The structure and performance of manufacturing industry in Jordan

Jordan is a small developing country in the Middle East. The limitations of the market are the main problem in the course of its industrialization. However, efforts can be made to take advantage of the proximity of the country to the oil-producing countries. In addition, a rational Government policy can help in producing an appropriate industrial structure to improve performance. The structure and performance of manufacturing industry in Jordan since the late fifties is examined. For this, detailed interviews with 74 firms (including the top ten) were conducted in 1976. In Jordan competition is severely limited in some industries because one or two firms may suffice to supply the total market. In certain cases, there was no alternative to accepting regulated monopolies. However, it is argued that this control did not seem sufficient in 1965, but by 1974 market power obtained through concentration was not evident in most cases, showing that other elements were able to curb monopoly behaviour. This, however, does not suggest that all markets have become compet­itive, because certain defects in industrial structure still exist. Five performance indicators are examined: profitability, growth, efficiency, import replacement, and competitiveness in export markets. Market structure has a bearing on performance, but it is demonstrated that other factors play a part. Comparisons are made with industrial performance in some deve­loped and developing countries, including three Arab countries. certain defects in the performance of the Jordanian manufacturing industry existed, e.g. in certain cases, abnormal profits were earned; there has been little exporting to neigh­bouring countries; and many firms did not grow as they could. However, the general picture has improved, especially in recent years, when many new manufacturing firms have been established and have operated with success