2 11.3 13.7 -. 2-7 26.1 Total expenditure 43.6 47.0 51.0 68.2 78.5 8).2 1/ Fiscal 1966 comprised 9 months. Figures given in this column are on a 12 months basis Actuals can be derived by multiplying by 3/. 2/ Re-estimates. Source: Ministry of Finance.  I'ahlg 1). 0ovrnMnt Rovenna (malliona of Jordan dinews) Budreet 1964/65 1965/66 1966 1/ 1967 1968 Y 1969 Do-restic revenue W.'UU bIJ ad U cs Lues U*U Lea V .L 4 C J.* Tares (except income tax) 2.2 2.2 2.1 1.1 1.1 Tncnmp ±.y 1.3 1 2.3 1.9 1.1 Licences 1.1 1.5 1.7 1.0 0.9 1.0 Fees 2.8 2.6 2.3 1.9 1.6 1.9 PTT 1.2 1.4 1.7 1.3 1.1 1.1. State domain 0.1 0.1 0.1 0.1 - - Interest and profits 3.5 1.8 2.1 2.1 3.0 1.1A Miscellaneous 3.1 2.8 3_0 3.8 3.2 3.9 Total domestic revenue 23.8 26.7 30.8 25.5 24.3 25.3 Foreign assistance Budget support 13.7 12.8 10.5 16.9 40.0 37.7 of which from: USA (12.2) (31.h) ( 8.8) ( 6.1) ( 2.3) ( - ) UK (1.5) (1.h) (1.7) ( 1.0) ( - ) ( - ) Arab countries ( ) ( - ) ( - ) ( 9.8) (37.7) (37.7) Economic and technical assistance 1.7 2.4 2.6 2.4 0.3 3. 4 of which from: USA (1.6) (1.9) (1.8) (0.8) (0.3) (15) . . . ./ 1 l/ W1 /> 11 In a 1/a Arab countries - j U LU*j (1.0) - ) (J.0; other countries (0.1) (0.1) ( - ) (0.6) ( - ) ( - Emergenr.y aid - - - 21.1 1.3 - Loans 7.0 2.6 2.9 4.3 5.2 8.1 of which from: USA ( - ) ( - ) (0.1) (0.5) (0.5) (2.1) Ux (0.7) (0.7) (1.0) (0.2) (0.4) (1.5) West Germany (0.2) , (0.2) (0.2) (0.5) (1.4) (2.2) Kuwait (5. N!' (0.9) (1.3) (0.6) (0.3) (0.7) Saudi Arabia ( - ) (- C - ) (1.5) (2.5) (1.0) 1DA kU*>) U.Of (U.z) (U.7) (U.2) (U.U) Others (-) (-) (-) (0.2) ( - ) (0.2) Loans repaid to the Government 2/ 0.3 0.2 0.5 0.7 TotnL forPin assistance 22.4 17.9 16.3 44.9 47.4 50.0 Totji revenue 46.2 44.6 47.1 70.4 71.7 75.3 Footnotes: see next page. Table 14 (cont1nue') 1/ Fiscal 1966 comprised 9 months. Figures given in this column are orn a 12 months basis. Actuals can be derived by multiplying by 3/4t. 2/ Re-estimates. 3/ This represents repayments in local currency of external loans made tO specialized agencies through the Central Government. V/ Includes a JD 5.0 million budget support loan from the Government of Kuwait. All other loans are development loans. Source: Ministry of Finance. Table 15 Government Shareholdings in Industrial and Commercial Enterprises as of December 31, 196d (Amounts in thousands of Jordan dinars) 0/0 Nominal Paid un Government Participation Capital Capital share- in nominal holdinps caDital 1. Jordan Cement Co. 4,500 4,500 2,228 50% 9. Petrnlum PP-inary 8 6n5n 660 00 3. Phosphate Co. 3,000 2,635 1,526 51% 1 Vegetahle O C.0 1V1r1A 179 ___ 5. Jordan Fisheries Co. 100 61 16 16% 6 Arb Pharmanenutial Manufacturing Co. 250 242 55 22% 7 .ordan P-na- T-i.c+r AO1 A5O Ot 8. Tanning Co. 400 400 100 25% 9. Jordan Hotels and Tourim Co 721 723 A2 8r% 10. Arab Potash Co. 4,501 3,ol6 500 11% 11 T 1,4A I.+w4. Pnnn 1 AI AA 1- 1 7c 12. Jordan Electric Co. 2,500 2,440 60 2% -L _) . 11u.Ji.Y "a~ikk ilI.o.J % uVYI .)k.i.J .J.. 16. Industrial Commercial 15. Hummeh Hot Springs Co. 75 75 30 40% TU. A han Bus u'liuon ou.u 17. Jordan Confectioneries and -~~~~~ ri- l a-,~O unucolate Facuories uo. uu 18. Jordan Worsted Mills Co. 450 441 110 2L% -L,7 * VUL.L01 . L .L I . Lopw'I i U UV. _,VV.jr- L). 20. Jordan Press and Publication Co. 100 85 25 25% 22. Jordan Dairy Products Co. 100 16 30 30% Total 30,049 25 563 7 438 25% Source: Ministry of Finance.  