Jordan’s economic challenge is not simply the size of its import bill, but rather the nature of the goods it imports and the extent to which domestic production could replace some of them. When a country imports products that could potentially be manufactured locally, it incurs more than the direct cost of those imports. It also misses opportunities to expand its productive capacity, create employment, generate higher value added, and strengthen linkages across economic sectors.
In this context, the study “An Assessment of Production Gaps and Alternatives for Import Substitution: Potential Investment Opportunities”, prepared by the Jordan Chamber of Industry, provides an important contribution to the debate on Jordan’s industrial development. Rather than focusing solely on the conventional discussion of the trade deficit, the study seeks to identify specific areas where import dependence could be transformed into viable domestic investment opportunities. Drawing on Jordan’s foreign trade data for 2025, it reveals significant differences in the scale of production gaps across various industrial sectors.
According to the study, imports of products for which no equivalent domestic production was identified amounted to approximately JD 9.048 billion. Engineering, electrical, and information technology industries accounted for the largest share, with imports valued at JD 3.851 billion, representing approximately 42.6 per cent of the total. Mining industries ranked second, at JD 1.556 billion, followed by food, provisioning, and livestock industries, at JD 1.477 billion.
These figures suggest that potential investment opportunities extend well beyond a single industrial sector. Imports in the chemicals and cosmetics industries amounted to approximately JD 524 million, while leather and garment industries accounted for JD 491 million and pharmaceutical industries and medical supplies for JD 338 million. Construction industries recorded JD 257 million, plastics and rubber industries JD 243 million, packaging, paper, and cardboard industries JD 163 million, and wood and furniture industries approximately JD 148 million.
Yet, the significance of these figures lies not only in the value of imports, but also in the specific products that account for these gaps. In engineering industries, for example, the study identifies trade gaps of approximately USD 120 million in industrial valves and fittings and USD 121 million in air pumps and compressors. These products serve as essential inputs for the energy, water, construction, and manufacturing sectors. Developing domestic production capacity in these areas could therefore strengthen local supply chains and reduce the dependence of other productive activities on imported industrial components.
The pharmaceutical and medical industries offer another important example, particularly given their strategic significance. The study identifies a trade gap of approximately USD 509 million in pharmaceutical preparations and USD 242 million in human and animal blood products used for therapeutic and diagnostic purposes. Although Jordan has an established pharmaceutical manufacturing base, these figures point to potential opportunities to expand into more specialised and technologically advanced products. Such expansion could enhance pharmaceutical security while increasing the technological content and value added of national industry.
In the food sector, the potential lies partly in strengthening the connection between agricultural production and food processing. The study highlights opportunities in frozen potato production, food processing, and the refining and packaging of vegetable oils. These activities could create stronger links between farmers and manufacturers, allowing agricultural products to be transformed into higher-value goods rather than being marketed primarily in their raw form or replaced by imported processed products.
Nevertheless, the value of imports should not be interpreted as an immediately achievable investment opportunity or as a guaranteed reduction in the trade deficit. The existence of a trade gap does not, in itself, establish that domestic production would be economically viable. Investment decisions must take account of the availability of raw materials, energy costs, capital requirements, technology, market size, and the ability of local producers to compete with imported goods. Moreover, some industries may require access to larger regional and international markets to achieve economies of scale and attain competitive production costs.
The policy priority should therefore be to move beyond identifying production gaps and towards developing a clearly defined portfolio of priority industrial investment projects. The selection of these projects should be guided by measurable economic criteria, including the level of domestic demand, the share of local inputs, expected value added, employment generation, the potential to reduce imports and expand exports, and the extent of their linkages with other sectors of the economy.
Input-output analysis and economic multipliers could add an important dimension to this process by capturing not only the direct impact of industrial investments, but also their indirect and induced effects across the wider economy. A factory producing engineering components locally, for instance, could reduce input costs for several other industries. Similarly, an investment in food processing could generate additional demand for agricultural products, packaging, storage, transportation, and logistics services. The overall economic contribution of such projects may therefore extend well beyond the output generated by the factories themselves.
Import substitution should not be understood as a return to protectionist policies or as an attempt to shield domestic producers from competition. Rather, it should be viewed as part of a broader strategy to deepen Jordan’s industrial base and strengthen its productive capabilities. The objective is not to manufacture everything the country imports, but to identify those products for which Jordan possesses genuine production potential and can achieve competitive advantages.
The real opportunity lies in turning identified import gaps into productive investment, stronger industrial linkages, higher domestic value added and sustainable sources of economic growth.
