Identified as a priority economic sector in the Jordan Government’s recently launched Economic Modernization Vision, its garment, textile and leather industry’s DVA or domestic value added as a share of production output is relatively high compared to most low and middle income countries with notable export-oriented companies, says a study published by Better Work Jordan.
- This combination of high level of DVA with a high rate of export growth suggests that the garment, textile and leather (GTL) sector has been able to make a substantial contribution to GDP while remaining globally competitive.
THE RESEARCH: The study—National Economic Contribution of Jordan’s Garment, Textile and Leather Industry—was jointly authored by Thoraya El-Rayyes (London School of Economics) and Santacruz Banacloche (European Commission, Joint Research Centre) under the auspices of the International Labour Organization (ILO) and International Finance Corporation (IFC).
- It comes as part of Better Work Jordan (BWJ) continuous cooperation and support to Jordan Chamber of Industry (JCI) towards enhancing the garment sector competitiveness and contribution from the JCI.
THE FINDINGS: This research brief provides an overview of the industry's contribution to Jordan’s economy, highlighting strengths and challenges faced by the sector and the implications for national economic and employment policies.
- The analysis focuses on several key aspects of the sector, including its domestic value added, linkages to other economic sectors in Jordan and its direct and indirect role in employment creation.
- The GTL industry accounts for 7.7% of Jordan’s manufacturing GDP and 19.8% of its total goods exports.
- The DVA as a share of production output stood at 41.7% in 2018, which is the most recent year for which statistics are available.
- The sector’s returns on capital are estimated to comprise just over half of its DVA.
- Payments to labour income measure approximately 40%, and taxes accrued to the government account for around 5% of the sector’s DVA.
- Roughly one-third of payments to labour are remitted by migrant workers to their home countries.
- Jordan’s GTL industry indirectly created around 12,400 jobs in 2018.
- Jordan’s GTL industry has expanded dramatically since 1996, when implementation of a series of free trade agreements between Jordan and the United States began, granting Jordan preferential access to the US market.
- The industry’s exports have increased from $1.12 billion in 2012 to over $2.26 billion in 2022.
