International Conference on the Socio-Economic Dimensions of the Syrian Conflict:

Impact of Syrian Crisis on Jordan

Yusuf Mansur, PhD4 July 2013

1

₋Introduction₋Estimated Costs₋FDI₋Foreign Grants₋Remittances₋Unemployment₋Trade Balance₋Tourism Revenues₋Real Estate Trading ₋Political Impact₋Real GDP Growth ₋The Score Card

Outline:

3

Introduction• Jordan Population: Almost 7 million, with 850,000

living overseas;• Registered Syrian Refugees 550,000 (5 March 2011

until now); Zaatari Camp has 178,000 refugees, Mrajeeb Al-Fhood Camp has 4,600 refugees;• 450,000 arrived during 2006-2011• UN officials expect the number of refugees to

surpass 1.3 million by the end of this year

Costs???

4

Estimated CostsCost of hosting Syrian refugees exceeded JD 590 m in 18 months. Cost in 2nd half of 2011 reached JD 140 m, while in the first 11 months of 2012 the cost was JD450 m

• Cost of hosting one refugee is estimated at JD2,500 a year• More than 29,000 Syrian children joined public schools

between 2011 and 2012, the cost to the Kingdom was over JD14 m

• Cost of medical care provided to refugees was around JD24.2m• Cost of providing Syrians with subsidized energy products is

over JD51 m• Cost of security and civil defense services is JD 49 m• Cost of infrastructural services to refugees is JD 25 m• 38,000 jobs were given to Syrian refugees

Source: Study by the Economic and Social Council, Jordan

Other impacts????

4

2005 2006 2007 2008 2009 2010 2011 20120.00

500.00

1,000.00

1,500.00

2,000.00

2,500.00

3,000.00

-40.00%

-30.00%

-20.00%

-10.00%

0.00%

10.00%

20.00%

30.00%

1,984

2,513

1,8592,006

1,713

1,172

1,046

996

27%

-26%

8%

-15%

-32%

-11% -5%

FDI (JD millions) FDI (%)

Foreign Direct Investment (2005-2012)

• Jan-May 2013, Syrians came second after Jordanians in terms of registered capital, followed by Iraqi nationals

• It is estimated the Syrian investments in Jordan will reach US$1 bn• A total of 388 firms registered in Jordan in 2012, up from 113 in 2011

6

Foreign Grants and Loans (2000-2012)

Jordan has been increasingly receiving aid but not simply due to refugees

Year Grants Loans Total2000 260.54 217.36 477.92001 158.59 167.8 326.42002 333.18 89.208 422.42003 804.78 250.21 10552004 335.59 100.18 435.82005 332.9 121.07 4542006 343.66 134.24 477.92007 332.76 148.68 481.42008 509.05 296.3 805.42009 494.08 479.21 973.3

2010 553.79 248.76 802.62011 499.12 20.065 519.22012 1493.2 667.15 2160

Aid in JD millions

3

2005 2006 2007 2008 2009 2010 2011 20120

500

1000

1500

2000

2500

-10.00%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

1,326

1,532

2,123

2,242

2,214

2,247

2,1522,230

3%

15%

39%

6%

-1%

1%

-4% 4%

Remittance Receipts (million JD)Remittances Growth Rate(%)

Remittances (2005-2012)

Remittances increased in 2012 after a lull in 2011

5

Unemployment (2000-2012)

Unemployment did not increase in 2012, unemployment in 1st Qtr 2013 was 12.8%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20124.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

13.714.7

15.3

14.4 14.7

14.814.1

13.1 12.7 12.9 12.5 12.912.2

Unemployment Rate (%)

6

Trade Balance (2005-2012)

2005 2006 2007 2008 2009 2010 2011 2012

-8000

-7000

-6000

-5000

-4000

-3000

-2000

-1000

0

-20.00%

-10.00%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

-3,556

-3,585

-4,574

-5,084

-4,449-4,824

-6,262 -7,449

48%

1%

28%

11%

-13%

8%

30%

19%

Trade Balance net million JD Trade Balance (%)

Trade balance as % of GDP and in JD million

40% of goods were transported via Syria; Iraq as an alternative route was considered

Increased shipping through Aqaba instead of Tartous resulted

7

Tourism Revenues

Year Tourism Revenues

2011 US$ 3 bn

2012 US$3.5 bn, a 15.3 % increase

2013 (first 5 months)

US$1.34 bn, a 3.5% decline from same period 2012

Some of the increase in 2012 was due to:1. Libyan medical tourism;2. Arab tourists staying in Jordan instead of going to competitor

tourism destinations such as Syria and Lebanon; and 3. Syrian long term visitors

11

• Real estate trading in Jordan reached about JD2.75 billion during the first five months of the year 2013, a 30% increase compared with the same period last year

• Sales of properties by non-Jordanians dropped by 8% during the first 5 months of 2013, compared with the same period of 2012: JD113.3 m in apartments and JD 59.9 m in land

• Non-Jordanian investors ( 1st five months 2013) in real state were:

Real Estate Trading

Rank Nationality % JD Million

1 Iraqis 53 91.5

2 Saudis 15 26.1

3 US 5.4 9.3

4 Syrians 4.7 8.1

Political Impact

• Reduced Demonstrations

• Lowered expectations from reform

• Return to slow if any political and economic

reform

• IMF reform programme took off

9

2

2005 2006 2007 2008 2009 2010 2011 20120.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

8% 8% 8%

7%

5%

2% 3% 3%

Real GDP Growth (%)

Real GDP Growth (2005-2012)

Decreased growth started before Arab spring

The Score Card

10

Factor + - Comment

Estimated Costs X

FDI X

Foreign aid X

Remittances - - Ambiguous

Unemployment X

Trade Balance - - Oil/energy is a heavy factor

Tourism Revenues X

Real Estate Trading X

Political Impact/Stability X

Real GDP Growth X

Total 6 2 Mostly positive

In Summary

15

Conclusion:1. Situation is still evolving vis. Jordan2. Plans must be put in place to make the refugees

productive and benefit the economy3. Aid agencies need to view integration not

incarceration4. Politicians must take care not to demonize

refugees or make them the source of all economic ills

16

Thank You