We want to make sure investors know that Jordan is ready for business

We want to make sure investors know that Jordan is ready for business


Interview with H.E. Dr. Wissam Rabadi, Minister of Planning and International Cooperation, the Hashemite Kingdom of Jordan


BF: Last year, there was a government reshuffle in order to give new impulse to the much-needed economic reforms that Jordan has been undertaking in recent years and, alongside these, it had reopened borders with neighbouring markets. Then Covid-19 emerged and caused disruption around the world. How has the situation affected Jordan’s blueprint strategy for 2025?

WR: We have always understood that economic reform is the gateway to growth and development, and our recent refocus put us on a new growth path that aims to create more jobs, raise the efficiency of the public sector and reinforce economic stability. However, we live in an unpredictable and unstable region and, over the past 10 years, Jordan has withstood major external shocks that have heavily impacted us both socially and economically. In 2008, the global financial crisis had major implications on investment and liquidity around the world. We were not an exception and, despite our very prudent central bank that managed to protect the banking sector, the global crisis affected investments and businesses across the country.

In 2010 and 2011, the Arab Spring also caused more instability and unpredictability in the region. More importantly for Jordan, the disruption of the Egyptian gas pipeline, which we depended heavily on for our energy requirements, meant that we had to turn to heavy fuel to generate electricity. This led to a substantial increase in our energy bill and the government was forced to subsidise energy prices and absorb losses resulting from the price difference, thereby incurring a large debt.

Then in 2013 and 2014 we were forced to close our borders with Iraq as part of our efforts to fight terrorism. This meant that we lost important regional markets that were large importers of Jordanian products and services. We were again forced to close our borders during the Syrian crisis, meaning that our local products and services did not reach important export markets through Syria, like Lebanon, Turkey and Europe. This had a huge impact on the economy and was further exasperated by an influx of 1.3m Syrian refugees. The refugees placed heavy burdens on our infrastructures and further populated crowded schools and hospitals.

More recently and similarly to the rest of the World, the Covid-19 pandemic has and will continue to affect us. For the first time in decades, the International Monetary Fund (IMF) is expecting Jordan’s economy to contract in 2020, despite the fact that we were on an economic growth trajectory. The global slowdown has impeded foreign direct investment (FDI) and, most importantly, tourism. Jordan is a beautiful country that depends a lot on tourism, whether it’s religious tourism, historical tourism, adventure tourism or medical tourism. Tourism is a key economic sector that plays a significant role in our gross domestic product and employs thousands of Jordanians. Unfortunately, this sector has been hit severely by the pandemic.

On a more positive note, Jordan’s quick response and early measures in reaction to Covid-19 have been one of the best in the world. We moved forward with a three-stage strategy, starting with mitigation, secondly, adaptation and solidarity, and now, finally, we are currently in the recovery and resilience phase. We also took and will continue to take healthcare and economic measures to help people cope better with the impact of the pandemic, as well as measures to curb the spread of Covid-19 including lockdowns, closing borders, social distancing and continuous testing. Moreover, the Central Bank of Jordan took monetary measures to also help further mitigate negative impact of the pandemic on those who were affected the most.

Looking back at over a decade of resilience, it is important to recognise the unique ability of a small country like Jordan to withstand so many external shocks; we have managed to navigate regional and global problems. The situation today is not perfect, but we are moving in the right direction.

In 2019, during the London Initiative: Jordan Growth and Opportunities Conference, Jordan launched its five-year Reform Matrix that put down the foundations for more sustainable, inclusive growth. The Reform Matrix sets out a very ambitious reform agenda comprising 225 reforms that cover vertical and horizontal reforms aimed at enhancing Jordan’s macroeconomic stability, reducing business costs, increasing competitiveness and creating a flexible labour market. As a testament to our commitment to reform, in the World’s Bank 2020 Doing Business Report Jordan was ranked amongst the top three performers and number four globally in the area of access to finance. We moved up 29 places in the report, changing our ranking from 104th to 75th. This was the result of over 116 vital reforms that took place with regards to introducing new regulations to govern aspects of financial transactions, such as insolvency, digital payments and public procurement.

