Tuesday, March 03, 2009

Burying Our Heads in the Sand? Global Financial Crisis Will Somehow Totally Bypass Jordan?

Now, I understand the desire to stay positive. I even understand that publicly airing worries may lead to a disastrous decrease in consumer confidence. But, c'mon... it seems like reporter after reporter sees Jordan as somehow immune to the crisis that is impacting the rest of the world.

The great mirage that is Dubai, which has been some sort of oasis in the shifting sands of Jordan's mindset for years, is a ghost town. The ridiculousness of building skyscrapers for the very population that is building the skyscrapers seems to have caught up to them. We've all heard the tales of abandoned cars in the airport long term parking. When I was there last week, I couldn't believe how little traffic there was. Where is the go-go high-life of Dubai? I'm afraid it has taken a body blow. But somehow Jordan is immune? Doesn't a significant portion of our FDI come from the UAE?

I caught this article in the Jordan Times today. It claims that Jordan will be just fine because of its "dynamism". Really? Is he serious? I mean, even I've been hearing that there are no car and house loans available in town. But, Jordan is going to buck a world-wide trend because of dynamism? Like the ostrich, our heads seem t be firmly planted in the sand on this one. Hopefully, I'm wrong and Jordan's economic dynamism (so expected in such a happy, go-lucky, positivity focused country after all) will indeed keep us all safe from harm. But, yikes, maybe a little less rhetoric and a little more serious thought is appropriate...

Happy Dynamo!


At 9:26 AM , Anonymous Anonymous said...

Oh my, I am SO with you. Like, how many ways can we spell 'denial'?

When I saw the headline, my first thought was "Jordan will be just fine because of PETRA".

At 9:26 AM , Blogger Mohanned said...

Since we don't produce much stuff maybe the effects will be less severe. The danger comes not from FDI(Do you mean foreign direct investment?)but from the psossibility that thousands of jordanian expats will be laid off. If I recall correctly the UAE employes about 200,000 jordanians. The money transfered by jordanian expats is what's keeping the country floating, because as a country our imports are much higher than our exports, and we consume while we don't produce..

But if you look at the issue it is more of a norm in jordan, like a month ago the king warned of a conspiracy against jordan, then yesterday he said that we should stop talking about it, HA!

At 12:33 PM , Blogger Hatem Abunimeh said...

It all boils down to the following: Many bloviators are ostentatiously disseminating apocryphal disinformation; consider the following headlines published in local newspapers over the past few months.

1) Over one billion Returned checks for variety of reasons including insufficient funds
2) Over eight hundred million social security investments losses.
3) Amman Stock Exchange lost over eight billions of its value
4) Car sales are flat, close to zero according to some reports
5) Real-estate value declined anywhere from ten to thirty percent depending on the location
6) Retail sales are dismal
7) Car rentals at forty percent level, this includes hotel occupancy rates as well as internal tourism down by half.
8) Qualified industrial zones are importing one third less than previous years, several textile factories already closed shop and fled the country.
9) Private employers in the financial sectors are beginning to pass out pink slips to their employees.
10) Liquidity is no where to be found and the interest rates are sky rocketing, perhaps the highest in the world.

So yeah, if you consider declining home as well as land value, increased consumer debt defaults, and weakened capital investment as something that has a lot of dynamism built into it then the report is very much right on the money.

At 1:18 PM , Blogger MommaBean said...

Kinzi, yep. Mohanned, I think the slow down of money coming in from outside is likely to be two-fold. Some Jordanians abroad will be laid off and companies will have less money to invest in Jordan as their business models falter in other geographies.

Hatem, somehow I missed these headlines (probably didn't make it into the Jordan Times and my Arabic isn't up to the other papers...). Maybe then, ome dynamism talk is called for... or maybe not so much. Who am I to say?

At 1:32 PM , Anonymous Anonymous said...

I see the remittance problem as hitting Jordan twice. The first when the remittances stop and there is less money in Jordan. The second when Jordanians living in the Gulf return and raise unemployment rates in Jordan.

At 11:27 PM , Blogger Ali Dahmash said...

Jordan generaly speaking is always in denial, just like someone who was in her frist realtion and just broke up! ok that is irrilevant haha
anyways, we have a weak economy that depends on US and European financial aid, and money coming in from expats. This will be affected. We already feel the heat of the ailing world economy, companies are not hiring, companies depending on foriegn trade and sales have been affected dramaticaly. Business in Jordan has been very slow as people are afraid to spend their money now.


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