| COUNTRY PERSPECTIVES
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JORDAN |
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Business opportunities & territorial marketing |
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Introduction |
Although major inflows have gone mainly to banking, retailing, mining, telecommunications and water treatment and desalination (the US$ 125 million Zara Ma’in Water Supply project and a US$ 167 million BOT contract for the construction of a wastewater treatment plant at As-Samra), even more promising opportunities are in the pipeline, notably in the framework of the privatisation agenda (postal services, electricity companies GEGCO, EDCO & IDECO, the Zarqa oil refinery, Royal Jordanian Airlines) as well as the BOO (future power station with combined cycle in Amman) and BOT projects (Dead Sea and Red Sea channels, expansion of the Queen Alia Airport, the Amman-Zarqa Light Railway project).
Thanks to multiple bilateral agreements, Jordan has become one of the most open economies. Setting up business in Jordan offers prospects not only for expansion on the local market, but also to neighbouring countries, thanks to re-exporting platforms. Jordanian authorities are also encouraging investments by promoting special conditions for foreign investors at the 13 special economic zones (QIZ). Launching of the QIZ has met with real success despite suppression of textile quotas on 1 January 2005, with more than US$ 82 million invested in 2005 compared to US$ 54 million in 2004. Since 1997, there have been more than US$ 600 million in investments and nearly 30,000 new jobs, including some 10,000 expatriates. |
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Mining and extraction industries |
The mining and mineral sector gives Jordan a major role on the world stage, representing considerable potential for growth. The Kingdom is the fifth world producer and exporter of potash and the fifth world producer/fourth world exporter of phosphates. Fertilisers (made from phosphate rock and potash) are the second most important export commodity, and cement production is the fourth largest industry. The mining sector is the country’s leading industrial activity (representing 60 percent in terms of value) and the third source of income. It contributed 10.8 percent to GDP in 2004 (up from 9.6 percent in 2003), generating total revenues of JD 876 million and representing 24.6 percent of the country’s exports. Mining projects are governed by the investment promotion law of 1995. |
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Construction and public works |
Since 2003, the market for construction and public works has been enjoying a remarkable boom. A buoyant real estate market, expanding tourism sector, and pro-business reforms are behind a surge in investor confidence in Jordan that has triggered a wave of major initiatives. Both domestic private sector investment and foreign demand underpin this favourable development. The war in Iraq in 2004 was behind the arrival of new Arab and foreign investors and the World Economic Forum (WEF) held at the Dead Sea in May 2005 ended with the signature of several agreements for implementation of major building projects in Jordan. The country’s political stability, existing infrastructure, strong services sector, and lowered banking interest rates have supported this growth. |
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Infrastructure and transport |
A number of large-scale real estate projects have been launched :
- the Al-Abdali Urban Regeneration Project
- the Zarqa Urban Development project (2500 ha)
- the Royal Metropolis project
The Ministry of Transport launched a call for tenders and pre-selected six candidates for construction of a railway network in the framework of the long-term (20-25 years) “Master Plan for Railways in Jordan”. Many initiatives are awaiting the results of the study. Over the long term, the Jordanian government intends to connect Jordan’s rail network to Europe via Syria and Turkey, making freight traffic possible. |
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Textile and clothing industries |
The textile and clothing industry is considered one of Jordan’s main industrial sectors, accounting for more than 30 percent of Jordan’s exports (US$ 708 million in 2004) and employing more than 55,000 people. Jordan’s success story in the textile and apparel industry is based on creation of new industrial zones, partnership agreements with the European Union and the United States, the existence of a qualified labour force and Jordan’s exceptional geographic location. |
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Tourism |
Jordan, with its exceptional historical and cultural heritage, sees the potential of tourism in terms of its being a major source of foreign currency earnings. Today, the tourism sector is one of the country’s four largest sources of income (along with remittances from Jordanian expatriates, international assistance and the mining sector). It generated US$ 864 million in revenues in 2004 (7.5 percent of GDP) and US$ 1.5 billion in 2005 (10 percent of GDP). Since signature of the peace agreements with Israel in 1994, the Jordanian government has given priority to development of tourism in order to exploit the resources of its archaeological and tourist sites (Petra, Jerash, Madaba, Wadi Rum, the Red Sea, the Dead Sea, etc.). Volume of investment in the sector has increased. A national strategy for tourism was launched recently, targeting a doubling of income from tourism to JD 1.3 billion by 2010, creating over 51,000 new job opportunities. |
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Pharmaceutical sector |
Established some thirty years ago, the pharmaceutical industry occupies a leading position in terms of production and exports, second only to the garment industry. With capital investment of over 400 million US dollars, the pharmaceutical industry has become an important source of exports, with threefold growth in overall sales, up from 68 million US dollars in 1991 to 226 million US dollars in 2004. Some 18 laboratories employ 8,000 people and the sector specialises and excels in producing branded generics in various forms: solids, semi-solids, liquids, aerosols etc. as well as producing various products under license from multi-national companies. |
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Agriculture and agrofood |
Despite limited local raw materials, the food industry is the second most important sector in Jordan in terms of attracting FDI and, according to the Jordan Investment Board, the second largest in terms of national investment. The sector has experienced relatively recent development, a high proportion of companies having been created at the beginning of the Nineties. Even if today’s processes are easily mastered thanks to the high training level of national engineers and technicians, the food processing industry suffers from weak research and development.
A list of agrofood projects is available on the website of the UNIDO Investment Promotion Unit in Jordan:
http://exchange.unido.org/main2.asp?menu=MenuePopup5&ID=362&lan=en |
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