Following World War I and the dissolution of the Ottoman Empire, the UK received a mandate to govern much of the Middle East. Britain separated out a semi-autonomous region of Transjordan from Palestine in the early 1920s, and the area gained its independence in 1946; it adopted the name of Jordan in 1950. Jordan is a small Arab country with insufficient supplies of water, oil, and other natural resources. Poverty, unemployment, and inflation are fundamental problems, but King Abdallah, since assuming the throne in 1999, has undertaken some broad economic reforms in a long-term effort to improve living standards. In 2006, Jordan reduced its debt to GDP ratio significantly. The government also has liberalized the trade regime sufficiently to secure Jordan's membership in the WTO (2000), a free trade accord with the US (2001), and an association agreement with the EU (2001). These measures have helped improve productivity and have put Jordan on the foreign investment map. The main challenges facing Jordan are reducing dependence on foreign grants, reducing the budget deficit, and attracting investment to promote job creation. While pursuing economic reform and increased trade, Jordan's economy will continue to be vulnerable to external shocks and regional unrest. Without calm in the region, economic growth seems destined to stay below potential. On the positive side, however, there is huge potential in the solar energy falling on Jordan's deserts, not only for the generation of pollution-free electricity but also for such spin-offs as desalination of sea water.