Table 16 Banking and Monetary Statistics (millions of Jordan dinars) 196h 1965 1966 1967 1/ 968 Central Bank (assets and liabilities as of December 31) Foreign assets 27.3 49.9 59.9 87.2 101.6 Currency in circulation 23.0 26.4 30.3 51.53 Deposits of banks 1.6 9.0 15.0 18.17 Government deposits 0.9 11. 11.1 18.5 Other items (net) 1.8 3.1 3.5 2- Commercial Banks (assets and liabilities as of December 31) Liquidities and C.B. deposits 1.6 8.9 lh.8 18.L 1 Foreign assets 2h.7 10.1 7.3 5.3 Claims on private sector 29.5 33.7 39.8 39.82 of which: agriculture ( 0.7) ( 0.6) ( 0.8) r 7 industry ( .3) (4.8) ('.2) 0 trade (r17.1) (20.3) (17.3) construction ) 2.) .1) r transportation (2) (2.) (1.8) 1~..3) tourism (1.0) (1.0) (1.1) 1 other ( 6.6) ( 8.8) (i05. ) Demand deposits 19.1 22.5 27.3 28 Time and savings deposits 1-.2 18.3 20.6 20.1 21-5 Government dfposit_ 13.8 1.h 2.8 6.- Foreign liabilities 2.7 3.3 2.9 2.6 2,6 Other items (net) 6.0 7.2 8.3 9.6 l- Specinaie Bank (loans.disbursed) Industrial Development Bank 2/ 0.1 0.1 0.5 0.5 Agricultural Credit Corporation 0.7 1.2 1.5 0.6 'unicipal and Village Loan Fund 0.5 0.5 0.4 0.2 0-7 Aousing Agency- - n. I. C.3 JMon.ey Spl (situation as of December 31) Demand deposits 19.1 22.5 27.3 24.8 25.5 Currency~~~9 in ficuato 23. 26-4"3 5 3 Money supply h2.~ l~7. 76.~ continued on next page Table 16 (continued) Foreign Exchange Reserves (situation as of December 31) Central Bank 27.3 49.9 59.9 87.' Commercia1 BAnk- 2.7 10.1 7.3 5.3 Government 3.5 3.2 2.6 2.1 1 , 63.2 69.-7,01r Commercial Banks' foreign labilities 2.7 3.3 2.9 2.6 Net foreign exchange reserves 52.8 59.9 66.9 92.0 106,8 1/ T-ta on co-mrcia n i-nclu.de Aq+timntn fc, Wfn t Banq TI rapnhi 2T Ai4z " n1 nn,..gxl eNnync»n+- Wiim:A. For 1964 data apply to the Inu stra De- e lpmen Source: International Financial Statistics, IF'- Central Bank. of Jordan. Table 17 Estimated Debt Service and Deht Servion Ratirs 1970-197h (AmointA in millinnq nf IL3 rIlArs) 1968 1970 1971 1972 1973 197L Budget support 112 106 106 10 106 16 Exports, high 120 128 136 1lt 152 1,,. 10 n n h i n~h 10h W.J'JV V01 1.9 it 14 7.1 7. '1 a_ soft 7.1 7.3 9.1 7.9 8.5 Debt service ratio on exports plus budget support (o/o) soft debt, high exports 3.1 3.1 - 3.8 3.2 3,3 U.Y, hard debt, low exports 3.4 3.5 1.5 h.7 5e, Debt service ratios on exports only (o/o) soft debt, high exports 5.9 5.7 6.7 5.5 5.6 hard debt, low exports 6.8 7.0 9.0 9.5 11.6 Assumptions: xpor gr w - 1I umIVUe an JLncrease 01 .pa ma1-ion per y)e71 . (191-1966) growth excluding earnings from tourism. now denotes stable export earninga. Terms of new debt - hard denotes 6 percent interest, repayment over 20 years after 6 months of grace. soft denotes 2 percent interest, repayment over 3U yeas at r 2.5 years of grace.  Mukheibeh. e HAIFA l(Under Constructi>n) y- Suwe leh 7 * Rusefo* El Azroqo Jerusalem Bethlehem Hebron,4.,.. trana Tofil r Hasa Ths apiIgve frgegrphc lnintaton onlyand no feare should be neerpretedtoimpyapositiontken by the Internat.onal Bank for Recnntructn - and Devulopment or its affiliates as tocontested boundaries .* i' I II Petr0O f-o. Noqlb J 0 R n A N RAILWAYS ASPHALT ROADS Exist,ng Pr,mary Lxxx 4..IUnder Consirucon Secondory .xxxxxxxxxx Prooosed Under Construt Aqba <.' Phnsphae Deposits \ .............. Tras-Arabi.n Pipel,ne -' Refinery MudowaraO\ 0 20 30 40 50 KM Occupied Territories SEPTEMBER 1969 ISRD 2582R