Jordan’s economic challenge is not simply the size of its import bill, but rather the nature of the goods it imports and the extent to which domestic production could replace some of them. When a country imports products that could potentially be manufactured locally, it incurs more than the direct cost of those imports. It also misses opportunities to expand its productive capacity, create employment, generate higher value added, and strengthen linkages across economic sectors.
In this context, the study “An Assessment of Production Gaps and Alternatives for Import Substitution: Potential Investment Opportunities”, prepared by the Jordan Chamber of Industry, provides an important contribution to the debate on Jordan’s industrial development. Rather than focusing solely on the conventional discussion of the trade deficit, the study seeks to identify specific areas where import dependence could be transformed into viable domestic investment opportunities. Drawing on Jordan’s foreign trade data for 2025, it reveals significant differences in the scale of production gaps across various industrial sectors.
According to the study, imports of products for which no equivalent domestic production was identified amounted to approximately JD 9.048 billion. Engineering, electrical, and information technology industries accounted for the largest share, with imports valued at JD 3.851 billion, representing approximately 42.6 per cent of the total. Mining industries ranked second, at JD 1.556 billion, followed by food, provisioning, and livestock industries, at JD 1.477 billion.
These figures suggest that potential investment opportunities extend well beyond a single industrial sector. Imports in the chemicals and cosmetics industries amounted to approximately JD 524 million, while leather and garment industries accounted for JD 491 million and pharmaceutical industries and medical supplies for JD 338 million. Construction industries recorded JD 257 million, plastics and rubber industries JD 243 million, packaging, paper, and cardboard industries JD 163 million, and wood and furniture industries approximately JD 148 million.
Yet, the significance of these figures lies not only in the value of imports, but also in the specific products that account for these gaps. In engineering industries, for example, the study identifies trade gaps of approximately USD 120 million in industrial valves and fittings and USD 121 million in air pumps and compressors. These products serve as essential inputs for the energy, water, construction, and manufacturing sectors. Developing domestic production capacity in these areas could therefore strengthen local supply chains and reduce the dependence of other productive activities on imported industrial components.
The pharmaceutical and medical industries offer another important example, particularly given their strategic significance. The study identifies a trade gap of approximately USD 509 million in pharmaceutical preparations and USD 242 million in human and animal blood products used for therapeutic and diagnostic purposes. Although Jordan has an established pharmaceutical manufacturing base, these figures point to potential opportunities to expand into more specialised and technologically advanced products. Such expansion could enhance pharmaceutical security while increasing the technological content and value added of national industry.
In the food sector, the potential lies partly in strengthening the connection between agricultural production and food processing. The study highlights opportunities in frozen potato production, food processing, and the refining and packaging of vegetable oils. These activities could create stronger links between farmers and manufacturers, allowing agricultural products to be transformed into higher-value goods rather than being marketed primarily in their raw form or replaced by imported processed products.
Nevertheless, the value of imports should not be interpreted as an immediately achievable investment opportunity or as a guaranteed reduction in the trade deficit. The existence of a trade gap does not, in itself, establish that domestic production would be economically viable. Investment decisions must take account of the availability of raw materials, energy costs, capital requirements, technology, market size, and the ability of local producers to compete with imported goods. Moreover, some industries may require access to larger regional and international markets to achieve economies of scale and attain competitive production costs.
The policy priority should therefore be to move beyond identifying production gaps and towards developing a clearly defined portfolio of priority industrial investment projects. The selection of these projects should be guided by measurable economic criteria, including the level of domestic demand, the share of local inputs, expected value added, employment generation, the potential to reduce imports and expand exports, and the extent of their linkages with other sectors of the economy.
Input-output analysis and economic multipliers could add an important dimension to this process by capturing not only the direct impact of industrial investments, but also their indirect and induced effects across the wider economy. A factory producing engineering components locally, for instance, could reduce input costs for several other industries. Similarly, an investment in food processing could generate additional demand for agricultural products, packaging, storage, transportation, and logistics services. The overall economic contribution of such projects may therefore extend well beyond the output generated by the factories themselves.
Import substitution should not be understood as a return to protectionist policies or as an attempt to shield domestic producers from competition. Rather, it should be viewed as part of a broader strategy to deepen Jordan’s industrial base and strengthen its productive capabilities. The objective is not to manufacture everything the country imports, but to identify those products for which Jordan possesses genuine production potential and can achieve competitive advantages.
The real opportunity lies in turning identified import gaps into productive investment, stronger industrial linkages, higher domestic value added and sustainable sources of economic growth.
