Economic Boom with an Environmental Bust?

In a report by the World Bank, the economic cost of environmental degradation in Jordan was estimated to be 3.1% of GDP annually, resulting in the loss of 205 million dinars (US $289 million) in five sectors.

The most significant impact was water pollution. As water is already scarce in Jordan (due to a lack of aquifers and the rapidly receding Jordan River), the cost of water pollution is placed at 0.71-1.24% of Jordan's 2005 GDP. The damage of air pollution is placed at a cost of 0.69% of GDP, while the cost of land degradation (as a result of improper agricultural practices) is placed at 0.46% of GDP. The cost of coastal degradation in Aqaba, the Jordanian port city on the Red Sea, is placed at 0.09% of GDP.

Despite these environment-based economic set backs, Jordan has seen a steady growth of GDP behind its growing textile sector in the Qualified Industrial Zones. At first glance, many would see the increased focus on manufacturing as the leading cause in this economic-environmental problem. Would this mean that Jordan's new cash cow is costing it 3.1% of GDP while simultaneously encouraging growth?

While the increased focus on manufacturing has created a certain amount of air pollution, it isn’t Jordan's biggest culprit. It is the agricultural sector, which accounts for a mere 2-3% of Jordan's GDP, that has done most of the damage to water resources. Poor irrigation has led to a run-off of fertilizer and other chemicals into Jordan's rare fresh water resources. Poor farming methods have further caused costly land degradation.

So would moving Jordan toward its comparative advantage, textiles and other manufactured goods, also move it away from costly environmental degradation? Doubtful. But as it stands now, the biggest obstacle to Jordan's environmental well-being isn’t the rapidly growing modern factories, but agricultural practices that have existed for hundreds if not thousands of years.