Interview: Awni Al Rushoud
Can foreign companies use Jordan as a base for targeting growth markets across the Middle East?
AWNI AL RUSHOUD: Jordan has adopted a policy of building global partnerships and institutional relations that allow for free trade and market access to more than 1bn consumers in regional and international markets. Through bilateral agreements and favourable protocols with over 20 countries, Jordan is able to offer a wide range of incentives to investors. These include duty- and quota-free access to the US market through Qualifying Industrial Zones (QIZ), duty-free access to EU markets, and access to more than 17 Arab countries through GAFTA. Jordan is also a member of the Multilateral Investment Guarantee Agency (MIGA).
Furthermore, Jordan has recently signed free trade agreements with Singapore, Canada and Turkey, and is currently negotiating similar agreements with Pakistan and the Common Market of Eastern and Southern Africa. As part of Jordan’s efforts to foster economic development and enhance its investment environment, the government has created geographically demarcated, policy-favoured commercial areas, including industrial estates, free zones, and special economic zones.
In which sectors of the Jordanian economy do you see the strongest potential for foreign investors?
AL RUSHOUD: We are now promoting five key sectors: information and communications technology (ICT) and business process outsourcing (BPO), pharmaceuticals and clinical trials, health care, tourism and energy.
The main reason for promoting these sectors is that Jordan enjoys a competitive advantage among its regional neighbours – a result of existing expertise, established companies and investor-friendly legislation.
The second reason is these sectors carry an abundance of opportunities and display room for growth. For example, there remain a number of historic sites that are not often visited by or marketed to tourists. Furthermore, even well-established sites and areas are still in need of additional investment and development.
The third reason for promoting these sectors is their ability to create jobs. ICT/BPO, health care and tourism are service-based sectors and therefore can support a large number of workers. The same is true, to a lesser extent, for pharmaceuticals and energy, which can utilise Jordan’s highly educated human capital.
There is also great potential for energy and energy efficiency projects, since Jordan receives high solar irradiance levels and has a legislative environment that allows companies to propose projects directly to the Ministry of Energy. Around 54 companies have already proposed projects in renewable energy generation.
What regulatory reforms are most necessary to attract higher levels of foreign direct investment?
AL RUSHOUD: The government has implemented corrective measures over the past two years. Some of these include rectifying the Investment Promotion Law and the Private Partnership Law, which are currently pending approval by the parliament. The government is also encouraging the responsible authorities to promote further investment schemes.
Improving Jordan’s global rankings in competitiveness and doing business is also imperative. The government has developed an extensive plan to enhance the country’s ranking in areas such as the business and investment environment, fiscal policies, higher education, and research and development.
What lessons should foreign investors take away from recent turmoil in the MENA region?
AL RUSHOUD: Foreign investors should indeed consider political risks when making business decisions. However, Jordan’s political risk profile is entirely different from the profiles of our neighbouring countries. Ultimately, Jordan’s well-deserved reputation for stability, especially during these turbulent times, instils confidence in investors, who continue to look to the kingdom as a cost-competitive centre for their businesses and an access point to regional growth markets.
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