Dr. Hamad Kasasbeh

Shifts in regional trade and energy flows show that the economic value of location is not fixed; it is reshaped whenever access to markets changes. For Jordan, the current moment matters because it raises a question that goes beyond ports and corridors: can geography become part of a broader growth base—one that connects Jordanian production to larger markets, attracts investment serving the region, and gives the Kingdom an economic role beyond the limits of its domestic market? At its core, the issue is whether Jordan can expand the effective economic space in which its firms can compete efficiently.

Recent developments offer a practical indication that this may be possible. Transit traffic through Aqaba rose by 155.1% in the first half of 2026 as part of the trade destined for Iraq shifted toward the Jordanian route. The figure is not the point in itself; rather, it signals a relative change in the value of access through Jordan. When companies reorder their routes, they are also reassessing cost, time and risk—the factors that ultimately determine economic proximity between markets.

This logic has deep roots in the Jordan-Iraq relationship. In the 1980s, ties between the two economies extended well beyond merchandise trade to transport, energy and broader mutual interests, while the Iraqi market became increasingly important for Jordanian producers. What matters today is not the form that relationship once took, but the logic behind it: the more links two economies develop, the more capable geographic proximity becomes of generating economic value. That provides a basis for rebuilding the relationship on modern foundations driven by competitiveness, investment and production networks.

The more important question, therefore, concerns production rather than transit. Iraq can serve as a genuine extension of the market available to Jordanian sectors that have room to grow beyond domestic demand. More reliable access allows factories to spread fixed costs over larger output, improve productivity and margins, and strengthen the case for further investment. Jordanian national exports to Iraq rose by 11.7% to JD525 million in the first seven months of 2026, pointing to an existing commercial base that can be deepened and translated into more durable demand for domestic production.

Another effect becomes visible when trade is viewed in both directions. Imports moving toward Iraq create additional value if they are matched by expanding Jordanian exports in the opposite direction: empty return journeys decline, transport efficiency improves and the cost of reaching the Iraqi market falls for Jordanian producers. In this way, greater two-way trade can strengthen export competitiveness without direct support, because part of the advantage comes from the efficiency of the trade flow itself.

The investment implications are equally important. As the market that can be served efficiently from Jordan expands, the investor’s calculation changes. A factory established in the Kingdom is no longer confined to domestic demand; it can be positioned to serve a broader regional market. This can make Jordan more attractive to firms seeking a stable base for production, assembly or services aimed at Iraq and neighboring markets, turning location into a factor in the investment decision rather than merely an advantage in transport, and broadening the range of projects that become commercially viable from Jordan.

This logic would deepen further if the Iraq-Aqaba oil pipeline moved from study to implementation. If realized, the project would add a strategic layer to the relationship beyond trade by linking energy interests to the existing economic base, giving Iraq an additional export outlet and strengthening Aqaba’s place in the regional energy network. The recovery of overland trade northward through Syria and onward to Turkey could also restore Jordan’s land access to a wider set of markets, adding another dimension to the value of its location within the regional trade network. As trade, production, energy and investment become more intertwined, the value of location rises through the accumulation of connections rather than geography alone.

Regional shifts may therefore offer Jordan an opportunity to redefine its economic advantage on a deeper basis. The key measure will not be how much trade passes through its territory, but how much production, exports, investment and durable economic ties that movement generates. The denser these links become, the less Jordan’s locational value depends on a temporary political or commercial disruption and the more it rests on a network of interests that is difficult to replace. At that point, Jordan moves from benefiting from its location to building economic value around it—and geography becomes part of the growth equation rather than merely its backdrop.