We have also undertaken a lot of reforms in the energy sector, particularly on the diversification of energy sources and becoming more sustainable and less reliant on imported energy. We are harnessing some of our rich resources of clean, renewable energy and aim to have one-fifth of our energy needs generated through renewables. We are committed to strengthening and simplifying our tax and customs administrations systems. As another testament to our continued resilience and commitment to reforms, in March this year, the IMF approved a $1.3bn support programme for Jordan. The four-year programme is based on growth-inducing structural reforms and maintaining fiscal discipline, and includes benchmarks with regards to lowering the cost of doing business, improved disclosures of public official assets and achieving a more equitable distribution of the tax burden.

Our medium-term strategy remains focused on structural and fiscal reforms, we are also leveraging public-private partnerships (PPPs) to attract investment and improve the investment ecosystem in general in the country. We are actively looking at the energy sector and health remains a top priority. In addition, we are working on enhancing our export capabilities in sectors that we have noticed a competitive advantage, such as the agricultural and medtech sectors. We are now finding ways to increase the added value that we can offer in different products in these specific sectors.


BF: You have been linked in the past with the US but also with technology and innovation. How is this experience guiding you in your responsibilities as Minister of Planning and International Cooperation? What are your priorities and how are you trying to implement them?

WR: When it comes to technology and innovation, Jordan has been at the forefront of others in the region as a major ICT player and solutions exporter. As home to a large number of startups, incubators, venture capital firms and accelerators, several key home-grown innovations in the digital technology sectors have been instrumental in fighting the pandemic.

During lockdown, we were able to reach over 90% of students to continue e-learning. Developed e-payment systems also meant that the government could provide social protection and aid to daily workers and families that were impacted the most during this crisis.

Just before Covid-19 emerged, we finalised the details of the five-year “Youth, Technology and Jobs” project with the World Bank. The programme was signed in March 2020 towards better preparing young people with digital skills in order to capitalise on Jordan’s potential to grow its digital economy and absorb skilled labour. It will also expand some government digital services. We also launched projects with other donors that focus on smart agriculture and using technology to revolutionise the agricultural sector.

During the epidemic, we witnessed the birth of new apps for tracing and communications, proving how competitive this sector really is and how important it is for us to continue to attract and direct investments towards the creative innovations of our talented human capital.

In this specific area, our relationship with the US has helped us leverage support for Jordanian ICT businesses. The success of several Jordanians in Silicon Valley gave rise to a number of partnerships with US businesses, whether for transferring knowledge and acting as mentors, or to help local companies tap into and access US markets.


BF: Speaking with the Washington Post, King Abdullah II of Jordan said: “It is time to return to globalisation. But this time do it right.” How are you translating this into international policies and actions?

WR: Jordan and King Abdullah II have and continue to play a leading role in international cooperation and global integration. The main principles of this are founded on building on collective strengths and resources towards the benefit of all. We really believe that taking the right actions together will lead to a better future for everyone. It is not just about recovering to the status quo, we must collectively focus on doing it the right way.

The secretary general of the United Nations said, “None of us is safe, until we all are.” Again, it is important that we face things together; Covid-19 did not distinguish between colour or religion, being poor or rich. Now more than ever, it is time for global solidarity. We must rekindle relationships with our partners and continue to work with the global community towards a better collective future. Covid-19 was a wake-up call for some on the importance of inclusiveness and reducing inequality. It made us rethink our supply chains and how we are to maintain our robustness and resilience.

Our response to the pandemic showcases a direct translation of Jordan’s global vision: we helped many of our neighbouring countries with the supply of personnel protection equipment and other items, and continue to call for equal access to medication and vaccination worldwide. As humans we can share experiences, knowledge and information faster than the virus spreads and this is how we will beat it, by collaborating and sharing information.

We have and will continue to lead global efforts across the world, whether it is in response to a crisis or in spearheading a new global initiative. We are always at the forefront of global efforts in security, stability, peacemaking and peacekeeping, interfaith and cross-cultural dialogue, in addition to countering extremism and terrorism.


