Towards Jordan’s Sustainable Growth

Tackles issues relating to Jordan’s economic reform, sustainable growth and the Syrian refugee crisis.

The Ministry of Planning and International Cooperation (MoPIC) is tackling issues in various fields including economic growth, education, and improving the standards of living of the population in Jordan. HE Dr. Mary Kawar, the Minister of Planning and International Cooperation, elucidates the ministry’s active role in achieving sustainable growth, improving Jordan’s investment climate, as well as women’s political participation and empowerment, and the mitigation of the impacts of the Syrian refugee crisis.

One of the ministry’s goals is to create an attractive investment environment in Jordan. What are the ministry’s plans towards achieving sustainable growth and ensuring a decent standard of living for all Jordanian citizens?

The MoPIC is playing a key role in the design and implementation of the Growth and Reform Matrix. This is a five-year program that was developed in close coordination with Jordan’s development partners and covers cross-cutting as well as vertical themes with the aim to improve the efficiency of the private sector, reduce business costs, promote exports and investments, and create jobs. MoPIC’s has been working with other Government of Jordan ministries, departments and agencies, as well as with our development partners to identify the key reforms that will generate growth and jobs.

The implementation of the reforms within the Matrix has already started with many more reforms to come.

Over the last twelve months, Jordan has made significant progress in implementing these reforms, including those that will unlock new opportunities for business and generate investments. Examples of these reforms include: the adoption of the Regulatory Predictability Framework, which makes it mandatory for all business-related regulations to go through a Public-Private Dialogue process; streamlining and unifying all monitoring and inspection procedures on economic activities to minimize uncertainty for businesses, reduce costs and improve productivity; and the adoption of a new Venture Capital Bylaw that regulates the establishments and registration of such funds and offer tax exemptions based on international best practice.

Many other reforms are in the pipeline including the revision of the Public-Private Partnership Law and Governance Framework; easing work permit requirements for highly specialized foreign labor, especially in technical sectors such as ICT and engineering; revising FDI regulations to open further sectors to non-Jordanian investments.

In your opinion, how can you describe the current investment climate in Jordan?

Jordan’s economy has remained remarkably resilient despite being hit by several external shocks over the past decade due to regional instability and the Syrian refugee crisis. These shocks hampered trade and exports with Syria and Iraq at the time; including trade through these countries to Europe, Turkey and Central Asia. Jordan had to also face major disruptions in gas supply from Egypt since 2011, which powered 90% of electricity generation in Jordan.

Despite all of this, Jordan responded well with several initiatives. Jordan worked with the international community, including the UN and the World Bank to channel more funding and support to refugees and host communities and to allow Syrian refugees to participate in the Jordanian formal labor market.  Jordan also implemented a national economic and fiscal reform program in coordination with the IMF to reduce debt levels, improve fiscal management and better utilize revenues to stimulate growth.

It is worth mentioning that between 2011-2018 Jordan implemented fiscal measures in excess of 14% of GDP. Finally, and as discussed earlier, Jordan is currently implementing the Five-Year Growth and Reform Matrix, which will create a highly competitive investment environment and create employment.

International reports show positive development in Jordan’s overall investment environments. The Kingdom has advanced 14 points from 118 to 104 on the World Bank’s “Doing Business Report” and is expected to further improve for the 2020 report. Moreover, Jordan ranked 69th best economy worldwide in Forbes 2018 annual survey of the Best Countries for Business, and 57th on the Global Talent Competitiveness Index.

Jordan has major trade agreements with a significant number of countries which investors can utilize to enter new markets. It has trade agreements with two of the largest markets in the world: the US and the EU, in addition to 18 Arab countries. The US-Jordan Free Trade Agreement entered into force late 2001 providing Jordanian exports with a comparative advantage in the large US market. The simplified Rules of Origin (RoO) agreement with the EU allows free access for most Jordan’s industrial exports to the EU market with the condition to employ a certain number of Syrian refugees.

As stated by His Excellency PM Omar Razzaz at the conference “Jordan’s immediate focus is to stimulate economic growth in order to provide greater opportunities to our citizens, now and for the future”, what is your evaluation of the outcome of the Growth and Opportunity conference in London last February?

This London Conference was a successful event that brought together senior government officials, members of multilateral development and financial organizations, civil society and high-level investors and business people from over 60 countries to help support Jordan’s transition to a more productive, competitive economy. The Conference is not intended to be an end by itself, but rather the launch of the London Initiative: a five-year pathway to unlocking growth, investment and jobs for Jordan.

We used the Conference as a platform to showcase all the current and future market reforms being implemented which will stimulate the economy and create investments. We also explained to our global partners our growth strategy going forward including the expected impact, and the support that Jordan needs to successfully implement this growth strategy.

Three main pillars were covered during the London Initiative where Jordan and the international community can partner together in support of sound implementation principles and a follow-up mechanism to ensure commitments are fulfilled.

