According to figures released by the United Nations Conference on Trade and Development, Jordan attracted over $3bn in foreign direct investment in 2006, an increase of over 100 per cent. However, its total was far below Saudi Arabia, which attracted $18.3bn, Egypt, $10bn, and the UAE, $8.4bn.
Furthermore, a majority of the 2006 FDI increases into Jordan were attributed to a few major privatisation initiatives that attracted large interest from regional investors, and not nearly enough was directed to greenfield initiatives, said Dr. Dirk Buchta, vice president and managing director of AT Kearney Middle East.
‘Despite Jordan pursuing a set of economic development strategies to promote national economic development, it has a long way to go,’ Buchta said.
Given the large number of emerging markets that it competes with for investment, Jordan needs to urgently determine how to secure larger shares of future global FDI spends going towards competitive and sustainable economic programmes.
Currently the driving force behind Jordan’s economic development strategy is to reduce the most challenging problems facing its economic, employment and social situation.
‘The investment drive so far has included the development of a large number of investor-friendly economic zones – including public free zones, private free zones, and a special economic zone in Aqaba,’ Buchta said.
‘However, the drive to finance economic development projects and the challenges in setting up the right infrastructure and skills are some of the most pressing obstacles facing Jordan’s ambitions.’
With over 80 free zones already established and operating in the Middle East and Gulf regions, Jordan’s desire to implement a similar economic drive must be ‘laser-focused’, leveraging the potential that currently sets it apart from other neighbouring countries.
However, Buchta added that Jordan’s potential for foreign investment is there and evident by trends in its inward FDI figures. ‘So far it has shown its commitment by implementing sound investment laws and incentives to create an attractive business environment,’ he said. He also emphasised that an ‘investment-focused and coherent economic strategy to elevate Jordan’s FDI targets is vital’.
Jordan’s industry and trade minister Amer Hadidi told our sister publication MEED that the Jordan Investment Board, a government body that helps foreign companies invest in the kingdom, would draw up the new strategy by June 2008.
Jordan Investment Board chief executive Maen Nsour said that the strategy would focus on industries that produce goods and services that could be exported.
PA Consulting, a US firm, and Business Insights from Jordan will advise the board on the new strategy. The board is targeting 12 countries for new FDI, including three Arab states, Kuwait, Saudi Arabia and the UAE. The other nine countries are China, France, India, Italy, Russia, South Korea, Spain, Taiwan and Turkey.
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