Jordan: Bid to boost growth in ICT

JordanICT

Economic News

23 May 2012
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A regional cable network (RCN) earmarked for completion later this year, together with a new, national five-year strategy for the information and communications technology (ICT) sector, will act as the key drivers in Jordan’s efforts to reinvigorate growth levels in the industry.

Jordan’s ICT sector has grown around 25% per year over the past decade, and its contribution to the economy has increased from around 2% of GDP in 2000 to 14% at the end of 2011.

But with growth slowing somewhat in the past couple of years, the government hopes that high-speed links to the international grid will shore up its plans to boost investment in the industry and help the kingdom reassert its position as a major regional ICT hub.

Jordan has faced a number of challenges in driving ICT growth, including the challenge of keeping the country’s communications and technology infrastructure on par with international industry developments.

The latest annual Global Information Technology Report, published by the World Economic Forum (WEF), gave the Kingdom an impressive ninth-place ranking out of 142 countries for ICT affordability, but highlighted measures that could be undertaken to further strengthen infrastructure for the industry, including accessing a wider international internet bandwidth.

Bolstered by accelerated penetration of internet usage and the progress made in its e-government projects, Jordan ranked 47th on the WEF’s Networked Readiness Index, which grades economies on their ICT usage, acceptance and efficiency.

Abed Shamlawi, the CEO of Int@j, the ICT Association of Jordan, which represents some 450 firms operating in the sector, agreed that improvements could be made to the Kingdom’s ICT industry, especially in expanding its reach across the economy, but said there were many positives to be taken from the report.

“There is strong latent demand for ICT solutions among Jordanian financial institutions, hospitals, and education institutions and universities, many of which are seeking to upgrade their services,” Shamlawi told OBG. “If policymakers and local ICT companies can work together to encourage technological adoption in the business community, the country would not only see more ICT sector revenue, but also an increase in national competitiveness and productivity.”

The RCN, which is due to be completed in the third quarter of this year, should boost Jordan’s connectivity to the rest of the region and address some of the issues raised in the WEF’s report by reinforcing its links to Syria, Saudi Arabia, the UAE and, through Turkey, Europe.

Access to the 7750-km round-trip route is expected to be a key component in Jordan’s efforts to attract investment by helping it to overcome hurdles such as domestic disruptions to internet services, although there are concerns that the problems in neighbouring Syria could affect the Kingdom’s access to external high-speed links. Should the crisis across the border lead to any significant break in the line, patching into grids circumventing Syria is an option for Jordan, although this would inevitably reduce the efficiencies the RCN is designed to offer.

At home, the government’s new strategy for ICT, which was announced in early April, will focus on boosting employment and attracting investment, according to the Ministry of Information and Communication Technology (MICT). Haitham Qaisi, a spokesman for the MICT, said the ministry would be holding a series of consultations with private sector representatives as it looks to define the strategy more sharply and boost the number of Jordanians employed in ICT-related activities, which currently stands at 80,000.

Qaisi acknowledged that although Jordan’s previous five-year plan for the sector produced some notable achievements, including an increase in internet penetration rates to over 50% by the end of 2011, the goals set for investment and job creation had not been reached, partly, he said, due to the global economic downturn that slowed the flow of capital into the industry.

While external factors could have an impact on the rate of expansion of Jordan’s ICT industry, the government’s plans to work closely with businesses operating in the field should help lay the foundations for boosting growth. A drive to improve infrastructure and increase the integration of ICT throughout the economy are expected to strengthen the sector and pave the way for the Kingdom to reap the benefits of a faster, stronger and more productive flow of information.

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