March 08, 2021

Preface

The COVID-19 pandemic has triggered one of the worst economic crises since the Great Depression, imposing severe economic and social challenges not only for Jordan but for the entire globe.
Although global economic activity is growing again, it is not likely that we would return to business as usual in the foreseeable future. The pandemic has caused a severe loss of life, is tipping millions into extreme poverty, and is expected to inflict lasting scars that push activity and income levels well below their pre-pandemic trends for a prolonged period of time.
By early April 2020, about 150 countries had closed all schools and imposed cancellation of gatherings and events, and more than 80 countries had closed all workplaces to contain the outbreak of the virus. Travel restrictions were imposed on a large scale, and mandatory lockdowns, along with social distancing, were imposed. Consequently, economic activity contracted dramatically on a global scale, accompanied by fluctuations in the financial markets, and sharp declines in oil prices and industrial minerals.
The COVID-19 global recession and economic policy-response raised concerns regarding rising debts in emerging markets and developing economies (EMDEs). However, even prior to the pandemic, a rapid buildup in these economies referred to as the “fourth wave” of debt accumulation had also raised concerns about debt sustainability and the possibility of a financial crisis. 
The COVID-19 pandemic has caused deep output losses of approximately 5% in 2020 across the Middle East and North Africa (MENA). The regional economy in the MENA is projected to recover only modestly in 2021, expanding by 2.1%, a figure that is weaker than previously expected, and to accelerate to 3.1% in 2022.
Domestic political tensions and geopolitical strains remain a risk to growth and undermine greater trade integration. On the other hand, geopolitical tensions have eased in some respects, including the normalization of relations between Israel and some GCC countries. Tensions between Iran and the United States continue to rise. Political uncertainty is high in several MENA economies (Lebanon, Tunisia, and the Republic of Yemen). Ceasefire agreements in Libya and the Republic of Yemen provide an opportunity to improve regional security and decrease mounting domestic food insecurity. In the long term, failure to improve political stability will be detrimental to economic growth.
Progress on the implementation of structural reforms need to be maintained, especially in some oil-importing countries such as Jordan. It is unclear whether the pandemic will help accelerate these reforms or rather hold them back as policy priorities shift. Moreover, while recent measures have helped mitigate the collapse in financial outputs, they will need to be managed and withdrawn carefully to avoid paving way for future instability. Changes in financing conditions pose additional risks to economies with large current account deficits but low FDI inflows. In some economies such as Jordan, urgent balance of payment needs in 2020 have already resulted in rapid financial assistance from the IMF.
These circumstances have necessitated the Center for Strategic Studies (CSS) at the University of Jordan to adopt effective initiatives towards supporting policy and decision makers.
CSS is undertaking concrete steps towards improving and strengthening its analytical and research capabilities. Thus, adding the socio-economic portfolio to its core mandate will add to the center's key works of qualitative research, and hence the launch of its Strategic Economic Policy Analysis Unit (SEPAU).
The SEPAU produced this study, named “The Economy of Jordan: Post-Pandemic Scenarios”, with the aim of providing an early warning structure to prevent chronic economic and social deficits that could last for many years amid and post-COVID-19 era.
Since its establishment in the 80’s of the last century, the CSS has been a leading institution in assessing and designing evidence-based policy interventions. It is a center for research, analysis and evaluation of public policy; which continues to be recognized as MENA’s top Center for Excellence since 2016, according to the Global Go to Think Tank index (last updated in June 2020) as part of the Think Tanks and Civil Societies Program (TTCSP) program of the University of Pennsylvania. This achievement was realized after the constant efforts that led to ranking CSS first in the years 2016, 2017 and 2018 among 507 think tanks across the MENA region.


Director, Center for Strategic Studies (CSS)
University of Jordan 
Prof. Zaid Eyadat