Investment review at Jordan’s Aqaba SEZ

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A new committee has been launched to build on the success of the Aqaba Special Economic Zone, the centrepiece of a long-term strategy to spread faster and more sustainable economic development to the rest of the kingdom.

 

Headed by Aqaba Special Economic Zone Authority (ASEZA) Chief Commissioner, Kamel Mahadin, the panel has been tasked with making the zone more competitive and attractive to investors. Members include representatives of both the public and private sectors, nearby communities, and the head of economic affairs at the Royal Court, Samer Asfour.

The zone was established by the government in 2001 in an effort to ensure that Aqaba – situated on the Red Sea – made fuller use of its commercial traditions and geographical advantages to become a regional centre for everything from culture and tourism, to industry and trade.

 

Identifying priorities

 

In remarks delivered on February 2, Mahadin said the new committee’s initial priority was to review current operations to see where changes could be made to more fully implement the vision of King Abdullah II, who has long taken considerable interest in ASEZA’s performance. The monarch, who recently visited the zone, has called for more cooperation to ensure heavier investment flows, prompt execution of strategic projects, greater employment opportunities and higher standards of living.

To accomplish this, Mahadin said the committee had already conducted a review of the investment landscape to determine activity levels in each sector. The goal is to identify areas that offer especially promising prospects to investors, and are likely to contribute to balanced development. The committee, he added, also emphasised the need for a thorough review of an eagerly awaited draft investment law to ensure that its components are consistent with the goals outlined by the king.

Mahadin, who chairs several other entities affiliated with the zone, said members of the panel had agreed the use of public-private partnerships could be a significant factor in achieving strategic development goals, as well as in spreading the resultant gains across a broader cross-section of the population.

In January, ASEZA highlighted similar priorities when it entered into a five-year agreement with the Jordanian Hashemite Fund for Human Development to spur local growth via several measures, including incentives for job creation and the extension of low-interest loans for entrepreneurs.

 

Zone to ease energy supply challenges

 

The zone’s centrality to national economic planning has been reinforced by a variety of events in recent years, including decisions to proceed with a nuclear power plant and a desalination facility in Aqaba. The airport is now served by more than 20 airlines, and the port complex has expanded steadily as the primary engine of local economic activity.

Indeed, the port is now set to start playing a key role in alleviating a recurring headache for the kingdom’s energy sector.

While purchases of discounted crude oil trucked in from Iraq have helped Jordan to meet its energy demands in the wake of interrupted natural gas shipments from Egypt, the deteriorating security situation in western Iraq’s restive Anbar Province has now put those supplies at risk. Negotiations with Baghdad are at an advanced stage, however, to build a new pipeline system originating in southern Iraq’s oil-rich Basra Province and terminating at Aqaba.

The link, plans for which envision twin parallel pipelines carrying oil and natural gas, as well as a spur to Zarqa, home to Jordan’s only refinery, is expected to directly generate about 3000 jobs. In addition, the project could pave the way for Aqaba to host both a new refinery and a modern export terminal designed for energy products – particularly trans-shipments of Iraqi oil to third countries.

Mahadin says ASEZA saw its earnings almost double in 2013, rising from $27m to $53m. Since inception, the zone is credited with having overseen the creation of more than 30,000 public- and private-sector jobs, secured more than $12bn in investment, and raised Aqaba’s regional and international profiles.

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