JSF Officially Launches the Jordan Prosperity Index

The Jordan Strategy Forum officially launched the Jordan Prosperity Index (JPI), which is the first of its kind at the national level. The JPI attempts to capture the state of well-being of Jordanians from an economic, environmental, and social perspective. This initiative primarily aims to help policy makers and stakeholders in tracing the Kingdom’s performance in the areas indicated, as well as evaluate the impact of internal and external factors and identify policies needed for improvement.

Through a multi-dimensional lens, this measure provides a holistic approach to assessing the well-being of the Jordanian society and measuring the quality of life in the country. The JPI comprises of three main pillars, which are perceived as the cornerstones of prosperity. These include: Income, Living Environment and Human Capital Development. The index measures developments along these three pillars between the years of 2007 and 2014, in order to trace changes in overall-wellbeing in Jordan.

As for structure, each of the three main pillars incorporates a number of sub-pillars that evaluate Jordan’s performance in a specific area. Whereas, each sub-pillar comprises a number of indicators that aggregately reflect Jordan’s performance along the sub-pillar, and main pillar thereafter.  The sub-pillars incorporated under Income are: Macro-economy, Investment, Income Distribution and Trade. Whereas, the Human Capital Development pillar comprises of: Labor-market, Education & Innovation, Healthcare, Gender and Leisure. Further, the Living Environment pillar measures the largest number of indicators as it encompasses: Environment, Energy, Transport, Infrastructure, Water, Private Sector Governance, Public Sector Governance, Democracy and Safety.

Overall, the JPI results reflect a general improvement in Jordan’s performance along the Living Environment pillar, in addition to a stable performance along the Human Capital Development pillar and a decline in the results of the Income pillar. For the construction of the index, 2007 was used as a base year and was allocated 100 points for overall prosperity, whilst each pillar was also given 100.0 points. Prosperity had reached its highest level in 2008 as it reached 103.3 points, while its lowest level was in 2012 at 98.7 points.

In 2014, overall prosperity hit 100 points, maintaining the same level in 2013. The Living Environment Pillar, settled at 106.7 points in 2014, compared with 107.1 points in 2013. In addition to a small decrease reflected through the Human Capital Development sub-pillar, which dropped by 1.0 points in 2014, reaching 99.6 points. Divergently, the income pillar rose by 2.1 points in 2014 as compared to the year before, to reach 94.0 points.   

To analyze, The Living Environment Pillar, settled at 106.7 points in 2014, compared with 107.1 points in 2013. Whereas, The Human Capital Development sub-pillar, which dropped by 1.0 points in 2014, reaching 99.6 points. The income pillar, however, rose by 2.1 points in 2014 as compared to the year before, to reach 94.0 points.

Over 120 economists, decision makers, journalists and private sector representatives attended the JPI launch event, which was held on Thursday, 24/03/2016 with a kind sponsorship from the Housing Bank for Trade and Finance.

Dr. Omar Al Razzaz; the Chairman at Jordan Strategy Forum began his opening remarks by welcoming attendees and speakers. He also expressed the importance of developing an index of the sort in order to raise the level of academic and scientific research in Jordan, as well as enrich the standard approach to policy making through solid evidence. Al Razzaz added that the JPI is the first of its kind at the national and regional level, and the premise behind its development is to scientifically guide decision-making at different levels.

Dr. Al Razzaz added that the Forum embarked on the construction of the JPI after many scientists and academics had criticized GDP as being merely a quantitative indicator and does not capture numerous factors that holistically depict overall wellbeing. Many scientists have also pointed out that economic growth may not necessarily lead to prosperity, which necessitates the development of a quantitative and qualitative index that measures progression in the standards of living beyond the lens of GDP. Al Razzaz also stated that the forum was not able to prepare an index at the governorate level due to the lack of necessary data.  

Dr. Al Razzaz continued by saying that the index can assist decision makers in tracking changes in  the standards of living in the Kingdom, which facilitates the evaluation of internal and external factors, and helps undertake decisions that would advance the level of prosperity for citizens.

Ms. Eman Al’araj- Senior Researcher at JSF delineated the methodology adopted in the development of the index, explaining that the indicators comprising the JPI were chosen based on an extensive literature review, as well as a review of local and international indices. She also explained that the data set utilized for the purposes of the index is derived from official local and international sources. Al’araj added that the structure of the index allows for different levels of analysis, as every main pillar incorporates a number of sub-pillars that asses specific aspects of living in the country. She further explained that Jordan’s performance along the indicators chosen for the JPI was traced from 2007 up until 2014, in order to identify the different internal and external factors that have influenced overall prosperity in the Kingdom.

