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Overcoming high energy costs

Sep 04,2019 - Last updated at Sep 04,2019

There is a glimmer of hope at last for the economy of the country, as exports have begun to increase. Prime Minister Omar Razzaz noted this increase as an indicator of where the national economy is heading.

At a meeting held on Monday with the boards of directors of industrial chambers at the Amman Chamber of Industry (ACI), Razzaz hailed this increase of exports of industrial goods as a solid indicator that industrial production in Jordan is recovering.

ACI and Jordan Chamber of Industry (JCI) President Fathi Jaghbir warned, however, that the cost of production of industrial goods remains high, and constitutes a "nightmare" that should be overcome if Jordan is to increase industrial production at costs that will promote their export.

The culprit, it turns out, is the prohibitive energy costs that amount to 40 per cent of the total production costs. As long as oil prices remain high for Jordan, its industrial production at competitive costs will suffer.

Does this mean industrial production in Jordan is doomed as long as energy costs remain high? While Jordan may not be able to lower its energy costs because it is dependent on international sources of oil, it can still lower the energy bill from 40 per cent of industrial production to 30 per cent by applying a more efficient use of electricity, including the increased reliance on solar and wind energy sources.

Introducing and applying a more technology-advanced and cost-effective energy machinery for example could lower production costs in Jordan and render our industrial exports more competitive. As the saying goes, where there is a will there is a way to surmount the high energy costs in the country.

Jordan must never give up on its industrial production and must instead persevere in the search for effective ways to lower its dependence on fossil fuel energy for its industrial production. Other countries have done it, and so can we.

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