BF: Jordan has long been a favourite destination for British holidaymakers and it also offers opportunities as an investment destination for UK companies and investors. Many in Britain are looking to the Middle East and North Africa as a potential arena for much-needed trade and investments as the UK is intent on pursuing independent trade deals after Brexit. Is the climate for investment in Jordan going in the right direction?

WR: I think it is going in the right direction and there is a strong commitment to making sure that we implement policies, strategies, interventions and reforms that can improve the business framework. We want to make sure investors know that we are ready for business. Measures focused on reducing the cost of starting, operating and exiting a business are being taken. We have also increased the predictability of our regulations and regularity framework. For example, we are adopting a public investment management framework and PPP framework.

Our aim is to ensure the effective implementation of new investment management programmes, including PPP projects. Earlier this year, the Parliament of Jordan passed a PPP law that is efficient, transparent and that is attractive to international investors. We also operationalised the public procurement structure, which is very important in providing more transparency and efficiency. The main objective of all these reforms is to attract FDI and decrease the burden placed on our limited fiscal resources. We need to do whatever it takes to provide the right environment for investment in the country.

We looked at something we called “the investor journey,” which is the entire journey from starting a business all the way to exiting business – how we can further facilitate things for investors to do business in Jordan throughout he whole process . We hope that over the next two to three years, Jordan will be ranked amongst the top 50 countries in the world in terms of ease of doing business. To facilitate new investments, we also made reviews of our competition policy to ensure the independence of relevant agencies to monitor and enforce good market conduct, and to design and implement rules that minimise market distortions.

Many of these reforms proved to be extremely beneficial during the pandemic, particularly the “single window for customs”, where businesses were able to process the pre-arrival of their goods electronically. We have and will continue to charter stories of success despite the difficult circumstances around us – we are on the right path and there are a lot of opportunities to benefit from.


BF: On February 28, 2019, at the London Initiative: Jordan Growth and Opportunities Conference, the UK announced it would increase bilateral support to Jordan to up to £650m over five years, and that will underwrite a $250m World Bank loan to Jordan, allowing the country a lower loan repayment rate. Could you tell us more about the effects of this UK support and if Brexit or Covid-19 have changed something?

WR: The UK has always been a close friend and a long-term supporter and partner in the development of our country. We are grateful for its support, but also the responsiveness, the flexibility and the thought leadership that the UK and its government bring to Jordan.

The UK has committed to continue to support Jordan in its long-term economic development objectives and its self-reliance journey. There is continuous collaboration and continuous support from the UK. During Covid-19, the UK pledged an additional $6.17m in assistance as part of a multi-donor account that was established with the US, Spain and Germany. The account was established to address vulnerable Jordanians and reach those families and individuals who have been impacted the most by the economic strains resulting from the Covid-19 crisis. The UK has also recently provided around $25m in support via the World Bank. This support has really been critical to families and individuals whose jobs and livelihoods were interrupted or affected during the crisis.

Overall, the UK has continued to be a critical supporter and a thought leader behind our five-year growth plan that was launched in London and was hosted by the UK government. The monetary support that was announced includes £260m that will be made available by the end of 2020. These grants will also provide humanitarian support, funding for education, social protection and employment. There is also another $250m that was put forward by the UK as guarantees blended with World Bank loans, including a Development Policy Loan that was contracted in 2019 and has already been disbursed.

Furthermore, under the announced grant assistant, the UK extended £14m to the creation of the Multi-Donor Trust Fund (MDTF). The fund is managed by the World Bank and was created to support Jordan’s reform agenda and five-year growth matrix. It provides technical assistance and resources to government institutions and other stakeholders for the implementation of reforms. This MDTF that the UK was generous in supporting is critical to implementing our reform agenda.

Additionally, the UK signed a new arrangement that aims to build and support cooperation to drive forward commitments under the Jordan National Human Resource Development Strategy, the Jordan Vision 2025 and the Jordan Compact. We will be able to create new opportunities for young people and new generations by building their capacity and knowledge through improving the quality of their education. The UK has also been providing a lot of support to Syrian refugees in the country. This support is vital to an extremely vulnerable group that relies on humanitarian assistance to meet their basic needs.