Following opening statements, a panel discussion was held and moderated by Ms. Hala Zawati- the CEO at JSF, during which economists and experts expressed their opinions of the index and suggested how the JPI could be utilized in guiding policy making at the national level. Ms. Zawati expressed that the Jordan Strategy Forum had worked on the development of this index hoping that it would shed light on Jordan’s performance in different realms, and the ways in which it influences the lives of Jordanian citizens. Ms. Zawati added that the JPI shall contribute to understanding the reasons behind improving or declining levels of overall well-being in the country, and thereafter addressing these throughout policy making. She further emphasized the importance of raising social awareness on all issues that are covered by the JPI’s indicators, as this would, with the help of the media, facilitate public dialogue on various issues.

From his part, H.E Dr. Jawad Al Anani- member of the upper house thanked JSF for sharing the methodology and details of the indicators used in the construction of the Jordan Prosperity Index with him prior to its release. He added that the mathematical approach utilized is solid and clear, which makes the results of the index in line with what is happening on the ground. Dr. Al Anani explained that the Jordan Prosperity Index is comprehensive in the sense that it covers numerous areas that Gross Domestic Product fails to incorporate, particularly as it pertains to inflation, income distribution, education and healthcare. He also stated that the results of the index settled at exactly 100 points in 2014, which is the same level it began with in 2007, and in spite of the fluctuations over the 7 years it captures, the index had returned to the base point, which necessitates continuous reform initiatives that shall push prosperity in the country. Dr. Al Anani further expressed the importance of other neighboring countries undertaking the same initiative as Jordan and developing similar indices, which would in return allow the Kingdom to compare its performance against other countries.

Further, Dr. Zu’bi Al Z’ubi- Dean of the Business School at the University of Jordan greeted JSF for its constant efforts, particularly in launching such an initiative which provides an innovative measure to assess the standards of living for Jordanian citizens. He added that the Jordan Prosperity Index is considered a wealth of information aggregated in one resource, which will contribute to facilitating academic and scientific research in the Kindgom. He continued saying that the index guide decision making through evidence-based research.

Wheares, Ms. Juma Ghuneimat-Editor in Chief of Al Ghad Newspaper reiterated the importance of the Jordan Prosperity Index in promoting active dialogue with Jordanian citizens and spreading awareness around the various topics that the index covers. She also indicated that the noticeable decline in the Income pillar is attributed to the widening budget deficit, increasing public debt and the decline in investment levels in the country. She added that although the results of the index settled at 100.0 points in 2014, we shall read into the details of the JPI, so as to accurately analyze changes in the standards of living of Jordanian citizens. Ms. Ghneimat emphasized the importance of looking into the sub-pillar related to Gender, which witnessed a noticeable decline over the past few years, due to dropping female labor force participation rates and larger gender pay gap ratios. This makes gender issues an apparent hurdle to prosperity in the Kingdom and bid influence to the living standards of Jordanian citizens.

Dr. Omar Al Razzaz ended the event by expressing the pride of JSF in launching the Jordan Strategy Forum, hoping that it will be used in a way that serves the national interest. The event included a Q&A session, during which Dr. Ahmad Attiga, Director of the International Finance Corporation in Jordan stressed the importance of reading into the results of the Living Environment pillar, as it speaks to delivering services to the Jordanian citizen. He added that improvements along this pillar reflect positively, particularly in light of the difficult economic and political situation in the region.

It is worth mentioning that, the Jordan Strategy Forum is a non-for-profit organization, which represents a group of Jordanian private sector companies that are proactively engaged in promoting Jordan’s economic growth. JSF’s members are active private sector institutions, who play an integral role in public dialogue over economic and social issues. The Jordan Strategy Forum promotes a strong Jordanian Private Sector that is profitable, employs Jordanians, pays taxes, active in Corporate Social Responsibility (CSR) and supports comprehensive economic growth in Jordan. 

JSF also offers a unique opportunity for its members to engage in evidence- based debate with the public sector and links them with decision-makers, in order to increase awareness, strengthen the future of the Jordanian economy, apply best practices and encourage private sector involvement in the decision-making process.

To View the Report:

Jordan Prosperity Index Booklet

Jordan Prosperity Index Full Report

Vedio of The Jordan Prosperity Index Launch