The boom of the Jordanian economy after 1973 lasted till 1982. Then unemployment increased sharply, while imported labour had replaced Jordanian labour, because Jordanians preferred to work in the Gulf countries. The article analyzes the factors underlying the economic crisis after 1982. The budget deficits, the saving gaps and the balance of payments deficits are analyzed over a period of 25 years to gain insight in the development of the crisis. Subsequently alternative adjustment policies are recommended to avoid unemployment and the well known social costs of structural adjustment.
