| |
Since the mid 1990s, the Jordanian economy has shown positive signs of recovery and has made steady progress through the implementation of rigorous and comprehensive economic reforms and restructuring programs supervised by the IMF and the World Bank. The main goal of restoring non-inflationary, sustainable growth has been accomplished, and the Jordanian economy is starting to show signs of capitalizing on export-led growth. This strong growth was led by the manufacturing, finance, insurance, real estate and business services sector, as well as the transport and communications sectors.
Under the leadership of HM King Abdullah II, Jordan has embarked on a series
of financial and judicial reforms aimed at encouraging larger involvement of
the private sector and transforming the role of Government from that of a
dominant participant in the economy to that of a regulator and ultimately
stimulator of competitive markets providing a level playing field for the
private sector to take a bigger role, as well as attracting foreign direct
investment. To this end, the Government has initiated a privatization
program aimed at freeing up tied investments and labour, inculcating
business incentives and motivation, attracting foreign direct investment,
and developing the financial markets.
The Jordanian economy is governed by the dynamics of a free market economy.
The private sector owns most of the enterprises, with the exception of the
mining industry whose revenues from the export of potash and phosphate make
it an important foreign currency generator for the Kingdom. Nevertheless,
the Jordan Phosphate Mines Company (JPMC) has been scheduled for
privatization as part of Jordan’s privatization program to generate foreign
income and boost reforms to revitalize the economy. In addition, almost half
of the government’s stake in the Arab Potash Company (APC) was sold to the
Canadian company, Potash Corporation of Saskatchewan (PCS) for a total value
of U.S.$173.3 million.
Top
Despite political instability and poor economic performance in the Middle East region, Jordan has been able to steer a path towards a sustainable and equitable economic development. A major success of the Jordanian economy is the high level of education, which helped create a large highly paid expatriate community in the Gulf, with large and reliable annual remittances and investment in Jordan of approximately over U.S.$2,000 million per annum, in addition to large capital balances abroad. Literacy in Jordan is in excess of 90 per cent., with approximately half a million university graduates, constituting about 10 per cent of the population. Jordan has 8 public universities and 23 community colleges, as well as a chain of 67 community centers. Average life expectancy is approximately 71.5 years. Jordan has a low child death rate, a large, exporting pharmaceutical industry, and is a regional medical centre serving thousands of patients annually from surrounding countries. The health sector is a major contributor to job creation, GDP and export of both goods and services, as are the tourism and export sectors.
In light of its limited natural resources and currently high unemployment
rate, Jordan is aiming to become a regional leader and internationally
recognized exporter of IT products and services, in addition to providing
other types of services.
The overall IT goals include developing an internationally competitive IT
industry in Jordan that:
-
attracts both foreign and local investment;
-
generates high value jobs; and
-
produces substantial levels of exports in the near to medium term. The
long-term goal is to position Jordan favorably within the knowledge-based
economy of the future.
Top
To achieve these aims, Jordan intends to leverage its key competitive
advantages, namely low cost labour, an excess supply of IT labour, a strong
emphasis on analytical skills in its education system which leads to
adaptability for a wide range of applications, and good private sector firm
capabilities.
The Government recognizes that achieving these goals will require the
sustained implementation of a range of actions in a number of inter-related
areas. Six strategic areas have been identified:
-
IT industry development;
-
policy and regulatory strengthening;
-
human resource development;
-
Government support;
-
capital and financing; and
-
infrastructure improvement.
Jordan has therefore embarked on a number of initiatives led by HM King
Abdullah II, who has been focusing on the development of Jordan’s economy.
Many of these initiatives were spearheaded by His Majesty’s Economic
Consultative Council (ECC), a 20-member council appointed on 13 December
1999 from both private and public sectors. The ECC’s role is to monitor the
government’s performance and boost the role of the private sector to spur
economic growth and attract investment. The Council formed several
Committees and Task Forces in order to supervise the implementation of the
First Economic Forum and to spur faster implementation measures by both the
private and public sectors.