We have a great partnership with the UK – again, it is not just about the monetary support it is also the thought leadership and sense of true partnership. It’s a long-term relationship that is highly appreciated in Jordan and we look forward to continuing together in the future.


BF: The London conference also explored opportunities to bolster Jordan’s investment ecosystem to develop and finance bankable growth projects. Major initiatives that were highlighted include the ITS high-end services, tourism and hospitality, and film and media. Could you give us an overview on the current level of investment, trade and cooperation – how this is supporting economic growth and what are the areas where the bulk of new opportunities will come from?

WR: Unfortunately, as a result of the international economic crisis and geopolitical instability in the region, we had a slight drop in FDI between 2019 and 2018. In 2019, FDI inflow to the country was about $916m, whereas in 2018 it was $955m and I hope we can maintain comparable levels of FDI inflow in 2020. We need to continue to lay the groundwork and make changes internally. We are determined to recapture the growth momentum and continue with Jordan’s development.

To this end, we launched a specialised Project Preparation Development Facility (PPDF), with help from the International Finance Corporation and the World Bank. The PPDF builds capacity within the government to make more informed decisions about PPPs and develop a strong pipeline of projects. We also created a Public Investment Management unit at the Ministry of Planning that will be looking at projects and identifying attractive investment opportunities for investors. With this support, we can design projects that are more bankable, attract more bidders and enhance competition.

We are hoping to boost PPP projects in various fields, including transport, water services, education, healthcare and tourism. We have a pipeline of over 120 projects and are hoping that a more strategic approach to infrastructure procurement will attract private investment, and help tenders be successful and competitive.

With regards to specific areas of investment in Jordan, infrastructure and healthcare are very promising sectors, especially medical tourism. Historically, Jordan attracts a large number of patients from the region and during the crisis we received thousands of applications for medical tourism. As a result, special measures and protocols were put in place to be able to continue this important role.

Similarly, the crisis underscored the importance of Jordan’s agricultural sector with the demand for fresh fruits and vegetables increasing from neighbouring countries. Jordan’s climate is favourable for us to be a great source for agricultural products, and there is much potential and room for investment in this sector. Jordan’s banking sector also remains a strong pillar of our economy, and should continue to be a focal point for investment and growth. Jordan’s Investment Commission is always identifying exciting new market investment opportunities both for regional and international investors.


BF: Jordan’s role as a regional hub has created new opportunities in the market for UK businesses. For example, most major Iraqi companies have their bases in Amman and strongly prefer to do business with British companies, while many companies conduct business in Iraq from Jordan. Is this a growing trend?

WR: When compared to other countries in the region, Jordan enjoys a stable political and business environment making it easy for foreign companies to operate from here. Jordan removed restrictions on repatriation of profits making it easy to move capital in and out. The country also made it easier to attract highly skilled foreign labour, which allows large companies to bring in their senior management teams.

The country enjoys a solid IT and telecommunications infrastructure and a reliable transport system making it easy to move personnel and cargo to various countries in the region. Jordan connects three continents and enjoys exceptional international relationships and multiple free trade agreements. This position gives Jordan-based enterprises access to one billion customers, including ones in Europe, the US and Asia.

We have a very talented young population and highly skilled human capital that is also comparably cost effective; making us attractive to large companies. Yes, we are a small market but we are a business-friendly market, with immense talent and access to over one billion consumers.

I think the recent crisis showed us that there is an existing dependency on global supply chains, and many organisations and countries will start revisiting how and where they operate from. This offers a large window for various manufacturing and distribution opportunities. Rather than shipping from China and faraway locations, international companies might chose to ship from places that are closer and this opens a whole new area of investment and business in the region.


BF: Do you have a final message for the readers of the Guardian?

WR: Jordan is a small country with limited resources, but it offers the treasures of Petra, Jesus’ baptism site and the Dead Sea amongst many other unique, one-of-a-kind experiences. It has a very hospitable population, and an extremely talented and innovative young workforce. Over the years, Jordan has been a voice for moderation, peace and reform. Next year is our 100th birthday and we hope that you join us in celebrating 100 years of sound leadership, resilience, talent, energy and ambition – and I am confident that you will fall in love with all this magnificent country has to offer.