Although the Qualified Industrial Zones in Jordan have resulted in as
many as 40,000 new jobs, the vast majority have gone to women under
age 22, and almost half have gone to non-Jordanians imported from
overseas. Unemployment has continued at high levels, between 15 and
20% of the workforce. When coupled with rapid growth in population,
per capita income has essentially remained unchanged since 1984,
although it has improved by about 15% over the last three years.
These factors have led to an increase in inflation, although it
remains mild at 2.5% in 2003. Nearly all Qualified Industrial Zone
employees are paid the $3.50 per day minimum wage at best, and there
is concern that many companies do not even pay that. The vast
majority of the employers are South Asian textile and luggage makers.
Over 60 factories have located in the Qualified Industrial Zones, but
almost none are owned by Jordanians.
The Qualified Industrial Zones have produced a considerable boom in
exports to United States. Jordanian garment exports to the United
States rose 175% between May 2001 and May 2002. Qualified Industrial
Zone exports to the United States amounted to $586.6 million in 2003.
Exports from outside the Qualified Industrial Zones to United States
have also increased, rising from $42.5 million in 2002 to $86.8
million in 2003. Total Jordanian exports to the United States have
increased from $16.4 million in 1998 to $673.4 million in 2003.
Imports from Israel to the Qualified Industrial Zones have increased
because of the requirement for a minimum of 8% Israeli content to
qualify for duty-free status. After a drastic drop between 1997 and
1999, US exports to Jordan have rebounded to $491.9 million in 2003.
In conclusion:
The Qualified Industrial Zones have had very little effect on national
income because only a tiny percentage of the work force is employed at
a Qualified Industrial Zone, most factories are not owned by
Jordanians, and wages are extremely low. Unemployment has been
largely unaffected because only about 20,000 Jordanians are employed
at Qualified Industrial Zones. Inflation has been mild during the
last few years, so there appears to be no effect there, either. Where
the Qualified Industrial Zones have had a dramatic impact is on
exports and imports, especially exports. The increased trade with the
United States may have also sparked the increase in trade in non-QIZ
products as well. However, the QIZ factories are almost entirely
focused on textiles, which has not diversified the Jordanian economy
and has left it vulnerable to the phasing out of textile quotas that
has occurred this year.
Sincerely,
Wonko
"The Newest Jordan: Free Trade, Peace and an Ace in the Hole" by Pete
W. Moore, Middle East Report Online (June 26, 2003)
http://www.merip.org/mero/mero062603.html
"Pop QIZ time" Al-Ahram Weekly (18 - 24 November 2004)
http://weekly.ahram.org.eg/2004/717/ec3.htm
"Q.I.Z ? Qualifying Industrial Zones" Ministry of Industry, Trade &
Labor, State of Israel (2005)
http://www.moit.gov.il/NR/exeres/2124E799-4876-40EF-831C-6410830D8F02.htm
"Jordan's Sweatshops: The Carrot or the Stick of US Policy?" By Aaron Glantz
CorpWatch (February 26, 2003)
http://www.globalpolicy.org/nations/sovereign/statehood/exportpz/2003/0226jordan.htm
"U.S. - Jordanian Commercial Relationship" Northern Virginia
Technology Council (May 13, 2004)
http://www.nvtc.org/internat/relations.htm
"Jordan at a glance" The World Bank Group (September 29, 2004)
http://www.worldbank.org/cgi-bin/sendoff.cgi?page=%2Fdata%2Fcountrydata%2Faag%2Fjor_aag.pdf
"Jordan Data Profile" The World Bank Group (August 2004)
http://devdata.worldbank.org/external/CPProfile.asp?SelectedCountry=JOR&CCODE=JOR&CNAME=Jordan&PTYPE=CP |
