Interview: Ziad Fariz
What steps has the CBJ taken to align itself with the national digitisation strategy?
ZIAD FARIZ: Over the past five years the CBJ has developed and digitised many services varying from retail payments, like electronic bill payments and mobile transfer systems, to wholesale liquidity management instruments. Within these initiatives, the CBJ has focused on making these services available for both the banked and unbanked population, which includes more than 200 services such as taxes, utilities, traffic tickets, Customs and much more. In addition to leveraging on Jordan Mobile Payment (JoMoPay) for government subsidies and national aid funds, the CBJ is also working closely with NGOs supporting refugees to shift aid from cash to digital deliverance using JoMoPay.
In what ways can the Jordan Loan Guarantee Corporation (JLGC) build confidence in the small and medium-sized enterprise (SME) sector?
FARIZ: Access to finance continues to be the most critical challenge for SMEs in Jordan, in fact 70% of SMEs face difficulties in accessing financial resources, especially in their early development stages. The CBJ has created two loan guarantee funds – conventional and Islamic – to service start-ups. The innovative start-ups fund company will make direct and indirect investments, with the ultimate objective being the creation of early stage and venture capital markets. It will also support the establishment process by working with business incubators and accelerators across the country. Other new JLGC programmes include enhanced financing guarantees for minority segments, for example businesses owned by women, and for select sectors such as renewable energy, IT and tourism.
How will financial inclusion further enhance the development of Jordan’s economic landscape?
FARIZ: Around 67% of the Jordanian population has no access to financial services, and is therefore left out of the economic cycle. The first building stone of economic development is to include everyone in the sustainable productivity cycle, which is achieved by offering access to a wide spectrum of financial services like credit, savings, insurance, digital payments and transfers, and SME lending. This enables people to plan for the future, fund innovative ideas and create jobs – all while including the youth, women and refugees, among other groups, in the economic cycle, adding value to the entire value chain.
Which types of public-private partnerships (PPPs) are needed to reduce the debt-to-GDP ratio?
FARIZ: Jordan has put in place structural reforms to address imbalances in the economy, and create an attractive business environment that encourages foreign and domestic investments. Jordan graduated from its economic reform programme with the IMF in 2015 and embarked on a new one in 2016. This three-year programme aims to preserve macroeconomic stability through structural reforms to boost jobs and growth, enhance competitiveness, and foster equity, fairness, and good governance through gradual and steady fiscal consolidation, bringing public debt to safer levels.
The reform process is underpinned by a 10-year framework, Jordan 2025, a socio-economic policies blueprint the government adopted in 2015. The strategy outlines regulatory reforms to sustainably improve the business environment and support the private sector. The government issued the PPP law in 2014 to gradually reduce public debt as a percentage of GDP to safe levels. With its commitment to the fiscal consolidation programme, the government intends to maintain a prudent fiscal policy and assume a public debt strategy. Taking into consideration Jordan’s limited fiscal space, promoting an active partnership between the PPP and build-operate-transfer models provides an optimal way of enhancing national economic growth sustainably without burdening the government budget.
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