Jordan’s economic challenge is not simply the size of its import bill, but rather the nature of the goods it imports and the extent to which domestic production could replace some of them. When a country imports products that could potentially be manufactured locally, it incurs more than the direct cost of those imports. It also misses opportunities to expand its productive capacity, create employment, generate higher value added, and strengthen linkages across economic sectors.
In this context, the study “An Assessment of Production Gaps and Alternatives for Import Substitution: Potential Investment Opportunities”, prepared by the Jordan Chamber of Industry, provides an important contribution to the debate on Jordan’s industrial development. Rather than focusing solely on the conventional discussion of the trade deficit, the study seeks to identify specific areas where import dependence could be transformed into viable domestic investment opportunities. Drawing on Jordan’s foreign trade data for 2025, it reveals significant differences in the scale of production gaps across various industrial sectors.
According to the study, imports of products for which no equivalent domestic production was identified amounted to approximately JD 9.048 billion. Engineering, electrical, and information technology industries accounted for the largest share, with imports valued at JD 3.851 billion, representing approximately 42.6 per cent of the total. Mining industries ranked second, at JD 1.556 billion, followed by food, provisioning, and livestock industries, at JD 1.477 billion.
These figures suggest that potential investment opportunities extend well beyond a single industrial sector. Imports in the chemicals and cosmetics industries amounted to approximately JD 524 million, while leather and garment industries accounted for JD 491 million and pharmaceutical industries and medical supplies for JD 338 million. Construction industries recorded JD 257 million, plastics and rubber industries JD 243 million, packaging, paper, and cardboard industries JD 163 million, and wood and furniture industries approximately JD 148 million.
Yet, the significance of these figures lies not only in the value of imports, but also in the specific products that account for these gaps. In engineering industries, for example, the study identifies trade gaps of approximately USD 120 million in industrial valves and fittings and USD 121 million in air pumps and compressors. These products serve as essential inputs for the energy, water, construction, and manufacturing sectors. Developing domestic production capacity in these areas could therefore strengthen local supply chains and reduce the dependence of other productive activities on imported industrial components.
The pharmaceutical and medical industries offer another important example, particularly given their strategic significance. The study identifies a trade gap of approximately USD 509 million in pharmaceutical preparations and USD 242 million in human and animal blood products used for therapeutic and diagnostic purposes. Although Jordan has an established pharmaceutical manufacturing base, these figures point to potential opportunities to expand into more specialised and technologically advanced products. Such expansion could enhance pharmaceutical security while increasing the technological content and value added of national industry.
In the food sector, the potential lies partly in strengthening the connection between agricultural production and food processing. The study highlights opportunities in frozen potato production, food processing, and the refining and packaging of vegetable oils. These activities could create stronger links between farmers and manufacturers, allowing agricultural products to be transformed into higher-value goods rather than being marketed primarily in their raw form or replaced by imported processed products.
Nevertheless, the value of imports should not be interpreted as an immediately achievable investment opportunity or as a guaranteed reduction in the trade deficit. The existence of a trade gap does not, in itself, establish that domestic production would be economically viable. Investment decisions must take account of the availability of raw materials, energy costs, capital requirements, technology, market size, and the ability of local producers to compete with imported goods. Moreover, some industries may require access to larger regional and international markets to achieve economies of scale and attain competitive production costs.
The policy priority should therefore be to move beyond identifying production gaps and towards developing a clearly defined portfolio of priority industrial investment projects. The selection of these projects should be guided by measurable economic criteria, including the level of domestic demand, the share of local inputs, expected value added, employment generation, the potential to reduce imports and expand exports, and the extent of their linkages with other sectors of the economy.
Input-output analysis and economic multipliers could add an important dimension to this process by capturing not only the direct impact of industrial investments, but also their indirect and induced effects across the wider economy. A factory producing engineering components locally, for instance, could reduce input costs for several other industries. Similarly, an investment in food processing could generate additional demand for agricultural products, packaging, storage, transportation, and logistics services. The overall economic contribution of such projects may therefore extend well beyond the output generated by the factories themselves.
Import substitution should not be understood as a return to protectionist policies or as an attempt to shield domestic producers from competition. Rather, it should be viewed as part of a broader strategy to deepen Jordan’s industrial base and strengthen its productive capabilities. The objective is not to manufacture everything the country imports, but to identify those products for which Jordan possesses genuine production potential and can achieve competitive advantages.
The real opportunity lies in turning identified import gaps into productive investment, stronger industrial linkages, higher domestic value added and sustainable sources of economic growth.
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