Interview: Prime Minister Hani Al Mulki
How will the country be utilising the financial support coming from the Jordan Investment Fund to maximise benefits for the kingdom?
PRIME MINISTER HANI AL MULKI: The investment fund regulates the rights of ownership, management and development for major infrastructure projects in order to secure funding. The fund allows sovereign funds, banks, Arab and foreign sovereign wealth funds, and private investment companies to invest in the projects included in this fund that yield benefits to the national economy.
The Jordan Investment Fund Law includes numerous incentives for sovereign funds and companies to invest in Jordan in order to alleviate the burden of government spending on infrastructure projects, create jobs and stimulate growth in the national economy. The investment fund received tax and Customs exemptions – in addition to any other fees or future taxes the government might impose – and obliged the fund’s board to contribute a certain amount of money to the investment fund as well. The aim of the fund is to focus on major projects in the kingdom’s economic development strategy and to achieve the goals laid out in the Jordan 2025 document. Some of the projects that fall under its umbrella include the national railway, the electrical connectivity grid with Saudi Arabia, the transport of crude oil and petroleum products to oil refineries and sites of consumption or storage locations, and the development of infrastructure in the holy cities of Makkah and Medina. The fund will also be overseeing projects in the governorate of Aqaba.
To what extent is turning donors into investors a priority for your government?
AL MULKI: Jordan is counting on donor countries and UN agencies to follow up on the commitments made at the London Conference on Syria and to provide the necessary support to enable the kingdom to implement the Jordan Syrian Refugee Response Plan 2016-18. Turning donors into investors is a top priority in order to enable Jordan to overcome the challenges and consequences resulting from the Syrian crisis through the financing of projects contained within the country’s response plan. Donors will be supporting efforts to improve Jordan’s investment climate, attract investors, reform the country’s labour market and grant access to the Syrian labour force to contribute to economic growth.
In light of the London Conference on Syria, how is the kingdom shaping its foreign direct investment (FDI) strategy and focusing on job creation?
AL MULKI: The refugee influx has resulted in growing pressure on Jordan’s infrastructure and resources, including the country’s economy and social fabric. The effects of the Syrian refugee crisis range from a fall in average wage levels to fewer employment opportunities, harsher working conditions, rising rates of child labour and the expansion of the informal labour market. In light of the London Conference and the Jordan Compact, the Jordan Investment Commission will be tweaking its FDI strategy to include sectors that are labour intensive. These sectors are agriculture, textiles, manufacturing, pharmaceuticals and call centres. It will be directing these investments to the 18 public and private development zones and industrial estates designed by the EU with relaxed rules of origin.
The proposed government measures could provide job opportunities for Syrians in the coming years through new investments. The simplification of the rules of origin procedures will facilitate the entry of Jordanian goods into the European market. The new rules require that in the first two years Syrian refugees form at least 15% of the workforce in those Jordanian factories wishing to export to Europe. This figure will then increase to 25% from the beginning of the third year in the designated development zones. Outside of the zones, sectors with low Jordanian participation and a high ratio of foreign workers – plus a high degree of skills match – could provide more job opportunities.
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