  • First, the government communicated the implementation of serious and robust reforms to improve the efficiency of the private sector, reduce business costs and promote exports and investments.
  • Second, the government presented a comprehensive medium-term financing strategy that moves its debt to a sustainable footing.
  • Third, the government presented private sector investment opportunities and announced the creation of a new Projects Pipeline Development Facility with a pipeline of 123 investment opportunities in strategic growth sectors over the coming 20 years.

The London Initiative marks the start of a new partnership approach between Jordan and the international community in pursuit of Jordan’s sustainable growth and self-reliance. The international community reiterated the strength of its partnership with Jordan and declared that it is determined to do all it can to support Jordan’s long-term stability and prosperity. On the other hand, the international business community recognized the opportunities that Jordan offers, and the government efforts to increase efficiency and transparency.

According to the Global Gender GAP Report 2018, Jordan ranks 129 out of 149 countries in terms of women’s political empowerment. What is the ministry’s role in regards to this issue and what are the efforts being put forward to improve women’s political participation?

In order to strengthen and stabilize the foundations of Jordan’s economy, making it self-reliant; the government and The Jordanian National Commission for Women (JNCW) are working closely to integrate the women and gender issues in all the sectors of the Jordan Vision 2025. This initiative will be considered a pioneering attempt at the level of the Arab countries and the region. The optimistic approach includes having various development sectors adopt the principle of gender integration.

In recent years, Jordan has succeeded in closing the gender gap in health and education, according to Jordan performance on the Gender Gap index. But, we did not succeed in reducing the gap on economic participation and political empowerment.

The participation rate in the labor force is only 17.3% as of 2017 percent for women. This is despite high education attainment among women. Today, women representation in the senior management category within the government stands at 7.38%. This percentage covers all government ministries except for Ministry of Education and Ministry of Health where women representation in leadership positions was relatively high, 55.97% and 52.88% respectively. Therefore, more efforts are needed to enhance the status and involvement of women in our country, and to allow for their active and fruitful Economic Participation and political empowerment.

To counter this and improve women’s participation, several initiatives are being put in place. Firstly, the Ministry of Planning and International Cooperation is chairing the Inter-Ministerial Committee for Women’s Empowerment (IMC). The IMC was established in 2015 to provide leadership, coordination and accountability for action across the government on achieving commitments related to women’s human rights.

Moreover, the government adopted the Jordanian National Action Plan (JONAP) for advancing the implementation of UN Security Council resolution 1325 on Women, Peace and Security (UNSCR 1325). The JONAP was developed in line with the government’s commitment towards promoting and respecting human rights, justice, and equality. It also reiterated the importance of the role of women as key actors in preventing and combating extremism and violence.

Recently, Jordan adopted a 5 year Women’s Economic Empowerment Action Plan which aims to increase women’s labor force participation rates to 24% by 2025.  This will be done through  enhancing the capacity of the government to identify and address constraints to women economic participation; supporting the creation of family-friendly and non-discriminatory work environment; enhancing the employment of women in the private sector; as well as increasing the number of female-led MSMEs and cooperatives.

The most recent achievement is the draft amended Jordanian Labor Law, which introduced adding clear definitions on “wage discrimination” and “flexible work”. This is considered a step towards pay equity and non-discriminatory practices between women and men in the workplace. Additionally, the amended law included an article that entitled fathers to a paid paternity leave of three days.

In light of the current Syrian refugee crisis, what are the ministry’s efforts towards reducing the impact of the crisis on Jordan?

We are inclusive in our planning and response; The Jordan Response Plan (JRP), led by the MoPIC, with its three pillars (Budget Support, Refugee and Resilience), is a holistic approach towards managing crises and contributing for development of the kingdom and welfare of both refugees and vulnerable Jordanians. The Government of Jordan (GoJ) is working towards the inclusion of the private sector and enhancing the partnership between private and public sectors, where private sector can take a role in improving the lives and livelihoods of refugees by addressing the crisis through hiring refugees (Livelihoods) and investing in refugees (Education) and delivering services to refugees (supply chains, connectivity).

The JRP includes educational programs covering early education, school years, tertiary and higher education for Syrian refugee children. We have also partnered with generous support from donors international organization and Jordanian Universities to provide scholarships for refugee students.

Furthermore, by equipping refugees with skills and facilitating their access to labor market, this is also among our commitments within the Jordan Compact. GoJ developed policies and framework to enhance refugees’ access to livelihoods and enforce partnership through:

  • A) Facilitating work permits process.
  • B) Cash for work programs.
  • C) Easing access to SMEs and home based businesses. These are some of the achievements we are proud of.

The private sector has been a key player in our humanitarian response. Some of the most notable examples are the Industrial Zones offering employment opportunities for refugees; the green energy electricity project which was performed with support of private sector, where refugees were hired as well, and contributed in building an electric network serving them and saving environment; Zain Connectivity which launched in 2016 and backed by Zain Group, UNHCR and Facebook providing unlimited, 24/7 outdoor and indoor Wi-Fi access points through Zain Jordan’s high-speed 4G mobile network in  identified least privileged locations as the Princess Basma Center in Sahab, Tafileh, and Karak; and the Zain Syria-Sim service, which provides unlimited minutes for calls between refugees which leads to an improvement in refugees access to information.

The JOURNAL 2019