Yusuf Mansur

Export growth alone is not enough to judge the success of an economy. A country may export more while remaining locked into simple, low-value, or primary products. This is why the Economic Complexity Index (ECI), developed by Harvard's Growth Lab, has emerged as a more comprehensive measure of long-term economic development.

The index assesses not only the diversity of a country's exports but also the sophistication and rarity of those products relative to the rest of the world. It reflects the amount of knowledge, technology, skills, and institutional capability embedded in production. Countries that export a wide range of technologically advanced products score highly, while those dependent on raw materials or basic commodities receive lower rankings.

Jordan ranked 26th globally in 2001, but by 2023 its position had fallen to 45th, representing a decline of 19 places over 22 years, despite improvements in several other economic indicators. The real concern is not merely Jordan's current ranking, but the fact that it once occupied a much stronger position. This suggests that Jordan's productive capabilities have not evolved as rapidly as those of competing economies, causing its relative standing to decline even as exports continued to grow. More broadly, Jordan remains positioned around the middle of the global rankings, performing below what its educational achievements and human capital would suggest.

Perhaps even more significant is the long-term trend. Jordanian studies indicate that the economy has become less complex over the past decade. The decline in its relative ranking reflects the fact that many other countries have upgraded their industrial capabilities and diversified their export baskets at a much faster pace.

Why has this happened? The first reason lies in the structure of Jordan's exports. The country's export basket continues to rely heavily on phosphates, potash, fertilizers, garments, food products, and certain chemical industries. These sectors are undoubtedly important—they generate foreign exchange earnings and create employment—but they are not sufficient on their own to propel Jordan into the ranks of the world's more complex economies. The Economic Complexity Index rewards countries that export machinery, precision equipment, electronics, industrial components, specialized chemicals, medical devices, and other products that only a limited number of countries can manufacture competitively.

Second, Jordan has not yet succeeded in transforming its strong educational base into an equally strong productive base. Every year, the country graduates large numbers of engineers, pharmacists, and information technology specialists. However, many of these highly skilled professionals either work abroad or are employed in service industries whose value is not fully reflected in export-based measures of complexity. This creates a clear paradox: Jordan possesses substantial human capital, yet its institutions have not converted enough of that knowledge into sophisticated, exportable industrial products.

Third, investment in research, development, and innovation has remained relatively modest. At the same time, collaboration between universities and industry has been weak. In highly complex economies, universities do not operate in isolation; they play a central role in developing new products, advanced materials, and innovative production processes. In Jordan, however, much academic research remains disconnected from the practical needs of businesses and international markets.

Fourth, Jordanian manufacturing faces structural challenges arising from the country's relatively small domestic market and the high cost of production, particularly energy, financing, and transportation. Regional instability and border closures over the past decade have further constrained firms' ability to expand into new markets. Since the 1990s, Jordan's strategic vision has emphasized greater integration with advanced economies, which generally offer larger and more stable markets than many neighboring countries. Yet this objective has only been partially realized. In addition, Jordan's participation in global value chains remains relatively limited, reducing opportunities for technology transfer, industrial learning, and productivity growth.

Fifth, industrial policy has not always been sufficiently focused or consistent. Economic complexity cannot be increased simply by supporting every sector equally. Instead, governments must identify industries that build upon existing capabilities while enabling movement into higher-value products. Jordan does not need to start from scratch. It already possesses competitive foundations in pharmaceuticals, fertilizers, chemicals, information technology, and renewable energy. The challenge is to move these sectors beyond traditional production toward more specialized and technologically sophisticated products.

In the phosphate sector, for example, the objective should not be merely to increase exports of raw materials, but to expand production of specialized fertilizers, industrial chemicals, and battery materials. In pharmaceuticals, Jordan can move beyond generic medicines into biotechnology, clinical research, medical devices, and active pharmaceutical ingredients. In the energy sector, opportunities exist to manufacture components for solar energy systems, energy storage technologies, green hydrogen, and associated engineering services.

Jordan should also recognize digital exports and knowledge-based services as integral components of economic complexity, even if they are not fully captured by traditional merchandise trade indicators. Software development, cybersecurity, digital financial services, engineering design, and creative industries all have the potential to become significant sources of value creation and export earnings.

The objective, therefore, is not simply to increase exports but to transform their composition. This requires a coherent industrial policy, a dedicated innovation and advanced manufacturing fund, incentives linked to technology transfer and workforce development, government procurement policies that encourage advanced domestic production, and stronger partnerships between universities and the private sector.

Jordan's declining position in economic complexity should not be viewed as a final verdict but rather as an early warning. The country possesses the educational and industrial foundations needed to reverse the trend, but it must accelerate its transition from exporting what is readily available to producing goods and services that embody greater knowledge, technological sophistication, and value added.

Ultimately, the question that should guide Jordan's economic policy is not simply: How can we increase the value of our exports? Rather, it should be: How can we ensure that every dinar of exports contains more knowledge, technology, and value added? Only then will economic growth represent not merely an increase in quantities produced, but a genuine enhancement of the nation's productive capabilities.

The writer is a Former Jordanian Minister of State for Economic Affairs.