Jordan's tourist and phosphate industry is booming. But it still has financial problems, says Nick Hood.

The Middle East is divided into the have-oils and the have-nots. The other delineator is proximity to Palestine and Iraq.  Jordan lacks oil, and has the misfortune to border both the troubled land so viciously disputed by the Israelis and the Palestinians, and the devastated former home turf of Saddam Hussein.

But arriving in Amman is to experience a country with rising affluence, based on a thriving export trade in organic phosphates and a burgeoning tourist trade. There is abundant land, facilitating the development of prosperous suburbs with magnificent family villas - often housing three generations of the same family.
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Travelling is made by easy by good roads, notably the King’s Highway which follows part of the iconic Silk Route. Side turnings take hordes of visitors to exquisite ancient sites - most prominently to the splendour of Petra, truly one of the great travel experiences. Tourism is up 35% from a year ago, despite the persistent attentions of Bedouin urchins with their fake silver coins and trinkets, and herds of sway-backed, braying camels.

The Jordanian economy has seen some impact from the global recession. Growth has slowed from around 6% previously to just 2.8% in 2009. The construction sector has done best of all, surging by 12.8% on the back of a building boom - especially noticeable in Amman itself.

The situation is the result of a fascinating two-way pull between competing externally-imposed influences. The first is the negative drag of an impoverished 400,000-strong Palestinian refugee community, much of it still trapped economically in camps after over 50 years (although the original tents were replaced many years ago by low-grade housing). Much government effort and resource goes into improving the lot of these poor souls.

But ironically, the Iraq wars have brought unexpected financial benefits to Jordan: wealthy Iraqis have been fleeing to this safe haven, bringing with them hundreds of millions of dollars. The only downside has been rampant property inflation, as these non price-sensitive immigrants invested in land and palatial houses. Building land in one developing suburb of Amman has soared in ten years from $10 a square metre to over $250. Set against an average income per capita of only $5,000, this is fast becoming a major issue.

Another focus for the government is educating the Bedouins and improving their living standards - much as the policy is sternly resisted by many, and flies in the face of romantic notions of their nomadic existence. The establishment of fixed borders in the region has restricted free movement, and their herds of sheep and goats are now wreaking havoc with delicate eco-systems, so something has to be done.

Despite the many financial positives - not least a rising stock market up 2.1% last week - unemployment is still stubbornly high at 15%, and general inflation is running at nearly 16%. Another troublesome issue within the region is the paradox that Jordan is very much a Western-facing regime surrounded by militantly Arabic states. This makes for uncomfortable political positioning.

There are many challenges ahead for Jordan. It will decades before the Bedouin finally abandon their tents, camels and Taliban-like motor scooters for houses and cars, or for the 1m refugees to be fully integrated (or returned to their origins if they wish). But if hard work, enthusiasm and commitment can deliver progress, then eventually it will truly become the Promised Land.