Key initiatives pursued to date include:
-
National Social and Economic Action Plan (2004 – 2006): The Action Plan
aims to achieve and sustain a GDP growth rate of 6 per cent per annum by
2006, and to lead to growth of per capita income of 3.6 per cent by the same
year. The Government also intends to work on reducing poverty and
unemployment through enhancing qualitative investment in rural development
and introducing programs that aim to empower and enable citizens, especially
the youth and women, as well as encouraging more private investment and
upgrading the country’s infrastructure in order to create additional jobs.
-
WTO Membership: Jordan officially became the 136th WTO member on 11 April
2000. See “Foreign Relations and International Organizations — World Trade
Organizations” above.
-
Free Trade Agreements: In 2001, Jordan became the fourth country to sign a
Free Trade Agreement (FTA) with the United States. See “Foreign Relations
and International Organizations – Free Trade Agreements” above.
-
Privatization: Jordan has embarked on a privatization program. The process
of privatization has been accelerated in the 18 months up to 30 June 2004 in
order to spark private sector growth and free up public capital for other
uses. The most notable privatization has been that of Jordan Telecom, in
which France Telecom acquired a 45 per cent equity stake. See
“Privatizations” below.
-
E-Government: A task force was charged with studying the requirements of
implementing an “e-government”. A number of fast track projects selected for
their impact were identified and a senior level task force, headed by the
Minister of Information and Communications Technology was formed to manage
and oversee their implementation. A review of all existing legislation to
remove legal impediments to e-government was also recommended, including
electronic signature and electronic payments laws.
-
Education and Access: A decision was taken by the Government to review the
government educational policies and training programs. As a result,
universities are teaming up with IT industry multinationals to provide
certification programs for their students. For example, Sun Microsystems has
nominated Sumaya University to become the first authorized Academic Sun
Education Centre in the Middle East. Similar initiatives are underway
between various Jordanian universities and Cisco systems, Microsoft, Oracle
and HP. Legislation has already been passed requiring all state schools to
offer English from the first grade and computer training from the second
grade up until the last year in high school. Additionally, recognizing the
need to reach people all over the Kingdom, the Ministry of Education has
initiated a project to set up Telecommunication Access Community Centers (TACC)
in less developed communities in the Kingdom. Equipped with trained
personnel, these centers will offer Jordan’s citizens access to computers,
internet, multimedia services and other learning devices. The Government
intends that the Centers will eventually play a significant role in distance
learning.
-
Aqaba Special Economic Zone: On 1 January 2001 the Government of Jordan
established the Aqaba Special Economic Zone (ASEZ) as a self-sustaining
industrial, commercial, financial and investment centre as well as a
liberalized low tax, duty-free and multi-sector development area. ASEZ is an
industrial estate of 375 square kilometers designed to accommodate a wide
range of industries. The Government expects ASEZ to play a significant role
in attracting local and foreign investment due to the wide range of services
and facilities offered to investors. The Government believes that Aqaba’s
location as a connection point between Europe and the Far East will also
promote ASEZ. The Government anticipates that ASEZ will create 70,000 job
opportunities over the next 20 years, and attract investment exceeding
U.S.$6,000 million, with investments in infrastructure reaching U.S.$750
million.
-
The Aqaba Development Corporation (ADC): launched at the beginning of 2004
by ASEZA (The Aqaba Special Economic Zone Authority) and the Government of
Jordan, as a new private sector corporation to be the central development
body for ASEZ. Ownership of Jordan 's ports, the city's international
airport and strategic parcels of land as well as the development rights for
these assets and key infrastructure and utilities has been transferred to
ADC. ADC's objectives are to develop and manage these strategic assets of
the zone to unlock and leverage value from this asset base.
To further help promote the knowledge economy, the Government has embarked on establishing a ‘Smart Centre’ within the city of Amman (the Abdali Project) to help fill a current gap in the availability of high quality office space (smart buildings, flexible designs, etc.) and state-of-the-art infrastructure. The Government believes this will help further to attract international and regional IT companies to the new business address. Top
|
|
Overview